CRS Reports

Trump Administration Tariff Actions (Sections 201, 232, and 301): Frequently Asked Questions

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 Section 201 of the Trade Act of 1974—Allows the President to impose temporary duties and other trade measures if the U.S. International Trade Commission (ITC) determines a surge in imports is a substantial cause or threat of serious injury to a U.S. industry. Section 232 of the Trade Expansion Act of 1962—Allows the President to adjust imports if the Department of Commerce finds certain products are imported in such quantities or under such circumstances as to threaten to impair U.S. national security. Section 301 of the Trade Act of 1974—Allows the United States Trade Representative (USTR) to suspend trade agreement concessions or impose import restrictions if it determines a U.S. trading partner is violating trade agreement commitments or engaging in discriminatory or unreasonable practices that burden or restrict U.S. commerce. 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. U.S. Imports and Exports Affected by the Recent Tariff Actions / Sources: CRS analysis of U.S. import data from the U.S. Census Bureau and trade partner data from Global Trade Atlas IHS Markit. 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.

Feb 22, 2019

U.S.-Mexico-Canada (USMCA) Trade Agreement

Feb 22, 2019

The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison

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—such as nutrition programs, commodity support programs, major conservation programs, and crop insurance—in 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—the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP)—while 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.

Feb 22, 2019

Banking Policy Issues in the 116th Congress

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.

Feb 21, 2019

The Defense Department and 10 U.S.C. 284: Legislative Origins and Funding Questions

Introduction On February 15, President Donald J. Trump confirmed recent reports that described the Administration’s consideration of Department of Defense (DOD) authorities and funds to emplace physical barriers along the U.S.-Mexico border. A White House fact sheet detailed the potential availability of up to $8.1 billion “to build the border wall”—including, among other authorities and funding sources, “up to $2.5 billion under the Department of Defense funds transferred for Support for Counterdrug Activities (Title 10 United States Code, section 284).” The full title of the referenced authority is “Support for Counterdrug Activities and Activities to Counter Transnational Organized Crime.” It is one of several DOD authorities to conduct counterdrug missions. In the context of Administration priorities along the southern border, this authority has gained congressional attention because its use is not contingent on the declaration of a national emergency. What Does 10 U.S.C. 284 Authorize? 10 U.S.C. 284 authorizes the Secretary of Defense to provide specified support to other federal departments or agencies, as well as state, local, tribal, or foreign law enforcement agencies, to conduct counterdrug activities or to counter transnational organized crime. The authority specifies 10 types of authorized domestic support, including the “construction of roads and fences and installation of lighting to block drug smuggling corridors across international boundaries of the United States.” According to Joint Chiefs of Staff guidance issued in 2014, such activities encompass “engineering support” for mobility and counter-mobility purposes and are limited to the southern border. Other authorized domestic support activities include the maintenance, repair, or upgrading of certain equipment; transportation of personnel; establishment and operation of certain bases or training facilities; counterdrug or counter-transnational organized crime training; detection, monitoring, and communication of the movement of air, sea, and surface traffic near U.S. boundaries; establishment of command, control, communications, and computer networks for interoperability; provision of linguist and intelligence analysis services; and aerial and ground reconnaissance. How Did 10 U.S.C. 284 Come to Exist? The authority traces its origins to Section 1004 of the FY1991 National Defense Authorization Act (NDAA; P.L. 101-510). The original provision authorized DOD to support the “construction of roads and fences and installation of lighting to block drug smuggling corridors across international boundaries of the United States.” Enactment of Section 1004 fit within the context of U.S. government-wide efforts to combat drugs in the 1980s—and congressional desire to assign DOD a key role. In 1988, for example, the FY1989 NDAA mandated DOD to serve as the “single lead agency ... for the detection and monitoring of aerial and maritime transit of illegal drugs into the United States.” DOD’s role in counternarcotics has long been a source of policy debate, raising questions over the use of the military to perform law enforcement functions, concerns regarding the use of force along the southern border, and the impact of such efforts on military readiness. In part due to lingering questions over whether the authorities in Section 1004 should be made permanent, Congress, for more than two decades, mandated the authority to sunset unless explicitly reauthorized. Although Section 1004 continued to be reauthorized over the years, it was not until the FY2017 NDAA (P.L. 114-328) that Congress codified the provisions of Section 1004. The current law, which does not sunset, incorporates a key change made to its scope in the FY2015 NDAA (P.L. 113-291): it authorizes DOD to support efforts to combat transnational organized crime, in addition to drugs. How Are Activities Authorized by 10 U.S.C. 284 Funded? 10 U.S.C. 284 does not address the availability of funds. DOD’s counterdrug activities, including those carried out pursuant to 10 U.S.C. 284, are funded out of the “Drug Interdiction and Counter-Drug Activities” central transfer account (CTA) in annual DOD appropriations for Defense-wide operations and maintenance (O&M). For FY2019, Defense appropriations (Division A; P.L. 115-245) provided a total of $881.5 million to this CTA, excluding $152.1 million in overseas contingency operations (OCO) counterdrug funding (primarily for activities in Afghanistan). This amount is above the President’s FY2019 base budget request of $787.5 million—including $130.3 million for domestic support (the President requested an additional $152.1 million in OCO counterdrug funding). Counterdrug funding through the CTA is disbursed through the Office of the Deputy Assistant Secretary of Defense for Counternarcotics and Global Threats. Requests for domestic counterdrug support are fielded by U.S. Northern Command (USNORTHCOM), while Joint Task Force North (JTF-N) plans and coordinates domestic counterdrug support missions. Outlook In light of President Trump’s memorandum of April 4, 2018, instructing the Secretary of Defense to support Department of Homeland Security (DHS) efforts to secure the southern border, the House Armed Services Committee held a hearing on January 29 on the topic. In congressional testimony, Under Secretary of Defense John Rood stated that 10 U.S.C. 284 has not been used by DOD to support DHS to harden ports of entry or to lay concertina wire between them. A DOD press release from February 15 stated that if DHS were to request support pursuant to 10 U.S.C. 284, it would “review and respond appropriately to any request for assistance received.” Questions related to DOD’s counterdrug authorities and funding remain and may include the following: How might the role and scope of active duty military and National Guard personnel along the border evolve with the invocation of 10 U.S.C. 284 or other authorities available to DOD to conduct counterdrug missions? What role might defense contractors play? How does the border mission fit within DOD’s priorities for counterdrug programming? If funding were reprogrammed or diverted from other DOD priorities in order to fund engineering projects along the southern border, what current counterdrug activities would be affected? In addition to FY2019 funds appropriated in DOD’s counterdrug CTA, what additional amounts may be available for the purposes of 10 U.S.C. 284 through reprogramming or transfers? How might the FY2020 budget request for DOD counterdrug activities be affected by the President’s February 15 announcement?

Feb 20, 2019

Are Excessive Fines Fundamentally Unfair?

Feb 20, 2019

Legislative Proposals to Address National Park Service Deferred Maintenance

Feb 19, 2019

Child Welfare: Purposes, Federal Programs, and Funding

Feb 19, 2019

Can the Department of Defense Build the Border Wall?

Feb 18, 2019

The Transportation Infrastructure Finance and Innovation Act (TIFIA) Program

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. §601 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.

Feb 15, 2019

Defense Primer: Emerging Technologies

Feb 12, 2019

The Federal Income Tax: How Did P.L. 115-97 Change Marginal Income Tax Rates?

At the end of 2017, President Trump signed into law P.L. 115-97, which is commonly referred to as the Tax Cuts and Jobs Act, or TCJA. (The title of the bill as passed by the House was the Tax Cuts and Jobs Act, but it was eliminated before final passage under the reconciliation process used to consider the bill in the Senate.) This law made numerous changes to the federal income tax for individuals and businesses. Of the many changes made to individual income tax provisions, the law temporarily changed marginal tax rates. These changes are currently in effect from 2018 through the end of 2025. What Are Marginal Income Tax Rates? For many taxpayers, calculating federal income tax liability can be broken down into three main steps Taxpayers calculate the amount of income subject to taxation (i.e., their taxable income). Taxpayers apply marginal income tax rates to their taxable income to determine their “pre-tax credit” income tax liability. Taxpayers subtract tax credits from their pre-tax credit income tax liability to determine their final income tax liability. Marginal income tax rates are the tax rates applied to the last dollar of taxable income. Taxable income is often equal to total income minus the standard deduction or the sum of itemized deductions, whichever is greater. Specific marginal rates apply over discrete ranges of taxable income. For example, as illustrated below, if a married taxpayer has $750,000 of taxable income, only the amount above $600,000—or $150,000—is subject to a marginal rate of 37%, not the entire $750,000. Note: The maximum taxable income displayed in this graphic and all subsequent graphics is $1,000,000. This Insight looks only at statutory marginal tax rates and not effective marginal tax rates, which may differ. Effective marginal tax rates are the amount paid in tax on the next dollar of income, taking into account interactions with other features of the tax system. Thus, effective marginal tax rates are a function of (1) a taxpayer’s statutory marginal tax rate; and (2) interactions with other credits, deductions, exemptions, and special provisions in the tax code. Of note, capital gain or dividend income is taxed at different rates. In addition, some taxpayers may be subject to the alternative minimum tax (AMT), which in addition to a different definition of taxable income has different marginal tax rates. For a visualization of how federal income tax liability is calculated, see CRS Infographic IG10011, The U.S. Individual Income Tax System, 2018. How Did Marginal Income Tax Rates Change? Below are visualizations of marginal income tax rates in 2018 before and after the changes made by the TCJA (P.L. 115-97). The pre-TCJA rates are gray (what the 2018 marginal tax rates would have been, had P.L. 115-97 not become law), while the new marginal tax rates are pink. The three figures reflect the tax rates for taxpayers who file their federal income taxes as single filers (generally unmarried individuals without dependents), head of household filers (generally unmarried individuals with dependents, like a single parent), and married couples who file jointly (most married couples file their taxes this way). Several patterns are visible in these figures First, the lowest-income taxpayers generally see no change in their marginal tax rates since the 10% tax bracket is unchanged by the law. This is illustrated when the height of the pink and gray rectangles are the same. Second, for many medium- and upper-income taxpayers, their marginal tax rates are often lower. This is illustrated when the height of a pink rectangle is below the height of a gray rectangle for a given range of taxable income. Third, for single and head of household filers, and to a lesser extent married joint filers, there is a range of taxable income subject to higher marginal tax rates under the new tax law. This is illustrated when the height of a pink rectangle is above the height of a gray rectangle for a given range of taxable income. Each of these points is discussed in detail for a given filing status. Importantly, marginal tax rates are not the only factor that determines whether an individual has a lower or higher tax liability as a result of P.L. 115-97. A broad constellation of factors can result in taxpayers receiving a tax cut or a tax increase as a result of the TCJA. These factors include, but are not limited to, where the taxpayer lives, the number of children they have, whether they incurred significant medical expenses, and whether they own a home. Single Filers / For single filers, the TCJA left unchanged, reduced, or increased marginal income tax rates over different ranges of taxable income. For the lowest-income taxpayers, the 10% tax bracket was unchanged by the law and applied to the first $9,525 of taxable income. For taxable income greater than $9,525 up to $157,500, marginal rates are lower under the TCJA. Marginal rates are higher under the TCJA between $157,500 and $424,950 of taxable income (excluding a rate reduction between $195,450 and $200,000 of taxable income). The marginal tax rate on taxable income between $424,950 and $426,700 was unchanged by the TCJA. For taxable income above $426,700, marginal rates are lower under TCJA. Head of Household Filers / For head of household filers, the TCJA left unchanged, reduced, or increased marginal income tax rates over different ranges of taxable income. For the lowest-income taxpayers, the 10% tax bracket was unchanged by the law and applies to the first $13,600 of taxable income. For taxable income greater than $13,600 up to $157,500, marginal rates are lower under the TCJA. Marginal rates are higher under TCJA between $157,500 and $424,950 of taxable income. The marginal tax rate on taxable income between $424,950 and $453,350 was unchanged by the TCJA. For taxable income above $453,350, marginal rates are lower under TCJA. Married Couples Filing Jointly / For married couples filing jointly, the TCJA left unchanged, reduced, or increased marginal income tax rates over different ranges of taxable income. For the lowest-income taxpayers, the 10% tax bracket was unchanged by the law and applies to the first $19,050 of taxable income. For taxable income greater than $19,050 up to $400,000, marginal rates are lower under the TCJA. The marginal income rate is higher under TCJA between $400,000 and $424,950 of taxable income. The marginal tax rate on taxable income between $424,950 and $480,050 was unchanged by the TCJA. For taxable income above $480,050, marginal rates are lower under TCJA. Acknowledgments Kevin Borden created the data visualizations used in this Insight.

Feb 12, 2019

Social Security Dual Entitlement

Feb 12, 2019

Venezuela Oil Sector Sanctions: Market and Trade Impacts

On January 28, 2019, the Trump Administration imposed sanctions on Venezuela’s state-owned oil company, Petroleos de Venezuela, S.A. (PdVSA), adding to existing Venezuela sanctions. The Department of the Treasury determined that persons (e.g., individuals and companies) operating in Venezuela’s oil sector are subject to sanctions in order to apply economic pressure on the government of Nicolas Maduro and facilitate a transition to democracy. Subsequently, Treasury’s Office of Foreign Assets Control (OFAC) added PdVSA—including all entities in which PdVSA has a 50% or more ownership position—to its Specifically Designated Nationals (SDN) list. This designation blocks PdVSA’s U.S. assets and prohibits the company from dealing with U.S. persons. These sanctions will affect several areas in which U.S. companies have business interests (e.g., debt/financial transactions and oil field services) and will effectively terminate U.S.-Venezuela petroleum (crude oil and petroleum products) trade. Potential economic impacts of these sanctions on Venezuela could be significant, but are beyond the scope of this product. U.S.-Venezuela Petroleum Trade Petroleum trade between the United States and Venezuela has been characterized by imports of heavy Venezuelan crude oil to U.S. refineries (see Figure 1), mostly to the Gulf Coast. In 2017, U.S. refineries imported 618,000 barrels per day (bpd) of Venezuelan crude oil—approximately 8% of total crude imports during the year. U.S. importers also purchased 55,000 bpd of Venezuelan petroleum products. U.S. exports to PdVSA consisted of 64,000 bpd of petroleum products directly to Venezuela and 11,000 bpd of crude oil to Curacao, where PdVSA has operated a refinery and petroleum storage facility. U.S. light oil and petroleum products are typically used as a diluent for blending with Venezuelan heavy crude oil as a means of reducing viscosity and facilitating transportation and marketing. Figure 1. U.S. and Venezuela Petroleum Trade, 2017 / Source: CRS, data from the Energy Information Administration and, where noted, the Organization of the Petroleum Exporting Countries (OPEC). Notes: EIA export data indicate that U.S. suppliers have not exported crude oil to Curacao since April 2018. The Curacao refinery was temporarily idled in mid-2018 due to a legal dispute between PdVSA and ConocoPhillips. Petroleum Market and Trade Impacts Prohibiting petroleum trade and related financial transactions between the United States and PdVSA will create a constraint within the global oil logistics system that will result in adjustments to global trade flows. The oil sector sanctions do not explicitly prevent non-U.S. entities from purchasing crude oil from or supplying petroleum products to Venezuela. However, OFAC-issued Frequently Asked Questions (FAQs, #657) indicate that petroleum purchases by non-U.S. entities involving “any other U.S. nexus (e.g., transactions involving the U.S. financial system or U.S. commodity brokers)” are prohibited following a 90-day wind-down period. PdVSA will need to secure alternative buyers for crude oil and petroleum product volumes that might otherwise be delivered to U.S. refiners as well as alternative suppliers for diluents previously sourced from the United States. U.S. refiners, on the other hand, will be required to identify alternative crude oil suppliers and U.S. petroleum exporters will have to locate other buyers for petroleum products that might have been destined for Venezuela. Adjusting to these sanctions-related supply constraints may take some time as alternative buyers and suppliers are located. Price levels for the affected petroleum commodities will also likely change as a means to facilitate alternative trade routes (e.g., U.S. refiners may have to incur price premiums to attract substitute crudes and PdVSA may have to accept price discounts in order to attract alternative buyers). Trade flow adjustments could potentially influence the magnitude of price impacts. U.S. Petroleum Exports to Venezuela Petroleum exports (e.g., diluents) from the United States to Venezuela are prohibited as of January 28, 2019. As a result, PdVSA will have to replace volumes purchased from U.S. suppliers. While there are alternative global suppliers, acquiring replacement diluents may result in delayed deliveries due to potentially longer trade routes. Since diluents are necessary to transport and market Venezuela’s heavy crude oil, a temporary diluent shortage could potentially reduce PdVSA’s crude oil production and export volumes until replacement diluents are acquired. U.S. petroleum product suppliers will need to find alternative customers for volumes previously destined for Venezuela. Venezuela Petroleum Exports to the United States Crude oil and petroleum product exports from Venezuela to the United States are also prohibited, although OFAC issued general licenses (7 and 12) allowing two U.S.-based PdVSA subsidiaries, including CITGO, as well as U.S. companies to continue purchasing and importing crude oil and petroleum products from PdVSA until April 28, 2019. Any payment made for petroleum imports from PdVSA during the wind-down period must be deposited into a U.S.-based blocked account, which will likely result in those transactions being stopped immediately. PdVSA will likely seek alternative non-U.S. cash buyers. However, PdVSA petroleum sales to non-U.S. buyers could be complicated due to OFAC’s indication that any such transactions involving the U.S. financial system are prohibited. U.S. crude oil imports from Venezuela—the largest trade element between the two countries—have declined since 2017 and averaged 511,000 barrels per day in November 2018. U.S. refiners will need to secure alternative supply sources to replace crude oil imports from PdVSA. Table 1 shows the companies that purchased Venezuelan crude oil and the states where oil was delivered during November 2018. Table 1. Crude Oil Imports from Venezuela by Company and State, November 2018 Thousand Barrels California Louisiana Mississippi Texas Total Percentage Chevron 220 2,793 3,013 20% CITGO 2,705 1,507 4,212 28% Houston Refining 495 495 3% Marathon 660 660 4% Motiva 458 458 3% Paulsboro 1,392 1,392 9% Valero 329 1,577 3,196 5,102 33% Total 549 6,334 2,793 5,656 15,332 100% Percentage 4% 41% 18% 37% 100% Source: Energy Information Administration, Company Level Imports, with data for November 2018, available at https://www.eia.gov/petroleum/imports/companylevel/, accessed February 6, 2019. Notes: Citgo is majority-owned by PdVSA. Russian oil company Rosneft holds 49.9% of Citgo as loan collateral. Other refiners purchase Venezuelan crude throughout the year, most located in the Gulf Coast.

Feb 11, 2019

Transportation Security: Issues for the 116th Congress

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—primarily subway systems—in 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”—that 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.

Feb 11, 2019

U.S. National Health Security: Homeland Security Issues in the 116th Congress

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. Figure 1. HHS Secretary’s Operations Center (SOC), Activated for the Wannacry Ransomware Attack, May 2017 / Source: Office of the HHS Assistant Secretary for Preparedness and Response, February 6, 2019. Notes: The health care sector was a significant target of the cyberattack. The image shows a staff briefing on cyber threat information sharing and other efforts to protect health care infrastructure. 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—for 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—continued 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 115th 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 116th 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.

Feb 11, 2019

Military Medical Malpractice and the Feres Doctrine

Feb 11, 2019

Department of Homeland Security Human Resources Management: Homeland Security Issues in the 116th Congress

/ 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 116th Congress may decide to conduct oversight of DHS CHCO operations—including placement, role, and functions within the department—and 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. DHS Strategic Plan 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 ... 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. DHS Annual Performance Report 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. President’s Management Agenda 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—led by the Office of Personnel Management, OMB, and the Department of Defense—is “Developing a Workforce for the 21st 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.

Feb 8, 2019

Electrification May Disrupt the Automotive Supply Chain

Feb 8, 2019

Trade Promotion Authority (TPA)

Feb 7, 2019

EU-Japan FTA: Implications for U.S. Trade Policy

Feb 7, 2019

EU Data Protection Rules and U.S. Implications

Feb 7, 2019

Defense Primer: Military Retirement

Feb 6, 2019

Science and Technology Issues in the 116th Congress

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.

Feb 6, 2019

Title Transfer for Bureau of Reclamation Facilities

Feb 6, 2019

Committee on Foreign Investment in the United States (CFIUS)

Feb 5, 2019

The Congressional Review Act: Defining a “Rule” and Overturning a Rule an Agency Did Not Submit to Congress

Feb 5, 2019

The World Oil Market and U.S. Policy: Background and Select Issues for Congress

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. 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.

Feb 4, 2019

U.S. Withdrawal from the INF Treaty: What’s Next?

Feb 4, 2019

U.S.-European Relations in the 117th Congress

Feb 4, 2019

The Disaster Relief Fund: Overview and Issues

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—70 years after the initial appropriation for general disaster relief—was $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.

Feb 1, 2019

Defense Primer: Military Commissaries and Exchanges

Jan 31, 2019

Child Nutrition Programs: Current Issues

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—the National School Lunch Program and School Breakfast Program—as 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—some successfully—to loosen these “paid lunch equity” requirements in recent years.

Jan 31, 2019

Fifth-Generation (5G) Telecommunications Technologies: Issues for Congress

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.

Jan 30, 2019

2018 Farm Bill Primer: Hemp Cultivation and Processing

Jan 30, 2019

Unemployment Insurance: Legislative Issues in the 116th Congress

Jan 29, 2019

North Korea’s Nuclear Weapons and Missile Programs

Jan 29, 2019

International Trade and Finance: Overview and Issues for the 116th Congress

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.

Jan 28, 2019

The Designation of Election Systems as Critical Infrastructure

Jan 28, 2019

Medical Product Regulation: Drugs, Biologics, and Devices

Jan 28, 2019

Potential Implications of U.S. Withdrawal from the Paris Agreement on Climate Change

Jan 25, 2019

Veterans Health Administration: Gender-Specific Health Care Services for Women Veterans

Jan 25, 2019

Homeland Security Research and Development: Homeland Security Issues in the 116th Congress

/ Overview 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 116th Congress may include coordination, organization, and impact. Coordination of R&D 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. §182). The Director of DNDO also has an interagency coordination role with respect to nuclear detection R&D (6 U.S.C. §592). 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. §182), 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. Organization for R&D 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 116th Congress may examine the implementation of that act. The organization of DHS laboratory facilities may also be a focus of attention in the 116th 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 115th 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—a biocontainment laboratory currently being built by the S&T Directorate in Manhattan, Kansas—to the Department of Agriculture. Impact of R&D Results 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—shifting 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 116th Congress may continue to examine the effectiveness and impact of DHS R&D.

Jan 22, 2019

Freight Issues in Surface Transportation Reauthorization

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.

Jan 16, 2019

BUILD Act: Frequently Asked Questions About the New U.S. International Development Finance Corporation

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—the U.S. International Development Finance Corporation (IDFC)—by 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-à-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.

Jan 15, 2019

Coastal Zone Management Act (CZMA): Overview and Issues for Congress

Congress enacted the Coastal Zone Management Act (CZMA; P.L. 92-583, 16 U.S.C. §§1451-1466) 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. §1455). 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. §1456). 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.

Jan 15, 2019

Animal and Plant Health Import Permits in U.S. Agricultural Trade

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. §§8301 et seq.), the Plant Protection Act (7 U.S.C. §§7701 et seq.), and the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (7 U.S.C. §§8401). 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.

Jan 11, 2019

Military Construction Funding in the Event of a National Emergency

The President’s reported consideration of whether to invoke various statutory authorities (including some triggered by a declaration of a national emergency) to direct the Department of Defense (DOD) to construct “a physical barrier” along the U.S.-Mexico border has raised questions about potentially available appropriated funds. This Insight identifies previous military construction projects funded through emergency authorities and unobligated military construction funding balances. Title 10 U.S.C. Section 2808 is entitled Construction authority in the event of a declaration of war or national emergency and depends upon a “declaration of war or the declaration by the President of a national emergency in accordance with the National Emergencies Act [NEA] (50 U.S.C. 1601 et seq.) that requires use of the armed forces.” A declaration by the President under the NEA must detail the statute under which action will proceed. For discussion of the authorities the President may utilize after declaring a national emergency in accordance with the NEA, see CRS Legal Sidebar LSB10242, Can the Department of Defense Build the Border Wall?, by Jennifer K. Elsea, Edward C. Liu, and Jay B. Sykes. Previous Instances Presidents have invoked the NEA twice citing the emergency military construction authority set forth in 10 U.S.C. 2808. During Operation Desert Shield, President George H.W. Bush issued EO 12734 of November 14, 1990. In the aftermath of the September 11, 2001, terrorist attacks President George W. Bush issued Executive Order 13235 of November 16, 2001. In the latter, the president was required and able to renew the authority. Previous Military Construction Projects According to DOD information, from 2001 through 2014, the department funded a total of 18 projects under 10 U.S.C. 2808, after the President invoked the NEA, with a combined value of $1.4 billion. With the exception of one project dating from December 2001 related to security measures for weapons of mass destruction at sites in the continental United States, most of the projects took place at overseas locations (see Table 1). Table 1. Department of Defense Use of Authority Per 10 U.S.C. 2808 (2001-2014) Date Component Location Amount (in millions of dollars) Description of Project 11/21/2001 Air Force To support Operation Enduring Freedom 26.7 Expand aircraft parking ramps and build hangars at two forward operating locations 12/4/2001 Army Arkansas, Indiana, Kentucky, Maryland, Oregon 35.0 Security measures for weapons of mass destruction 11/17/2006 Army Guantanamo 102.0 Secure courthouse and support facilities 9/18/2008 Army Bagram, Afghanistan 38.8 Barracks, power line, and road 5/9/2009 Air Force Afghanistan 41.3 Airfield runway and apron pavement improvements 5/29/2009 Army Afghanistan, Iraq 136.2 Waste management complex, fuel storage, security improvements, ammo storage, medical facility, and logistics support area 6/2/2010 Air Force Afghanistan 59.0 Airfield pavement improvements 8/25/2010 Air Force Qatar, UAE, Kuwait, Afghanistan 129.1 Fuel facilities, passenger and freight terminal, cargo holding area, billeting, network control center, satellite communications facility, maintenance center, electrical substation, special operations forces (SOF) aviation complex, and ramp 8/16/2011 Army Afghanistan 74.0 Detention facility expansion, airfield pavement improvements, and tanker truck facility 1/13/2012 Air Force Camp Lemonnier, Djibouti 6.3 Aircraft parking, taxiway, and aircraft shelter 1/30/2012 Air Force Qatar, Afghanistan, Oman, Kyrgyzstan 141.2 SOF apron, taxiway, communications facility, ammo storage area, and airlift apron 3/5/2012 Army Parwan, Afghanistan 53.3 Detention housing and dining facility 6/1/2012 Army Afghanistan 28.0 Logistics hub, security improvements, and waste water treatment plant 6/15/2012 Air Force Camp Lemonnier, Djibouti 187.0 Combat Aircraft Loading Area (CALA) and billeting 6/30/2012 Army Afghanistan 86.0 Waste management complex and utility projects 8/20/2012 Air Force Camp Lemonnier, Djibouti 24.0 Parallel taxiway extension 8/20/2012 Navy Naval Support Act Bahrain 45.2 Waterfront development 6/14/2013 Navy Camp Lemonnier, Djibouti 228.0 Task Force Compound TOTAL 1,441.1 Source: DOD. Funding Section 2808 does not appear to cite a cost limitation per a project. However, it specifies as a source of funding certain available military construction funds. Subsection (a) states, “Such projects may be undertaken only within the total amount of funds that have been appropriated for military construction, including funds appropriated for family housing, that have not been obligated.” According to DOD information, the department reported unobligated balances in the military construction and family housing accounts totaling $13.3 billion at the end of FY2018 (see Table 2). Table 2. Status of Unobligated Balances for Military Construction (MILCON) and Family Housing Titles (in thousands of dollars, as of September 30, 2018) Account Period of Availability Appropriated Amount Unobligated Balance % Unobligated MILCON 2014/2018 7,969,801 244,377 3% MILCON 2015/2018 119,946 3,887 3% MILCON 2015/2019 4,947,617 654,158 13% MILCON 2016/2020 6,791,551 1,774,080 26% MILCON 2017/2021 6,797,713 2,821,042 41% MILCON 2018/2022 9,896,613 6,755,989 68% Base Realignment and Closure 2,836,102 204,806 7% NATO Security Investment Program 7,874,381 196,231 2% Family Housing 2014/2018 229,247 57,598 25% Family Housing 2015/2019 82,698 11,328 14% Family Housing 2016/2020 345,528 176,791 51% Family Housing 2017/2021 319,535 167,082 52% Family Housing 2018/2022 355,906 323,455 91% Family Housing 2018/2018 1,127,108 52,147 5% Family Housing Improvement Fund 4,301,107 18,812 0% Unaccompanied Housing Improvement Fund 80,332 632 1% Homeowners Assistance Program 2,923,870 40,083 1% MILCON Subtotal 47,233,724 12,458,339 26% Family Housing Subtotal 9,765,331 847,928 9% Grand Total 56,999,055 13,306,267 23% Source: The Report of the Department of Defense on Fourth Quarter Fiscal Year 2018 Bid Savings and Unobligated Balances for Military Construction and Family Housing Accounts (Execution as of September 30, 2018). The figures cited above do not account for unobligated balances resulting from FY2019 appropriations. The 2019 Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act (H.R. 5895; P.L. 115-244) appropriated a total of $11.3 billion in military construction budget authority, including $10.3 billion in Title I—Department of Defense (DOD) for the department’s base, or regular, budget, and $921 million in Title IV—Overseas Contingency Operations (OCO). These figures can be found in the funding tables in H.Rept. 115-929, the conference report accompanying the bill. These amounts reflect budget authority—not obligations (or unobligated amounts). Because military construction appropriations are generally available for obligation for up to five years, the department likely has a different amount of unobligated military construction funding than the total appropriated amount for any given fiscal year. In general, as part of the President’s annual budget submission to Congress, the Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer publishes a spreadsheet, entitled “Military Construction, Family Housing, and Base Realignment and Closure Program (C-1),” which details funding amounts, facility title, and installation or location for individual military construction projects. Congressional Notification and Reprogramming The use of Title 10 Section 2808 requires congressional notification. Subsection (b) states, “When a decision is made to undertake military construction projects authorized by this section, the Secretary of Defense shall notify ... the appropriate committees of Congress of the decision and of the estimated cost of the construction projects, including the cost of any real estate action pertaining to those construction projects.” Nevertheless, according to DOD regulations the use of Section 2808 does not require a request to Congress for reprogramming (i.e., a change in the application of funds). The DOD Financial Management Regulation (FMR; DOD 7000.14-R), Paragraph 170303, Subsection (A), “Construction in the Event of a Declaration of War or National Emergency,” highlights additional guidance in DOD Directives (DODD) 3025.18 and 4270.5, the latter of which states reprogramming is not required for construction projects under 10 U.S.C. 2808. Kevin Borden, Nicole Carter, Michelle Christensen, Jennifer Elsea, Michael Garcia, Bruce Lindsay, Edward Liu, and Liana Rosen contributed to this Insight.

Jan 11, 2019

Introduction to Bank Regulation: Leverage and Capital Ratio Requirements

Jan 11, 2019

Iraq

Jan 10, 2019