CRS Reports

U.S.-EU Trade Relations

Aug 1, 2018

Health Savings Accounts (HSAs)

A health savings account (HSA) is a tax-advantaged account that individuals can use to pay for unreimbursed medical expenses (e.g., deductibles, co-payments, coinsurance, and services not covered by insurance). Individuals may establish and contribute to an HSA for each month that they are covered under an HSA-qualified high-deductible health plan (HDHP), do not have disqualifying coverage, and cannot be claimed as a dependent on another person’s tax return. The account can be established with an insurer, bank, or other Internal Revenue Service (IRS)-approved trustee and is tied to the individual. Account holders retain access to their accounts if they change employers, insurers, or subsequently obtain coverage under a non-HSA qualified plan. To be considered an HSA-qualified HDHP, a health plan must meet several tests: it must have a deductible above a certain minimum level, it must limit total annual out-of-pocket expenditures for covered benefits to no more than a certain maximum level, and it can provide only preventive care services before the deductible is met. In 2018, HSA-qualified HDHPs must have a minimum deductible of $1,350 for self-only coverage and $2,700 for family coverage and an annual limit on out-of-pocket expenditures for covered benefits that does not exceed $6,650 and $13,300, respectively. These amounts are adjusted for inflation (rounded to the nearest $50) annually. HSAs have annual contribution limits, which in 2018 are $3,450 for individuals with self-only coverage and $6,900 for those with family coverage. Eligible individuals may make direct contributions to their HSAs, and employers, family members, and other individuals may make contributions to an individual’s HSA on the individual’s behalf. In addition to the annual limit, individuals who are at least 55 years of age but not yet enrolled in Medicare may contribute an additional annual catch-up contribution of $1,000. The annual contribution limit amounts are adjusted for inflation (rounded to the nearest $50) annually, but the catch-up contribution amount is fixed. Unused balances may accumulate without limit, be invested, and carry over from year to year. Individuals do not need to be enrolled in an HSA-eligible HDHP to make withdrawals from the account; however, any withdrawals that are not spent on qualified medical expenses for the account holder, the account holder’s spouse, or the account holder’s dependents generally are subject to a penalty tax. Qualified medical expenses include the costs of diagnosis, cure, mitigation, treatment, or prevention of disease and the costs for treatments affecting any part of the body; the amounts paid for transportation to receive medical care; and qualified long-term care services. In general, HSAs cannot be used to pay for health insurance premiums or over-the-counter medications. HSAs have several tax advantages: individual contributions are tax deductible unless made through a pretax salary reduction agreement; employer contributions (including individual contributions made through pretax salary reductions) are excluded from taxable income and from Social Security, Medicare, and unemployment insurance taxes; account earnings are tax exempt; and withdrawals are not taxed if used for qualified medical expenses. However, individuals generally are penalized for withdrawing funds for nonqualified medical expenses and for making contributions above the annual HSA limit. Although it would be beneficial to study the entire HSA population, which is the population that is eligible to establish and contribute to an HSA (i.e., enrolled in an HSA-eligible HDHP) and the population that has an HSA, few available data sources provide a comprehensive understanding of the entire HSA population. The lack of available data stems in part from the fact that HSAs and HSA-qualified HDHPs are two separate products that can be administered by two separate institutions. As a result, HSA research tends to focus on one of two populations, HSA-qualified HDHP enrollees or HSA holders. Although exact point estimates for the entire HSA/HSA-qualified HDHP population are difficult to determine, current research, when referenced collectively, can highlight various trends. Specifically, multiple different sources have demonstrated continued increases in HSA-qualified HDHP enrollment and HSAs since the mid-2000s.

Jul 31, 2018

Escalating Tariffs: Timeline and Potential Impact

Concerns over the U.S. trade deficit and trading partner trade practices have been a focus of the Trump Administration. Citing these concerns, the President has imposed tariffs under three U.S. laws that allow the Administration to impose trade restrictions based on certain criteria unilaterally: (1) Section 201 (Table 1) on U.S. imports of washing machines and solar products; (2) Section 232 () on U.S. imports of steel and aluminum, and potentially autos and uranium, and (3) Section 301 (Table 3) on U.S. imports from China. In 2017, U.S. imports of goods subject to the additional tariffs, which range from 10%-50%, totaled $80 billion (Table 4), a figure that would increase should additional proposed tariffs go into effect (Figure 1). While the tariffs may benefit some import-competing U.S. producers, they are also likely to increase costs for downstream users of imported products and some consumer prices. The Administration is likely using the tariffs in part to pressure affected countries into broader trade negotiations, such as the recently announced U.S.-EU trade liberalization talks, but it is unclear what specific outcomes the Administration is seeking. Figure 1. Trump Administration Tariffs and Affected Imports / Source: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas. Notes: Based on 2017 import values. Increased U.S. import tariffs may reduce demand for imports lowering annual import values. Congress delegated aspects of its constitutional authority to regulate foreign commerce to the President through these trade laws. These statutory authorities allow presidential action, based on agency investigations and other criteria, to impose import restrictions to address specific concerns (see text box). They have been used infrequently in the past two decades, in part due to the 1995 creation of the World Trade Organization (WTO) and its enforceable dispute settlement system. Prior to this Administration, U.S. import restrictions were last imposed under these trade laws in 1982 for Section 232, 2001 for Section 301, and 2002 for Section 201. U.S. Laws Related To Trump Administration Trade 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 Trade Expansion Act of 1962 – Allows the President to take action to adjust imports of products the Department of Commerce finds to be threatening to impair U.S. national security. Section 301 of 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. Increasing U.S. tariffs or imposing other import restrictions through these laws potentially opens the United States to complaints that it is violating its WTO and free trade agreement (FTA) commitments. Several U.S. trading partners, including Canada, China, Mexico, and the European Union have initiated dispute settlement proceedings and imposed retaliatory tariffs in response. The retaliatory tariffs in effect cover approximately $60 billion of U.S. annual exports, based on 2017 export data (Table 5). Retaliation may be amplifying the potential negative effects of the U.S. tariff measures. Economically, retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Lost market access resulting from the retaliatory tariffs may compound concerns raised by many U.S. exporters that the United States increasingly faces higher tariffs than some competitors in foreign markets as other countries proceed with trade liberalization agreements eliminating tariffs, such as the recently signed EU-Japan FTA. Negative effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. For example, in response to China’s retaliation against U.S. Section 301 tariffs, USTR has proposed counter-retaliation tariffs covering an additional $200 billion of U.S. imports, doubling the current tariff coverage and potentially affecting approximately half of U.S. annual imports from China. Additional actions by the Administration could result in considerably larger potential trade effects. On March 23, 2018, the Commerce Department initiated a new Section 232 investigation on U.S. auto and auto parts imports. Motor vehicles and parts accounted for $361 billion of U.S. imports in 2017. The EU, which accounts for more than $50 billion of U.S. motor vehicle and parts imports, has reportedly threatened comparable retaliatory measures. The globally integrated nature of the industry could complicate the impact of the tariffs. For example, affiliates of foreign motor vehicle firms operating in the United States exported more than $49 billion (nearly $70 billion including wholesale trade) in 2015. Although the auto investigation remains ongoing, the Administration has stated it will not impose tariffs while the recently announced U.S.-EU trade talks are ongoing. On July 18, the Administration began a fourth Section 232 investigation on U.S. uranium imports. Many Members of Congress and U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President’s actions. While some U.S. stakeholders support the President’s use of unilateral trade actions, many have raised concerns, including the Chairs of the Ways and Means and Senate Finance Committees, about potential negative impacts. In July 2017, Congress passed a nonbinding resolution directing appropriations bill conferees to include language giving Congress a role in Section 232 determinations, and several Members have introduced legislation that would constrain the President’s authority (e.g., S. 3013 and S. 3266). As it debates the Administration’s import restrictions, Congress may consider the following: Delegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? Economic Implications and Escalation. The Administration’s tariffs imposed to date cover approximately 3% of annual U.S. goods and services imports; pending investigations and threatened further counter-retaliations could potentially increase this to nearly one-third. While most economists estimate that the current level of tariffs is unlikely to have major effects on the overall U.S. economy, these effects may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. The potential drag on economic growth could also be significant if tit-for-tat action escalates. What are the Administration’s objectives from the tariff increases and do potential benefits justify the potential costs? International Trading System. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing the retaliation violates trade agreement obligations. What are the risks to the international trading system of continued unilateral action? The tables below provide a timeline of key events related to each U.S. trade action, as well as the range of potential trade volumes affected by the U.S. tariffs and U.S. trading partners’ retaliations. In addition to tariffs, the President has imposed quotas, or quantitative limits on U.S. imports of certain goods from specified countries, as well as tariff-rate quotas (TRQs), for which one tariff applies up to a specific quantity of imports and a higher tariff applies above that threshold. Timeline and Status of U.S. Trade Actions Table 1. Section 201 Global Safeguard Investigations Key Dates 5/17/2017 – U.S. industry petition initiates ITC injury investigation on solar cells/modules. 6/5/2017 – U.S. industry petition initiates ITC injury investigation on large residential washers. 9/22/2017 – ITC makes affirmative solar cells/modules injury determination. 10/5/2017 – ITC makes affirmative large residential washers injury determination. 11/13/2017 – ITC submits report and recommended action on solar cells/modules to President. 12/4/2017 – ITC submits report and recommended action on large residential washers to President. 1/23/2018 – President proclaims actions on solar cells/modules and large residential washers, effective February 7, 2018. U.S. Import Restriction Solar Cells: 4-year TRQ with 30% above quota tariff, descending 5% annually. Solar Modules: 4-year 30% tariff, descending 5% annually. Large Residential Washers: 3-year TRQ, 20% in quota tariff descending 2% annually, 50% above quota tariff descending 5% annually. Large Residential Washer Parts: 3-year TRQ, 50% above quota tariff, descending 5% annually. Countries Affected Canada excluded from the duties on washers. Certain developing countries excluded if they account for less than 3% individually or 9% collectively of U.S. imports of solar cells or large residential washers, respectively. All other countries included. Current Status Effective February 7, 2018. Table 2. Section 232 Steel and Aluminum Investigations Key Dates 4/2017 – Commerce initiates investigations on effects on national security of U.S. steel (4/19) and aluminum (4/26) imports. President signs memoranda prioritizing steel and aluminum investigations. 1/2018 – Commerce submits steel (1/11) and aluminum (1/17) findings and recommendations to President. 3/8/2018 – President proclaims steel and aluminum duties, effective March 23, 2018, temporarily exempting Canada and Mexico. 3/22/2018 – President temporarily exempts Argentina, Australia, Brazil, South Korea and the European Union (EU) in addition to Canada and Mexico from steel and aluminum duties. 4/30/2018 – President permanently exempts South Korea from steel duties, based on a quota arrangement. South Korea’s exemption from aluminum duties expires. 5/31/2018 – President permanently exempts Argentina, Australia, and Brazil from steel duties, and Argentina and Australia from aluminum duties, based on quota arrangements. Brazil’s exemption from aluminum duties, and Canada, Mexico, and EU’s exemptions from steel and aluminum duties expire. U.S. Import Restriction Aluminum: 10% tariffs on specified list of aluminum imports effective indefinitely. Steel: 25% tariffs on specified list of steel imports effective indefinitely. Countries Affected Aluminum: Australia and Argentina* permanently exempted. Steel: Australia, Argentina*, Brazil*, and South Korea* permanently exempted. All other countries included. (*) Quantitative import restrictions imposed in place of tariffs. Current Status Effective March 23, 2018. (Retaliation also in effect, see Table 5) Table 3. Section 301 China Trade Barriers Investigation Key Dates 8/14/2017 – President directs USTR to determine whether it should investigate China’s laws, policies, practices, or actions affecting U.S. intellectual property and forced technology transfers. 8/18/2017 – USTR announces it will proceed with Section 301 case against China. 3/22/2018 – USTR releases Section 301 report and finds that China’s policies are “unreasonable or discriminatory, and burden or restrict U.S. commerce.” President signs memorandum proposing to: (1) implement tariffs on certain Chinese imports; (2) initiate a WTO dispute settlement case against China’s discriminatory technology licensing; and (3) propose new investment restrictions on Chinese efforts to acquire sensitive U.S. technology. 4/3/2018 – USTR releases proposed list of 1,300 tariff lines to be subject to 25% import tariff. 4/5/2018 – President directs USTR to consider additional list of Chinese imports to be subject to 25% tariff if China retaliates. 5/29/2018 – President Trump announces U.S. plan to proceed with Section 301 actions, including 25% tariff on $50 billion of U.S. imports from China. 6/15/2018 – USTR releases two-stage plan to impose 25% tariffs on approximately $50 billion of Chinese imports. 6/18/2018 – President directs USTR to propose a list of imports from China valued at $200 billion that would be subject to an additional 10% tariff if China retaliates against Section 301 tariffs, and an additional $200 billion if such retaliation occurs again. 7/10/2018 – USTR releases list of proposed imports subject to additional 10% tariff accounting for approximately $200 billion of U.S. imports in 2017. U.S. Import Restriction Stage 1 – 25% import tariff on 818 U.S. imports (final, approx. $34 billion) Stage 2 – 25% import tariff on 228 U.S. imports (proposed, approx. $16 billion). Stage 3 – 10% import tariff on 6,031 U.S. imports (proposed, approx. $200 billion). Countries Affected China Current Status Stage 1 – Effective July 6, 2018. Stage 2 – Proposed, hearing 7/24 to determine final list. Stage 3 – Proposed, hearing 8/20 to determine final list. (Retaliation also in effect, see Table 5) Potential Trade Affected Table 4. Proposed and Existing U.S. Import Restrictions U.S. Trade Action U.S. Imports (millions, 2017) Additional Tariff Potential Tariff Revenue* (millions, 2017) Effective Date Section 201 Solar Cells/ Modules $5,196 TRQ (0%, 30%)/ 30% $1,559 February 7, 2018 Large Washers/ Washer Parts $1,927 TRQ (20%, 50%)/ TRQ (0%, 50%) $964 February 7, 2018 Total $7,123 $2,523 Section 232 Aluminum $16,643 10% $1,664 March 23, 2018 Steel $23,369 25% $5,842 March 23, 2018 Total $40,012 $7,507 Section 301 China - Stage 1 $32,262 25% $8,066 July 6, 2018 China - Stage 2 $14,116 25% $3,529 TBD China - Stage 3 $197,214 10% $19,721 TBD Total $243,592 $31,316 Total in Effect $79,975 $18,095 Total Formally Proposed $293,421 $41,345 Source: Calculations by CRS based on trade data from U.S. Census Bureau and tariff data from Administration notifications. Notes: (*) Potential tariff revenue estimated using 2017 import values. This does not account for potential fluctuations in demand resulting from the tariffs or other variables. It is useful for comparing the magnitude of the various tariff actions but should not be used to estimate actual tariff collection. TRQ tariff revenue estimated assuming all imports are subject to over quota tariff. Table 5. Proposed and Existing Retaliatory Actions Retaliatory Trade Action U.S. Exports (millions, 2017) Additional Tariff Potential Tariff Revenue* (millions, 2017) Effective Date Section 201 South Korea (Solar and Washers) $1,377** TBD $474** 2021 China (Solar and Washers) $654** TBD $220** 2021 Japan (Solar) $83** TBD $25** 2021 Total $2,114 $719 Section 232 Canada $12,748 10-25% $1,920 July 1, 2018 European Union (EU) – Stage 1 $3,204 10-25% $781 June 25, 2018 EU – Stage 2 $4,239 10-50% $931 2021 Mexico $3,691 7-25% $730 Partial-June 5, Full-July 5, 2018 Russia $3,008** TBD $515** TBD China $2,969 15-25% $645 April 2, 2018 Japan $1,911** TBD $440** TBD Turkey $1,788 5-40% $267 June 21, 2018 India $1,396 10-50% $240 June 21, 2018 Total $33.834 $6,469 Section 301 China – Stage 1 $33,834 25% $8,459 July 6, 2018 China – Stage 2 $14,345 25% $3,586 TBD Total $48,179 $12,045 Total in Effect $59,630 $13,042 Total Formally Proposed $85,247 $19,233 Source: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications. Notes: (*) Potential tariff revenue estimated using 2017 import values. This does not account for potential fluctuations in demand resulting from the tariffs or other variables. It is useful for comparing the magnitude of the various tariff actions but should not be used to estimate actual tariff collection. (**) Retaliation announcements did not include a product list or specific tariff values. Retaliatory export and tariff value estimated based on retaliation commensurate with U.S. tariff actions.

Jul 31, 2018

Commodity Credit Corporation: Q&A

On July 24, 2018, the U.S. Department of Agriculture (USDA) announced the use of up to $12 billion in funding authorized under the Commodity Credit Corporation (CCC) to compensate agricultural producers for losses in response to retaliatory tariffs on certain U.S. agricultural commodities. This has raised general questions related to the CCC, its use, and authorities. In brief, CCC makes payments to producers and conducts other operations to support U.S. agriculture. Typically, Congress passes laws, such as omnibus farm bills, that specifically direct USDA on how to administer these activities and in what amounts to fund them. The underlying authorization for CCC also provides the Secretary of Agriculture with general powers to take certain actions in support of U.S. agriculture at the discretion of the Secretary. This discretionary use has historically been somewhat intermittent and limited in its scale. It is this discretionary use of CCC authority that USDA cites for the supplemental, tariff-related activities it announced on July 24. This CRS Insight answers frequently asked questions about the CCC and its authorities and uses. For additional information on the CCC and its authorities, see CRS Report R44606, The Commodity Credit Corporation: In Brief. What Is the CCC? The CCC is a wholly government-owned entity that exists solely to finance authorized programs that support U.S. agriculture. It is federally chartered by the CCC Charter Act of 1948 (P.L. 80-806; 15 U.S.C. 714 et seq.), as amended, and subject to the supervision and direction of the Secretary of Agriculture at USDA. How Is the CCC Funded? CCC is responsible for the direct spending and credit guarantees used to finance the federal government’s agricultural commodity price support and related activities that are undertaken by authority of agricultural legislation (such as farm bills) or the CCC Charter Act itself. Borrowing Authority Most CCC-funded programs are classified as mandatory spending programs and therefore do not require annual discretionary appropriations in order to operate. CCC instead borrows from the U.S. Treasury to finance its programs. CCC has permanent, indefinite authority to borrow up to $30 billion from the Treasury. Cash Flow CCC recoups some of the money it expends for authorized activities (e.g., loan repayments, and fees), though not nearly as much money as it spends. CCC outlays, or expenditures, represent the total cash outlays of CCC-funded programs (e.g., loans, conservation programs, and commodity payments). Outlays are partially offset by receipts (e.g., loan repayment and fees), resulting in net expenditures, or cash flow. Appropriations CCC also has “net realized losses,” referred to as nonrecoverable losses. These are outlays that CCC will never recover, such as uncollectible loans, interest paid to the Treasury, direct payments to agricultural producers, and operating expenses. The net realized loss is the amount that CCC, by law, is authorized to receive through appropriations to replenish the CCC’s borrowing authority. The annual appropriation for CCC varies each year based on the net realized loss of the previous year. The change in appropriation does not indicate any action by Congress to change program support but rather reflects farm program payments and other CCC activities that fluctuate based on economic circumstances and weather. What Is the CCC Authorized to Do? The CCC serves as the funding institution for carrying out federal farm support programs, such as the farm-bill-authorized commodity and conservation programs, disaster assistance, research, and bioenergy development. In addition, the general powers of the CCC Charter Act provide broad authorities allowing CCC, at the direction of the Secretary of Agriculture, to carry out almost any operation that is consistent with the objective of supporting U.S. agriculture. It is these broad general powers that USDA references in its July 24 announcement related to tariff relief. Section 5 of the Charter Act (15 U.S.C. 714c) lists CCC’s general powers (paraphrased) Support agricultural commodity prices through loans, purchases, payments, and other operations. Make available materials and facilities in connection with the production and marketing of agricultural products. Procure commodities for sale to other government agencies; foreign governments; and domestic, foreign, or international relief or rehabilitation agencies and for domestic requirements. Remove and dispose of surplus agricultural commodities. Increase the domestic consumption of commodities by expanding markets or developing new and additional markets, marketing facilities, and uses for commodities. Export, cause to be exported, or aid in the development of foreign markets for commodities. Carry out authorized conservation or environmental programs. How Has USDA Used CCC’s General Powers in the Past? Recent discretionary uses of the CCC’s general powers have included the following: In June 2015, USDA announced the availability of $100 million from the CCC in matching grants under an administratively created Biofuel Infrastructure Partnership (BIP) initiative. Grants were aimed at overcoming infrastructure constraints that limit the market for biofuels. USDA justified the initiative by citing the marketing expansion and development authorities of the Charter Act. In 2016 USDA used CCC authority to create the Cotton Ginning Cost Share program, which provided payments based on cotton acres and average ginning costs. The program was initiated again in 2018 using CCC authorities similar to those cited in the BIP initiative. In April 2010, under a Brazil-U.S. memorandum of understanding, and in response to a World Trade Organization dispute settlement case initiated by Brazil over federal U.S. cotton policies, the U.S. agreed to make payments to Brazil. All payments were made from the CCC using authorities related to export promotion under the Charter Act. How Has Congress Expanded CCC’s Use? CCC activities are derived from authorities granted by Congress. Recent expansion in CCC’s use has generally come through omnibus farm bill legislation that has authorized new or additional mandatory spending by CCC. When Congress authorizes or expands CCC activities, it follows statutory and other budget rules that generally require offsets and other budgetary scorekeeping procedures. Has Congress Restricted CCC’s Use? CCC’s authorities have been restricted in recent annual appropriation bills. Beginning in FY2012, annual appropriation acts limited USDA’s use of CCC’s discretionary authority to remove surplus commodities and support prices. The FY2018 omnibus appropriation removed this limitation, effectively allowing USDA to use CCC’s full authority. Amendments in other acts of Congress to previously enacted farm bill programs have also restricted CCC by amending specific programs or activities or limiting funding for them.

Jul 27, 2018

Technology Service Providers for Banks

Jul 26, 2018

Background on Renewable Identification Numbers under the Renewable Fuel Standard

Jul 25, 2018

Animal and Plant Export Health Certificates in U.S. Agricultural Trade

An agricultural export health certificate verifies that agricultural products are prepared or raised in accordance with requirements of the importing country. In the United States, export health certificates are issued primarily by the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) for live animals, raw fruits and vegetables, and some grain products. APHIS ensures that U.S. exporters have met animal and plant health requirements for export. Other federal agencies, not discussed here, have authority over agricultural products outside of APHIS’s jurisdiction, such as oversight of processed foods and processed meats. APHIS serves as the principal U.S. scientific authority on verification of the animal and plant export health certificates when communicating with foreign governments. Animal and plant export health certificates assure foreign countries that their health requirements (e.g., disease-free livestock and plants) have been met and aim to keep diseases from crossing international borders. In FY2017, APHIS issued almost 675,000 export health certificates that helped facilitate more than $50 billion in plant and animal product exports. A major driver of the volume of agricultural exports was meeting key “sanitary and phytosanitary” (SPS) measures established by international organizations such as the World Trade Organization. SPS measures are the rules that governments employ to protect against diseases, pests, toxins, and other contaminants. These SPS measures are verified in animal and plant health certificates, which in turn help to facilitate agricultural trade. Failure to meet export health certificate requirements can result in shipments being rejected or delayed, resulting in additional expense to the exporter. Therefore, export health certification allows both parties to agree to mutual trade terms and in so doing facilitates agricultural trade. Congress has direct interest in export health certificates through annual appropriations for APHIS activities. The President’s proposed FY2019 budget for APHIS is $742 million (including building and facility costs), down 25% from FY2018 appropriations (P.L. 115-141). This proposed reduction decreases APHIS funding for “Safeguarding and Emergency Preparedness/Response,” which provides technical support for both exported and imported agricultural products. In addition to facilitating U.S. agricultural exports, this item also supports APHIS enforcement of animal and/or plant health requirements that protect the United States against the unintended introduction of animal and/or plant pests and diseases. Limiting APHIS’s ability to issue export health certificates could negatively impact U.S. agricultural exports. In May 2018, both the House and the Senate proposed roughly $1 billion for the APHIS FY2019 appropriations, an increase from FY2018, or roughly $260 million over the Administration’s request. Potential issues for congressional oversight include preparation for animal disease outbreaks, opening export markets, and potential U.S. agricultural trade barriers. The Trump Administration has entered into, or is currently negotiating, regional and bilateral free trade agreements (FTAs) that address SPS measures and export health certificates. Each importing country can have different import requirements—which sometimes result in “non-tariff measures” (NTMs). SPS requirements by individual countries can become the source of a trade dispute and may be used by some countries as a way to protect local markets, thereby discouraging U.S. exports.

Jul 23, 2018

U.S.-EU Trade and Investment Ties: Magnitude and Scope

Jul 20, 2018

The Trump Administration’s “Zero Tolerance” Immigration Enforcement Policy

For the last several years, Central American migrant families have arrived at the U.S.-Mexico border in relatively large numbers, many seeking asylum. While some request asylum at U.S. ports of entry, others do so after entering the United States “without inspection” (i.e., illegally) between U.S. ports of entry. On May 7, 2018, the Department of Justice (DOJ) implemented a zero tolerance policy toward illegal border crossing both to discourage illegal migration into the United States and to reduce the burden of processing asylum claims that Administration officials contend are often fraudulent. Under the zero tolerance policy, DOJ prosecutes all adult aliens apprehended crossing the border illegally, with no exception for asylum seekers or those with minor children. DOJ’s policy represents a change in the level of enforcement for an existing statute rather than a change in statute or regulation. Prior Administrations prosecuted illegal border crossings relatively infrequently. Criminally prosecuting adults for illegal border crossing requires detaining them in federal criminal facilities where children are not permitted. While DOJ and the Department of Homeland Security (DHS) have broad statutory authority to detain adult aliens, children must be detained according to guidelines established in the Flores Settlement Agreement (FSA), the Homeland Security Act of 2002, and the Trafficking Victims Protection Reauthorization Act of 2008. A 2015 judicial ruling held that children remain in family immigration detention for no more than 20 days. If parents cannot be released with them, children are treated as unaccompanied alien children and transferred to the Department of Health and Human Services’ (HHS’s) Office of Refugee Resettlement (ORR) for care and custody. The widely publicized family separations are a consequence of the Trump Administration’s 100% prosecution policy, not the result of any family separation policy. Since that policy was implemented, up to 3,000 children may have been separated from their parents. Following mostly critical public reaction, President Trump ordered DHS to maintain custody of alien families during the pendency of any criminal trial or immigration proceedings. DHS Customs and Border Protection (CBP) subsequently stopped referring most illegal border crossers to DOJ for criminal prosecution. A federal judge then mandated that all separated children be promptly reunited with their families. Another rejected DOJ’s request to modify the FSA to extend the 20-day child detention guideline. DHS has since reverted to some prior immigration enforcement policies. Family unit apprehensions, which increased from just over 11,000 in FY2012 to 68,560 in the first nine months of FY2018, are occurring within relatively low historical levels of total alien apprehensions. The national origin of recently apprehended aliens and families has shifted from mostly Mexican to mostly Central American. Administration officials and immigration enforcement advocates argue that measures like the zero tolerance policy are necessary to discourage migrants from coming to the United States and submitting fraudulent asylum requests. They maintain that alien family separation resulting from the prosecution of illegal border crossers mirrors that occurring under the U.S. criminal justice system policy where adults with custody of minor children are charged with a crime and held in jail, effectively separating them from their children. Immigrant advocates contend that migrant families are fleeing legitimate threats from countries with exceptionally high rates of gang violence, and that family separations resulting from the zero tolerance policy are cruel and violate fundamental human rights—such as the ability to request asylum. They maintain that the zero tolerance policy was hastily implemented and lacked planning for family reunification following criminal prosecutions. Some observers question the Trump Administration’s capacity to marshal sufficient resources to prosecute all illegal border crossers without additional resources. Others criticize the family separation policy in light of less expensive alternatives to detention.

Jul 20, 2018

The Black Lung Program, the Black Lung Disability Trust Fund, and the Excise Tax on Coal: Background and Policy Options

The federal government pays benefits to coal miners affected by coal workers’ pneumoconiosis (CWP, commonly referred to as black lung disease) and other lung diseases linked to coal mining in cases where responsible mine operators are not able to pay. In 2018, the monthly benefit for a miner with no dependents is $660.10. Benefits can be as much as $1,320.10 per month for miners with three or more dependents. Medical benefits are provided separately from disability benefits. Benefit payments and related administrative expenses in cases in which the responsible operators do not pay are paid out of the Black Lung Disability Trust Fund. The primary source of revenue for the trust fund is an excise tax on coal produced and sold domestically. If excise tax revenue is not sufficient to finance Black Lung Program benefits, the trust fund may borrow from the general fund of the Treasury. Coal Excise Tax Collections / Source: IRS SOI Bulletin Historical Table 20, available at https://www.irs.gov/statistics/soi-tax-stats-historical-table-20; and Department of the Treasury, Bureau of the Fiscal Service, Treasury Bulletin, March 2018, pp. 90-91, http://www.fiscal.treasury.gov. For 2018, the tax rates on coal are $1.10 per ton of underground-mined coal or $0.55 per ton of surface-mined coal, limited to 4.4% of the sales price. These rates were established in 1986. Starting in 2019, under current law, these tax rates are scheduled to be $0.50 per ton of underground-mined coal or $0.25 per ton of surface-mined coal, limited to 2% of the sales price. These are the rates that were set when the trust fund was established in 1977. The scheduled decline in the excise tax rates will likely put additional financial strain on a trust fund that already borrows from the general fund to meet obligations. The decline in domestic coal production, recent increases in the rate of CWP, and bankruptcies in the coal sector also contribute to the financial strain on the trust fund. The Black Lung Disability Trust Fund and associated excise tax on coal were established so that the coal industry, as opposed to taxpayers in general, would bear the burden associated with providing black lung benefits. Throughout its history, the Black Lung Disability Trust Fund has not raised revenues sufficient to meet obligations. As a result, at various points in time, Congress and the President have acted to increase the excise tax on coal, forgive or refinance trust fund debt, and modify black lung benefits eligibility. With the rate of the excise tax on coal scheduled to fall in 2019, the 115th Congress may again evaluate options for improving the fiscal condition of the Black Lung Disability Trust Fund, or other issues related to providing federal benefits to miners with black lung disease.

Jul 18, 2018

U.S. Army’s Initial Maneuver, Short-Range Air Defense (IM-SHORAD) System

The Current State of Army SHORAD The Army defines SHORAD as: Dedicated air defense artillery (ADA) and non-dedicated air defense capabilities that enable movement and maneuver by destroying, neutralizing or deterring low altitude air threats to defend critical fixed and semi-fixed assets and maneuver forces. The Army summarizes the recent history and current state of Army SHORAD in the following section: Short-range air defense artillery units were historically embedded in Army divisions, providing them with an organic capability to protect their critical assets against fixed-wing and rotary-wing aircraft. However, in the early 2000s, these ADA units were divested from the Army to meet force demands deemed more critical at that time. Decision-makers accepted the risk that threat aircraft might have on maneuver forces and other critical assets because we believed the Air Force could maintain air superiority. Thus, the short-range ADA force post-2005 was reduced to two battalions of active component Avenger and counter-rocket, artillery and mortar batteries and seven National Guard Avenger battalions; none of which are organic divisional elements. Defense against air threats in maneuver forces is currently limited to that provided by organic weapons and maneuver personnel. Renewed Emphasis on SHORAD Since 2005, there has been a dramatic increase in air and missile platforms that could threaten U.S. ground forces. The use of unmanned aerial systems (UASs) has increased exponentially, and UASs have been used successfully by both sides in the Russo-Ukrainian conflict. Furthermore, fixed-wing aircraft, attack helicopters, and cruise missiles continue to pose a significant threat to U.S. ground forces. In its 2015 report to the President and Congress, the National Commission on the Future of the Army noted, among things, there were unacceptable modernization shortfalls in SHORAD and those major shortfalls caused other concerns across a wide range of contingencies, including in Europe and the Korean peninsula. IM-SHORAD While Initial Maneuver, Short-Range Air Defense (IM-SHORAD) is primarily intended to defend maneuver forces against air threats, it also has the capability to engage a range of ground targets. The Army has requested $17 million in FY2019, $72.7 million in FY2020, $152 million in FY2021, $443 million in FY2022, and $291 million in FY2023 for IM-SHORAD procurement. IM-SHORAD is an Army directed requirement to address the urgent need to support Operation Atlantic Resolve to provide air and missile defense protection of Stryker and Armored Brigade Combat Teams. IM-SHORAD is the Army’s “initial” solution, and new weapons systems and weapons carriers might be incorporated into future variants. The Army reportedly plans to procure 144 IM-SHORAD Systems, with the objective to equip the first and second battalions with 36 systems apiece by FY2021 and a third and fourth battalion with 36 systems each by FY2022. The House and Senate Armed Services Committees have recommended fully funding the Army’s FY2019 IM SHORAD budget request. The House Appropriations Committee also recommends fully funding the FY2019 request, and the Senate Appropriations defense subcommittee has yet to markup its version of the FY2019 appropriations bill. The Army reportedly categorizes IM-SHORAD as a rapid acquisition system and is not scheduled to go through a standard defense acquisition development cycle, but is to be developed under the Other Transaction Authority (OTA) contracting process. IM-SHORAD uses the M-1126 Stryker combat vehicle as its chassis. The weapons and radar packages will reportedly be put together by Leonardo DRS and then installed on the Stryker by General Dynamics Land Systems (GDLS)—the vehicle’s original manufacturer. The Leonardo DRS–developed multi-purpose unmanned turret reportedly will include two Hellfire missiles capable of hitting ground and air targets; four Stinger missiles for less-well armored aerial targets in a launcher configured by Raytheon; a 30mm automatic cannon; a 7.62mm machine gun; an electronic warfare (EW) package to counter selected enemy systems; and a Rada (Israeli) multi-mission radar capable of tracking both ground and air targets. Potential Issues for Congress The Army describes IM-SHORAD as an “initial” or “short term” capability to address the lack of air defense capability in maneuver forces. If the Army eventually opts to not adopt IM-SHORAD as the long-term solution for maneuver force air defense, what are the Army’s subsequent plans for this potentially $1 billion plus program? Would this capability be realigned to protect other Army assets, inactivated and placed in storage, or would it be made available to other countries under Foreign Military Sales? While IM-SHORAD has the capability to engage ground targets and threats, given the criticality of the potential air threat to maneuver forces and the somewhat limited number of IM-SHORAD systems available, is having a ground attack capability in the Army’s best interest? Will the wheeled IM-SHORAD system have sufficient mobility and survivability to provide air defense protection to Armored Brigade Combat Teams that consist primarily of heavily armored and tracked M-1 Abrams tanks and M-2 Bradley Infantry Fighting Vehicles? Do IM-SHORAD’s Stinger missiles have sufficient capability to destroy armored attack helicopters and ground attack fixed-wing aircraft or would some other type of weapon be better suited to address these “heavier” threats? If so, could another weapon be easily integrated into the current IM-SHORAD configuration? While IM-SHORAD has a limited organic onboard capability to detect, track, and engage enemy air threats, it is also expected to be part of the Army’s overall integrated air and missile defense architecture. As such, how will IM-SHORAD integrate with and depend upon the Army’s Integrated Air and Missile Defense Battle Command System (IBCS)—a program that has experienced noteworthy developmental challenges? What are some of the benefits and risks associated with the Army’s decision to procure IM-SHORAD under an Other Transaction Authority (OTA) contracting process?

Jul 18, 2018

Energy and Water Development: FY2019 Appropriations

The Energy and Water Development appropriations bill provides funding for civil works projects of the Army Corps of Engineers (Corps); the Department of the Interior’s Bureau of Reclamation (Reclamation) and Central Utah Project (CUP); the Department of Energy (DOE); the Nuclear Regulatory Commission (NRC); and several other independent agencies. DOE typically accounts for about 80% of the bill’s total funding. President Trump submitted his FY2019 budget proposal to Congress on February 12, 2018. The President’s budget requests for agencies included in the Energy and Water Development appropriations bill totaled $36.341 billion (excluding rescissions)—$6.871 billion (15.9%) below the FY2018 appropriation. A $375 million increase (3.5%) was proposed for DOE nuclear weapons activities. In contrast, the two versions of the FY2019 Energy and Water Development Appropriations bill passed by the House and Senate (Division A of H.R. 5895, H.Rept. 115-697, S.Rept. 115-258) would boost total appropriations above the FY2018 level. FY2018 Energy and Water Development funding was included in the Consolidated Appropriations Act, 2018 (P.L. 115-141), signed by the President on March 23, 2018. Major Energy and Water Development funding issues for FY2019 include Water Agency Funding Reductions. The Trump Administration requested reductions of 29.9% for the Corps and 26.5% for Reclamation for FY2019. Those cuts were largely not followed by the House and Senate. Termination of Energy Efficiency Grants. DOE’s Weatherization Assistance Program and State Energy Program would be terminated under the FY2019 budget request. Congress did not eliminate the grants for FY2018 and the proposed cuts were not included in the FY2019 House and Senate bills. Reductions in Energy Research and Development. Under the FY2019 budget request, DOE research and development appropriations would be reduced for energy efficiency and renewable energy (EERE) by 65.5%, nuclear energy by 37.2%, and fossil energy by 30.9%. The House and Senate bills largely did not include the proposed reductions. Energy R&D funding was increased 12.9% from its FY2017 level by the FY2018 Consolidated Appropriations Act. Nuclear Waste Repository. The Administration’s budget request would provide new funding for the first time since FY2010 for a proposed nuclear waste repository at Yucca Mountain, NV. DOE would receive $110 million to seek an NRC license for the repository, and NRC would receive $47.7 million to consider DOE’s application. DOE would also receive $10 million to develop interim nuclear waste storage facilities. The House bill would provide an additional $100 million to DOE for Yucca Mountain licensing above the request, while the Senate bill includes no Yucca Mountain funds. An Administration funding request for the Yucca Mountain project in FY2018 was not included in the FY2018 Consolidated Appropriations Act. Elimination of Advanced Research Projects Agency—Energy (ARPA-E). The Trump Administration proposed to eliminate funds for new research projects by ARPA-E in FY2019, and called for terminating the program after currently funded projects were completed. The House approved an 8.0% cut and the Senate voted for a 6.1% increase. A similar proposal to terminate ARPA-E in FY2018 was not followed by Congress, with the FY2018 Consolidated Appropriations Act boosting funding for ARPA-E by 15.5%—to $353.3 million. Low-Yield Warhead. DOE’s FY2019 budget documents proposed a low-yield version of the W76 LEP nuclear warhead. DOE’s initial FY2019 budget request did not request any funding specifically allocated to this modification, but the White House included $65 million for it in a budget amendment package submitted to Congress on April 13, 2018. Plutonium Disposition Plant Termination. The Administration proposed in FY2018 and FY2019 to terminate construction of the Mixed-Oxide Fuel Fabrication Facility (MFFF), which would make fuel for nuclear reactors out of surplus weapons plutonium. The FY2018 Consolidated Appropriations Act conforms to provisions in the National Defense Authorization Act, 2018 (P.L. 115-91) that allow DOE to pursue an alternative plutonium disposal program if sufficient cost savings are projected. The FY2019 House bill includes a similar provision, while the Senate bill provides funding for termination. The Administration certified under P.L. 115-91 on May 10, 2018, that the cost-saving requirement for termination of MFFF would be met.

Jul 17, 2018

Financial Reform: Overview of the Volcker Rule

Jul 9, 2018

Section 232 Investigations: Overview and Issues for Congress

Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) provides the President with the ability to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce (Commerce) that the product under investigation “is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.” Section 232 actions are of interest to Congress because they are a delegation of Congress’ constitutional authority “to regulate Commerce with foreign Nations.” They also have important potential economic and policy implications for the United States. Global overcapacity in steel and aluminum production, mainly driven by China, has been an ongoing concern of Congress. The George W. Bush, Obama, and Trump Administrations each engaged in multilateral discussions to address global steel capacity reduction through the Organization for Economic Cooperation and Development (OECD). While the United States has extensive antidumping and countervailing duties on Chinese steel imports to counter China’s unfair trade practices, steel industry and other experts argue that the magnitude of Chinese production acts to depress prices globally. Based on concerns about global overcapacity and certain trade practices, in April 2017 the Trump Administration initiated Section 232 investigations on U.S. steel and aluminum imports. Effective March 23, 2018, President Trump applied 25% and 10% tariffs, respectively, on certain steel and aluminum imports. The President temporarily exempted several countries from the tariffs pending negotiations on potential alternative measures. Permanent tariff exemptions in exchange for quantitative limitations on U.S. imports were eventually announced covering steel for Brazil and South Korea, and both steel and aluminum for Argentina. Australia was exempted from both tariffs with no quantitative restrictions. Commerce is also managing a process for potential product exclusions to limit potential negative domestic effects the tariff may have on U.S. businesses and consumers. To date, over 20,000 applications have been received. U.S. trading partners are challenging the tariffs under World Trade Organization (WTO) rules and have threatened or enacted retaliation, risking potential escalation of retaliatory tariffs. Some analysts view the U.S. unilateral actions as potentially undermining WTO rules, which generally allow parties to act to protect “national security.” Congress enacted Section 232 during the Cold War when national security issues were at the forefront of national debate. The Trade Expansion Act sets clear steps and timelines for Section 232 investigations and actions, but allows the President to make a final determination over the appropriate action to take following an affirmative finding by Commerce that the relevant imports threaten to impair national security. Prior to the Trump Administration, there have been 26 Section 232 investigations resulting in nine affirmative findings by Commerce. In six of those cases the President imposed a trade action. On May 23, 2018, the Trump Administration initiated an additional Section 232 investigation on U.S. automobile and automobile part imports. This investigation as well as the Administration’s decision to apply the steel and aluminum tariffs on imports from Canada, Mexico, and the EU—all major suppliers of the affected imports—has prompted further questions by some Members of Congress and trade policy analysts on the appropriate use of the trade statute and the proper interpretation of threats to national security on which Section 232 investigations are based. These actions have also intensified debate over potential legislation to constrain the President’s authority with respect to Section 232. The steel and aluminum tariffs are affecting various stakeholders in the U.S. economy, prompting reactions from several Members of Congress, some in support and others voicing concerns. In general, the tariffs are expected to benefit the domestic steel and aluminum industries, leading to potential higher steel and aluminum prices and expansion in production in those sectors, while potentially negatively affecting consumers and downstream domestic industries (e.g., manufacturing and construction) through higher costs. Congress may exercise its authority on this issue by conducting oversight of the Section 232 investigations, examining the potential economic and broader policy effects of the tariffs, or potentially considering legislation to revoke or further limit the authority it previously delegated to the President.

Jul 5, 2018

The Congressional Review Act: Determining Which “Rules” Must Be Submitted to Congress

The Congressional Review Act (CRA) allows Congress to review certain types of federal agency actions that fall under the statutory category of “rules.” The CRA requires that agencies report their rules to Congress and provides special procedures under which Congress can consider legislation to overturn those rules. A joint resolution of disapproval will become effective once both houses of Congress pass a joint resolution and it is signed by the President, or if Congress overrides the President’s veto. The CRA generally adopts a broad definition of the word “rule” from the Administrative Procedure Act (APA), defining a rule as “the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.” The CRA, however, provides three exceptions to this broad definition: any rule of particular applicability, including a rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefor, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing; any rule relating to agency management or personnel; or any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties. The class of rules the CRA covers is broader than the category of rules that are subject to the APA’s notice-and-comment requirements. As such, some agency actions, such as guidance documents, that are not subject to notice-and-comment rulemaking procedures may still be considered rules under the CRA and thus could be overturned using the CRA’s procedures. The effect of Congress disapproving a rule that is not subject to notice-and-comment rulemaking may be subject to debate, given that such rules are generally viewed to lack any legal effect in the first place. Nonetheless, the CRA does encompass some such rules, as highlighted by the recent enactment of a CRA resolution overturning a bulletin from the Consumer Financial Protection Bureau that was not subject to the notice-and-comment procedures. Even if an agency action falls under the CRA’s definition of “rule,” however, the expedited procedures for considering legislation to overturn the rule only become available when the agency submits the rule to Congress. In many cases in which agencies take actions that fall under the scope of a “rule” but have not gone through notice-and-comment rulemaking procedures, agencies fail to submit those rules. Thus, questions have arisen as to how Members can avail themselves of the CRA’s special fast-track procedures if the agency has not submitted the action to Congress. To protect its prerogative to review agency rules under the CRA, Congress and the Government Accountability Office (GAO) have developed an ad hoc process in which Members can request that GAO provide a formal legal opinion on whether a particular agency action qualifies as a rule under the CRA. If GAO concludes that the action in question can be considered a rule under the CRA, Congress has treated the publication of the GAO opinion in the Congressional Record as constructive submission of the rule. In other words, an affirmative opinion from GAO can allow Congress to use the CRA procedures to consider legislation overturning an agency action despite the agency not submitting that action to Congress.

Jul 5, 2018

Rural Highways

Of the nation’s 4.1 million miles of public access roads, 2.9 million, or 71%, are in rural areas. Rural roads account for about 30% of national vehicle miles traveled. However, with many rural areas experiencing population decline, states increasingly are struggling to maintain roads with diminishing traffic while at the same time meeting the needs of growing rural and metropolitan areas. Federal highway programs do not generally specify how much federal funding is used on roads in rural areas. This is determined by the states. Most federal highway money, however, may be used only for a designated network of highways. While Interstate Highways and other high-volume roads in rural areas are eligible for these funds, most smaller rural roads are not. It is these roads, often under the control of county or township governments, that are most likely to have poor pavement and deficient bridges. Rural roads received about 37% of federal highway funds during FY2009-FY2015, although they accounted for about 30% of annual vehicle miles traveled. As a result, federal-aid-eligible rural roads are in comparatively good condition: 49% of rural roads were determined to offer good ride quality in 2016, compared with 27% of urban roads. Although 1 in 10 rural bridges is structurally deficient, the number of deficient rural bridges has declined by 41% since 2000. When it comes to safety, on the other hand, rural roads lag; the fatal accident rate on rural roads is over twice the rate on urban roads. The Federal Highway Administration has generally urged states to select highway projects based on a broad view of transportation benefits; the FHWA has asserted that transportation can shape development but cannot create development where there is no demand. However, an April 2018 statement by the U.S. Department of Transportation (DOT) contended “underinvestment in rural transportation systems has allowed a slow and steady decline in the transportation routes that connect rural American communities.” DOT said that it intends to favor rural areas in awarding discretionary grants for highway projects. If it seeks to focus on the condition of rural roads and bridges, Congress could expand the network of federal-aid highways to include more local roads; could create new programs that would specifically target transportation in rural areas; and/or could fund an expansion of the Interstate System. Without an increase in overall funding levels, however, such measures might cause states to spread their federal highway funds across wider networks of highways, making it more difficult for them to marshal the funds needed to undertake large and costly projects. Alternatively, given the population loss in some rural areas, Congress might provide incentives for states and counties to close or pulverize underused roads back to gravel and close underused and structurally deficient rural bridges, encouraging them to devote more of their resources to more heavily used roads.

Jul 5, 2018

FY2019 Funding for CCS and Other DOE Fossil Energy R&D

Jul 2, 2018

Section 232 of the Trade Expansion Act of 1962

Jun 29, 2018

Hospital Charity Care and Related Reporting Requirements Under Medicare and the Internal Revenue Code

Jun 28, 2018

Trade Deficits and U.S. Trade Policy

The economic effects of the U.S. trade deficit have been a topic of long-standing congressional interest. The U.S. Constitution grants authority to Congress to regulate commerce with foreign nations and to lay and collect duties, and Congress exercises this authority in numerous ways. These include oversight of trade policy and consideration of legislation to implement trade agreements and to authorize trade programs. In some cases, Congress has delegated certain authorities over trade policy to the Executive Branch: for example, to facilitate trade negotiations. As part of efforts to examine U.S. trade policy and key trading relationships, Congress and previous Administrations have focused on the trade deficit at times, but generally have not implemented specific measures to lower the trade deficit. Nor has reducing bilateral trade deficits been a major objective in evaluating or negotiating U.S. free trade agreements (FTAs) and implementing trade laws. Previous Administrations rarely linked trade deficits and import tariffs with U.S. national security. The Trump Administration, however, is using the U.S. trade deficit as a barometer for evaluating the success or failure of the global trading system, U.S. trade policy, and bilateral trade relations with various countries. It also characterizes the trade deficit as harming the performance and national security of the U.S. economy. The Trump Administration’s approach contrasts with the views of most economists, who argue that the overall U.S. trade deficit stems from U.S. macroeconomic policies that create a savings and investment imbalance in which domestic sources of capital are not sufficient to meet domestic capital demands. As such, attempting to alter the trade deficit without addressing the underlying macroeconomic issues will likely be counterproductive and create distortions in the economy. Some analysts argue that trade agreements play an important role in the U.S. trade deficit; they contend the agreements have failed to provide U.S. exporters with reciprocal treatment or have exposed U.S. producers to increased competition. Most economists, however, question both the role that trade agreements play in determining the trade deficit and the position that the trade deficit is substantially the product of unfair treatment. The Trump Administration’s approach does not rule out the possibility that some countries may not be fully abiding by international trade agreements and rules, or may be maintaining certain trade barriers. Such actions may distort market performance and erode public support for the international trade system. As a result, addressing these issues and continuing to negotiate new agreements to remove trade barriers are likely to have benefits by improving efficiency and creating a level playing field in the global trading system. Nevertheless, given the macroeconomic origins of the trade deficit, as is generally accepted, addressing such distortions may alter the composition of U.S. trade among trading partners and commodities, but would be unlikely to affect the overall U.S. trade deficit. Most economists also question the role the trade deficit plays in affecting jobs, wages, and the distribution of income in the U.S. economy. One concern expressed by economists and others is the debt accumulation associated with sustained trade deficits. They argue that the long-term impact on the U.S. economy of borrowing to finance imports depends on whether those funds are used for greater investments in productive capital with high returns that raise future standards of living, or whether they are used for current consumption. These concerns and the various policy approaches that have been used to alter the savings-investment imbalance in the economy are beyond the scope of this report. Most economists generally contend that from the perspective of the economy as a whole, both consumers and producers benefit from liberalized trade and that the gains for the economy as a whole outweigh the costs, irrespective of the bilateral trade deficit or surplus. Most economists argue that the economy as a whole operates more efficiently as a result of competition through international trade and that consumers and producers who may use imported inputs throughout the economy experience a wider variety of goods and services at varying levels of quality and price than would be possible in an economy closed to international trade. They also contend that trade may have a long-term positive dynamic effect on an economy that enhances both production and employment. Standard economic theory also recognizes that some workers and producers in the economy may experience a disproportionate share of the short-term adjustment costs that are associated with shifts in resources stemming from greater international competition. Although the attendant adjustment costs for businesses and labor are difficult to measure, some estimates suggest they may be significant over the short run and can entail dislocations for some segments of the labor force, companies, and communities. Policymakers generally have aimed to address such dislocations through specific training and other readjustment assistance programs, among other trade-related measures.

Jun 28, 2018

U.S. Intelligence Community Establishment Provisions

Jun 27, 2018

Legislative Actions to Modify the Affordable Care Act in the 111th-115th Congresses

The Patient Protection and Affordable Care Act (ACA; P.L. 111-148) was signed into law on March 23, 2010. The law comprises numerous provisions in 10 titles. The provisions in Titles I-VIII largely relate to how health care in the United States is financed, organized, and delivered. Title IX contains revenue provisions. Title X reauthorizes the Indian Health Care Improvement Act, establishes some new programs and requirements, and amends provisions included in the other nine titles of the ACA. On March 30, 2010, the Health Care and Education Reconciliation Act (HCERA; P.L. 111-152) was signed into law, which included new provisions and amended several ACA provisions. Since enactment of the ACA and HCERA, lawmakers have repeatedly debated the laws’ implementation and considered bills to repeal, defund, or otherwise amend them. This report summarizes legislative actions taken during the 111th-115th Congresses to modify the health care-related provisions of the ACA and HCERA. The first part of the report provides a brief overview of the laws’ core provisions and their impact on federal spending and health insurance coverage as context for the other material presented in the report. The second part of the report includes Table 2, which summarizes laws enacted during the 111th-115th Congresses that modified ACA or HCERA provisions. The third part of the report lists bills passed in the House or the Senate during the 111th-115th Congresses that would have modified ACA or HCERA provisions, had they been enacted. Identifying legislation that modifies the ACA and HCERA has become increasingly difficult over the years. This is because of the vast number of ACA and HCERA provisions, their complexity, and the fact that these provisions are codified in many different parts of the U.S. Code. As a result, the legislation presented in this report’s tables may not include all enacted legislation that modifies the ACA or HCERA, or all House- or Senate-passed legislation that would have modified the ACA or HCERA, had it been enacted. Due to the increasing complexity of tracking such legislation and concerns about the ability to do so authoritatively, the Congressional Research Service (CRS) does not intend to update this report.

Jun 27, 2018

Private Flood Insurance and the National Flood Insurance Program

The National Flood Insurance Program (NFIP) is the main source of primary flood insurance coverage in the United States, collecting $3.5 billion in premiums for over five million flood insurance policies. This is in contrast to the majority of other property and casualty risks, such as damage from fire or accidents, which are covered by a broad array of private insurance companies. One of the primary reasons behind the creation of the NFIP in 1968 was the withdrawal by private insurers from providing flood insurance coverage, leaving flood victims largely reliant on federal disaster assistance to recover after a flood. While private insurers have taken on relatively little flood risk, they have been involved in the administration of the NFIP through sales and servicing of policies and claims. In recent years, private insurers have expressed increased interest in providing flood coverage. Advances in the analytics and data used to quantify flood risk along with increases in capital market capacities may allow private insurers to take on flood risks that they shunned in the past. Private flood insurance may offer some advantages over the NFIP, including more flexible flood polices, integrated coverage with homeowners insurance, or lower cost coverage for some consumers. Private marketing might also increase the overall amount of flood coverage purchased, reducing the amount of extraordinary disaster assistance necessary to be provided by the federal government. Increased private coverage could reduce the overall financial risk to the NFIP, reducing the amount of NFIP borrowing necessary after major disasters. Increasing private insurance, however, may have some downsides compared to the NFIP. Private coverage would not be guaranteed to be available to all floodplain residents, unlike the NFIP, and consumer protections could vary in different states. The role of the NFIP has historically been broader than just providing insurance. As currently authorized, the NFIP also encompasses social goals to provide flood insurance in flood-prone areas to property owners who otherwise would not be able to obtain it, and to reduce government’s cost after floods. Through flood mapping and mitigation efforts, the NFIP has tried to reduce the future impact of floods, and it is unclear how effectively the NFIP could play this broader role if private insurance became a large part of the flood marketplace. Increased private insurance could also have an impact on the subsidies that are provided for some consumers through the NFIP. The 2012 reauthorization of the NFIP (Title II of P.L. 112-141) included provisions encouraging private flood insurance; however, various barriers have remained. Legislation passed the House in the 114th Congress (H.R. 2901) which was intended to loosen requirements on private flood insurance, but it was not taken up by the Senate before the end of the 114th Congress. The NFIP is currently operating under a short-term reauthorization until July 31, 2018. A bill for longer term reauthorization (H.R. 2874) passed the House in November 2017. Three bills (S. 1313, S. 1368, and S. 1571) have been introduced in the Senate, but none have been acted on by the full Senate. H.R. 2874 includes several provisions intended to promote private flood insurance. S. 1313 mirrors some of these provisions, while the other Senate bills have fewer provisions promoting private flood insurance. This report describes the current role of private insurers in U.S. flood insurance, and discusses barriers to expanding private sector involvement. The report considers potential effects of increased private sector involvement in the U.S. flood market, both for the NFIP and for consumers. Finally, the report outlines the provisions relevant to private flood insurance in the House and Senate NFIP reauthorization bills.

Jun 26, 2018

The Special Registration for Telemedicine: In Brief

Suppress: In response to the concerns about the opioid epidemic, the Trump Administration proposed expanding access to telemedicine services such as for the prescribing of medicine used for substance abuse or mental health treatment. Telemedicine is the electronic delivery of a clinical health care service via a technological method. Section 311(h)(1) of the Controlled Substance Act (CSA), which was added by Section 3 of the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (Ryan Haight Act; P.L. 110-425), authorized the special registration for telemedicine with the goal of increasing patients’ access to practitioners that can prescribe controlled substances via telemedicine in limited circumstances. Section 802(21) of Title 21, U.S.C. defines a practitioner as a physician, dentist, veterinarian, scientific investigator, pharmacy, hospital, or other person licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he practices or does research, to distribute, dispense, conduct research with respect to, administer, or use in teaching or chemical analysis, a controlled substance in the course of professional practice or research. The registration would enable a practitioner to deliver, distribute, dispense, or prescribe via telemedicine a controlled substance to a patient who has not been medically examined in-person by the prescribing practitioner. For example in the event of an opioid overdose, a patient might need a prescription for an opioid antagonist such as naloxone from a practitioner who has never examined the patient in-person prior to the telemedicine encounter. While the CSA authorized the special registration for telemedicine, practitioners have not been able to apply for this special registration. The Drug Enforcement Administration (DEA) has yet to finalize a rule on the registration’s application process and procedures and the limited circumstances that warrant it. As a result, Congress is considering the Special Registration for Telemedicine Clarification Act of 2018 (H.R. 5483). H.R. 5483 would require the DEA, in a joint effort with the Secretary of the Department of Health and Human Services (HHS), to issue a rule on the special registration for telemedicine within one year of the enactment of the bill (as amended). On June 12, 2018, the House passed H.R. 5483 under suspension of the rules. On June 13, 2018, the Senate referred the bill to the Senate Health, Education, Labor, and Pensions Committee.

Jun 26, 2018

Lebanese Hezbollah

Jun 22, 2018

FEMA and SBA Disaster Assistance for Individuals and Households: Application Process, Determinations, and Appeals

The Federal Emergency Management Agency’s (FEMA) Individual Assistance (IA) program and the Small Business Administration’s (SBA’s) Disaster Loan Program are the federal government’s two primary sources of financial assistance to help individuals and households recover and rebuild from a major disaster. In many cases, disaster survivors find that they need assistance from both of these programs in addition to other sources of assistance including private insurance, state and local government assistance, and assistance from private voluntary organizations. Though FEMA IA and the SBA Disaster Loan Program are separate programs administered by different agencies, in many ways they are interconnected. SBA and FEMA share real-time data on disaster grant and loan approvals to identify potential duplication of benefits while providing individuals and households with federal assistance that can be used in conjunction with each other to meet recovery needs. The two programs are also interconnected in the way they are administered to determine loan and grant eligibility. Furthermore, eligibility and assistance from one source can affect eligibility and assistance from the other source. It could be argued the overlap between the two programs provides an effective means to identify duplication and provide federal assistance; however, the overlap also causes some confusion. Some in Congress are concerned that elements of the application process are not entirely known. For instance, it is unclear to some what criteria are used to determine assistance eligibility as well as how decisions are made with respect to whether an applicant should be provided a grant or a loan (or both). It is also unclear whether FEMA and SBA determine eligibility on a case-by-case basis, or if eligibility criteria are applied uniformly. This report provides an overview of the two programs including discussions about: how declarations put the programs into effect; the application process for both programs; the criteria used by FEMA and the SBA to determine assistance; and the FEMA and SBA appeal processes. The report concludes with policy observations and considerations for Congress.

Jun 22, 2018

Overview of FY2019 Appropriations for Commerce, Justice, Science, and Related Agencies (CJS)

This report describes actions taken by the Trump Administration and Congress to provide FY2019 funding for Commerce, Justice, Science, and Related Agencies (CJS) accounts. It also provides an overview of enacted FY2018 funding for agencies and bureaus funded as part of annual CJS appropriations acts. For FY2018, Congress and the President provided a total of $72.119 billion in funding for CJS. This included $70.921 billion in regular funding provided in the Consolidated Appropriations Act, 2018 (P.L. 115-141) and $1.198 billion in emergency-designated funding provided in the Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 (P.L. 115-123). The Administration requests $66.555 billion for CJS for FY2019, which is 7.7% less than total FY2018 funding and 6.2% less than regular FY2018 funding (which excludes emergency-designated funding). The Administration requests $9.797 billion for the Department of Commerce, $28.835 billion for the Department of Justice, $27.372 billion for the science agencies, and $551 million for the related agencies. The Administration’s budget proposes eliminating funding for several CJS agencies and accounts, including the Economic Development Administration and the Legal Services Corporation. The Administration’s budget proposes moving funding for the High Intensity Drug Trafficking Areas program from the Office of National Drug Control Policy to the Drug Enforcement Administration, closing the Community Oriented Policing Services (COPS) Office and moving its responsibilities to the Office of Justice Programs (OJP), and a new account structure for the National Aeronautics and Space Administration. The bill reported by the House Committee on Appropriations (H.R. 5952) would provide a total of $73.923 billion for CJS for FY2019, an amount that is 4.2% greater than regular FY2018 funding (which excludes emergency-designated funding) and 11.1% greater than the Administration’s request. The bill would provide $12.106 billion for the Department of Commerce, $31.113 billion for the Department of Justice, $29.728 billion for the science agencies, and $976 million for the related agencies. The committee largely declined to adopt many of the Administration’s proposals to eliminate funding for several CJS agencies and accounts, though the committee-reported bill would move funding for the COPS program to OJP and it includes the Administration’s proposed account structure for NASA. The bill reported by the Senate Committee on Appropriations (S. 3072) would provide a total of $72.648 billion for CJS for FY2019, an amount that is 2.4% more than regular FY2018 funding (which excludes emergency-designated funding) and 9.2% more than the Administration’s request. The bill would provide $11.572 billion for the Department of Commerce, $30.699 billion for the Department of Justice, $29.400 billion for the science agencies, and $977 million for the related agencies. The Senate Committee on Appropriations largely declined to adopt many of the proposals put forth by the Administration in its FY2019 budget. Unlike the House committee-reported bill, S. 3072 would fund the COPS program through its own account and the committee did not include the Administration’s new account structure for NASA.

Jun 20, 2018

Agriculture and Related Agencies: FY2019 Appropriations

The Agriculture appropriations bill funds the U.S. Department of Agriculture (USDA) except for the Forest Service. It also funds the Food and Drug Administration (FDA) and—in even-numbered fiscal years—the Commodity Futures Trading Commission (CFTC). Agriculture appropriations include both mandatory and discretionary spending. Discretionary amounts, though, are the primary focus during the bill’s development, since mandatory amounts are generally set by authorizing laws such as the farm bill. The largest discretionary spending items are the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); agricultural research; FDA; rural development; foreign food aid and trade; farm assistance programs; food safety inspection; conservation; and animal and plant health programs. The main mandatory spending items are the Supplemental Nutrition Assistance Program (SNAP), child nutrition, crop insurance, and the farm commodity and conservation programs paid by the Commodity Credit Corporation. For FY2019, both the House and Senate Appropriations Committees reported Agriculture appropriations bills (H.R. 5961, S. 2976) in May 2018. Neither bill has gone to the floor. The Trump Administration requested $17 billion for discretionary-funded accounts within the jurisdiction of Agriculture appropriations, which would be a reduction of $6.2 billion from FY2018 (-27%). In general, both the House-reported and Senate-reported bills reject most of the Administration’s proposed reductions. The discretionary total of the House-reported bill is $23.23 billion, which would be $14 million less than enacted in FY2018 (-0.1%). The discretionary total of the Senate-reported bill is also $23.23 billion. However, the Senate bill’s total would be $229 million more than enacted in FY2018 (+1%) on a comparable basis that excludes the CFTC. The Senate-reported bill would provide about $250 million more than the House-passed bill on a comparable basis. The primary changes at the agency level that comprise the differences between the bills and from FY2018 include the following: Both the House and Senate bills would increase FDA appropriations (+$308 million in the House bill; +$159 million in the Senate bill), though neither continues extra funding for the opioid crisis that was in the FY2018 appropriation. Both bills increase appropriations for animal and plant health programs (+$16 million to +$19 million). The House bill would provide more base funding for rural water and waste disposal (+$81 million), but none of the extra money that was provided separately in FY2018. The Senate bill would not change the base funding for rural water but continues $400 million of the extra funding from last year. For rural broadband, both the House and Senate bills would continue extra funding from a FY2018 pilot ($550 million in the House bill; $425 million in the Senate bill). The House bill would increase appropriations for agricultural research (+$79 million), and the Senate bill would increase Agricultural Research Service programming (+98 million) but would not provide any money for construction (-$141 million). Both bills provide less for WIC (-$175 million in the House bill, and -$25 million in the Senate bill), though the Senate bill has a larger rescission from prior-year WIC funds than does the House bill. The House bill would reduce base funding for the international Food for Peace program (-$100 million) and does not renew extra funding provided last year (-$116 million), while the Senate bill would keep it constant overall. The appropriations also carries mandatory spending—largely determined in separate authorizing laws—that would total $122 billion. Thus, the overall total of the both bills is about $145 billion. Both bills contain policy provisions affecting disaster programs, rural definitions, industrial hemp, animal products, nutrition programs, dietary guidelines, CFTC, and tobacco products.

Jun 18, 2018

Human Rights and Anti-Corruption Sanctions: The Global Magnitsky Human Rights Accountability Act

Jun 15, 2018

FY2020 Foreign Operations Appropriations: Targeting Foreign Corruption and Human Rights Violations

Jun 14, 2018

The June 12 Trump-Kim Jong-un Summit

On June 12, 2018, President Donald Trump and North Korean leader Kim Jong-un met in Singapore to discuss North Korea’s nuclear program, building a peace regime on the Korean Peninsula, and the future of U.S. relations with North Korea (known officially as the Democratic People’s Republic of Korea, or DPRK). During their summit, the first-ever meeting between leaders of the two countries, Trump and Kim issued a brief joint statement in which Trump “committed to provide security guarantees to the DPRK,” and Kim “reaffirmed his firm and unwavering commitment to complete denuclearization of the Korean Peninsula.” The Singapore document is shorter on details than previous nuclear agreements with North Korea and acts as a statement of principles in four areas Normalization: The two sides “commit to establish” new bilateral relations. Peace: The United States and DPRK agree to work to build “a lasting and stable peace regime.” Denuclearization: North Korea “commits to work toward complete denuclearization of the Korean Peninsula,” as was also promised in an April 2018 summit between Kim and South Korean leader Moon Jae-in. POW/MIA remains: The two sides will work to recover the remains of thousands of U.S. troops unaccounted for during the Korean War. Speaking at a press conference without Kim after the summit, Trump said U.S.-DPRK denuclearization negotiations would continue and resume at an early date; Kim pledged to destroy a “major missile engine testing site”; He will invite Kim to the White House; He raised human rights issues with Kim, though “relatively briefly compared to denuclearization.” Trump appeared to downplay the state of DPRK human rights by saying that human rights conditions are also “rough in a lot of places”; The United States would suspend annual U.S.-South Korea military exercises, which Trump called “war games” and “provocative,” during nuclear negotiations. He said the move, which was not accompanied by any apparent commensurate move by Pyongyang and reportedly surprised South Korea and U.S. military commanders, would save “a tremendous amount of money.” Trump also expressed a hope of eventually withdrawing the approximately 30,000 U.S. troops stationed in South Korea. Postsummit remarks by the Administration created confusion about whether all exercises or only some types will be suspended. Notable items not present in the statement or Trump’s remarks include details about a timeframe or verification protocols for denuclearization, and a commitment by Kim to dismantle the DPRK’s ballistic missile program. Outcomes The summit highlighted the change from 2017, when escalating tensions between North Korea and the United States led to increasingly tight U.S. and international sanctions and fears of a military conflict. In addition to the reduction of tensions, both sides can point to specific gains that have occurred since early 2018. U.S. gains include Kim Jong-un’s public statements committing to begin a process of negotiating complete denuclearization; North Korea’s moratorium on nuclear and missile testing while dialogue continues; North Korea’s apparent destruction in May of its Pyunggye-ri nuclear test site before international journalists; Kim’s statement that he would destroy a missile test site; and North Korea’s release of three U.S. detainees and agreement to restart the POW/MIA recovery program, which the United States suspended in 2005. DPRK gains include Breaking free from its diplomatic isolation. Following Trump’s March 2018 announcement that he would hold a summit, Kim has re-established friendly relations with China and Russia, and held two summits with South Korean President Moon; Boosting Kim’s legitimacy and prestige by using nuclear and missile advancements to obtain a meeting with the U.S. President as an equal; Loosening enforcement of sanctions against the DPRK economy; An expectation of future foreign investment and economic and energy assistance if it denuclearizes; A U.S. promise to provide “security guarantees”; and Trump’s announcement of a unilateral cessation of U.S.-South Korean military exercises and his statement that he hopes to withdraw all U.S. forces from South Korea. Questions The summit meeting raises numerous questions, including Did North Korea promise to abandon its nuclear weapons? What specific steps are needed to realize the DPRK’s commitment “to work toward complete denuclearization?” [emphasis added] Should a timeline be set? Will this be subject to international verification? Some Korea-watchers worry Kim will use a prolonged negotiation, dismantlement, and verification process as a delaying tactic while sanctions pressure eases. What does “denuclearization of the Korean Peninsula” mean? Does this mean the same thing to both countries? Does this phrasing have implications for the U.S. alliance with South Korea? How will talks about denuclearization, a possible peace declaration, and U.S.-DPRK normalization be sequenced and/or linked, if at all? Will the Trump Administration link these talks to inter-Korean talks, and vice versa? Will the United States be able to maintain a global pressure coalition while engaging with North Korea? Although Trump Administration officials have said international pressure against North Korea will continue until North Korea either denuclearizes or takes concrete and irreversible steps (as yet undefined) to denuclearize, the incentives for countries to maintain the intensity of the pressure campaign, and scrutiny of countries’ implementation of sanctions, arguably have diminished. What are the implications for U.S. alliances, especially with South Korea? Combined with his apparent lack of prior consultation with Seoul, Trump’s statements on U.S. troops in South Korea are likely to weaken U.S. allies’ confidence in the durability of U.S. security commitments and provide China and Russia with an argument against future U.S. exercises with allies. Should negotiations include North Korea’s other objectionable practices and programs, like the DPRK’s human rights record, cyberattacks, chemical and biological weapons, and sizeable conventional forces? What will Congress’s role be? Congress could play a direct role in several aspects of an evolving U.S.-DPRK relationship. In addition to approving funding to implement various U.S. commitments and new U.S. diplomatic offices in North Korea, Secretary of State Mike Pompeo has testified that a U.S.-DPRK nuclear agreement would be submitted to the Senate as a treaty. Congress could also support or oppose moves not to enforce or lift sanctions. Congress may also weigh in on moves that affect U.S. alliances with South Korea and Japan.

Jun 12, 2018

Capital Markets, Securities Offerings, and Related Policy Issues

U.S. capital markets are the largest and considered to be the most efficient in the world. Companies rely heavily on capital access to fund growth and create jobs. As the principal regulator of U.S. capital markets, the Securities and Exchange Commission (SEC) requires that offers and sales of securities either be registered with the SEC or be undertaken with an exemption from registration. Registered securities offerings, often called public offerings, are available to all types of investors and have more rigorous disclosure requirements. By contrast, securities offerings that are exempt from SEC registration are referred to as private offerings and are mainly available to more sophisticated investors. Some policymakers have concluded that changes in market trends require updated regulations governing capital access. Specifically, the number of publicly listed U.S. companies has declined by half over the last two decades, and small- to medium-sized companies are said to have more difficulty accessing capital relative to larger companies. Additionally, new capital access tools not previously part of the SEC regulatory regime, such as crowdfunding and initial coin offerings, have emerged. These new tools are especially helpful for small businesses and startups. The bipartisan Jumpstart Our Business Startups Act of 2012 (JOBS Act; P.L. 112-106) scaled regulation for smaller companies and reduced regulations in general for certain types of capital formation. It established a number of new options to expand capital access through both public and private offerings, including a new provision for crowdfunding. Following enactment of the JOBS Act, the public and private offering dichotomy has started to blur, and securities regulation has become increasingly tailored to suit companies of different sizes and with different needs. However, concerns over capital formation have persisted, given that the number of IPOs remained at far below long-term average levels post-JOBS Act and smaller businesses continue to face capital access pressure. To address these concerns, Congress has considered numerous legislative proposals to further expand the scaled approach, with some proposals building on existing JOBS Act provisions. The policy debate surrounding these proposals often focuses on expanding capital access and protecting investors, two of the SEC’s core missions. Expanding capital access promotes capital formation and “democratizes” capital markets by allowing for greater access of investment opportunities for more investors. Investor protection is considered to be important for healthy and efficient capital markets because many investors would be more willing to provide capital, and even at a lower cost, if they could expect enforceable contracts for their investments through a transparent process. At times, expanding capital access can come at the expense of investor protection. For example, proposals that reduce the registration and disclosures that a company must make can decrease the company’s compliance costs and increase the speed and efficiency of capital formation. But the reduced disclosures may expose a company’s investors to additional risks if they are not receiving information that is important to making informed investment decisions. This report analyzes legislative proposals that would generally affect the terms and amounts of capital provided to companies by investors. It analyzes a number of current legislative proposals and agency actions to expand both public and private securities offerings through amendments to program design, investor access, and disclosure requirements, among other provisions.

Jun 8, 2018

Potential Hydrofluorocarbon Phase Down: Issues for Congress

Jun 7, 2018

Legislative Branch: FY2019 Appropriations

The legislative branch appropriations bill provides funding for the Senate; House of Representatives; Joint Items; Capitol Police; Office of Compliance; Congressional Budget Office (CBO); Architect of the Capitol (AOC); Library of Congress (LOC), including the Congressional Research Service (CRS); Government Publishing Office (GPO); Government Accountability Office (GAO); Open World Leadership Center; and the John C. Stennis Center. The FY2019 legislative branch budget request of $4.960 billion was submitted on February 12, 2018. The budget request levels were developed prior to the enactment of full-year appropriations for FY2018. Agency assessments for FY2019 may subsequently have been revised—for example, to account for items funded or not funded in the FY2018 Consolidated Appropriations Act. Subsequent discussions may vary from the levels or language included in the budget request due to this timing. For purposes of this report, however, FY2019 requested levels refer to the requested levels originally submitted unless otherwise noted. By law, the President includes the legislative branch request in the annual budget submission without change. The House Appropriations Committee’s Legislative Branch Subcommittee held hearings in April to consider the FY2019 legislative branch requests. On May 8, 2018, the House Appropriations Committee held a markup of the bill. Three amendments were considered: one, a manager’s amendment, was adopted; one amendment was not adopted; and one amendment was withdrawn. The bill was ordered reported. The House-proposed total for legislative branch activities, excluding Senate items, is $3.811 billion (H.R. 5894, H.Rept. 115-696). The Senate Appropriations Committee’s Legislative Branch Subcommittee held hearings in April and May to consider FY2019 legislative branch requests. The FY2018 Consolidated Appropriations Act (P.L. 115-141) provided $4.700 billion, an increase of $260.0 million (+5.9%) from FY2017. The FY2017 level of $4.440 billion was an increase of $77.0 million (+1.7%) from FY2016. The FY2016 level of $4.363 billion represented an increase of $63 million (+1.5%) from the FY2015 level of $4.300 billion, and the FY2015 level represented an increase of $41.7 million (+1.0%) from the FY2014 funding level of $4.259 billion. The FY2013 act funded legislative branch accounts at the FY2012 enacted level, with some exceptions (also known as “anomalies”), less across-the-board rescissions that applied to all appropriations in the act, and not including sequestration reductions implemented on March 1. The FY2012 level of $4.307 billion represented a decrease of $236.9 million (-5.2%) from the FY2011 level, which itself represented a decrease of $125.1 million (-2.7%) from FY2010. The smallest of the appropriations bills, the legislative branch comprises approximately 0.4% of total discretionary budget authority.

Jun 4, 2018

Prioritizing Waterway Lock Projects: Barge Traffic Changes

Congress faces decisions about prioritizing new lock construction projects on the inland waterway system. As both houses debate differing versions of water resources and development bills (S. 2800, H.R. 8) and the FY2019 Energy and Water Development Appropriations bill (S. 2975, H.R. 5895), the decision about which of these projects could be undertaken first will likely be among the most controversial issues. The inland waterway system supports barge transportation of heavy raw materials such as grain, coal, petroleum, and construction aggregates. The new locks are needed, according to the Army Corps of Engineers (USACE) and barge shippers, where existing locks are in poor condition, requiring frequent closures for repairs, and/or because a lock’s size causes delays for barge tows. The total estimated cost for the 21 planned lock projects is several billion dollars (many of the individual projects have a cost estimate of between $300 million and $800 million). However, available funding for these projects is about $200 million per year. This is because of limited appropriations and cost-sharing capabilities. Under current cost-share arrangements, the barge industry pays half the cost of construction projects. It does this by paying a $0.29 per gallon fuel tax, which annually generates around $100 million. Significant changes in traffic levels through particular locks may affect the benefits that were estimated as expansion projects were advanced. The calculation of benefits is critical to advancing a project: the Office of Management and Budget (OMB) will not request funding for a project unless the estimated economic benefit is at least 2.5 times the expected cost. The lock projects are clustered in three regions, each facing different economic conditions that are affecting barge traffic in the agricultural heartland, record corn and soybean harvests have reversed the long-term downward trend of cargo volumes on the Upper Mississippi River; in the Ohio and Tennessee River Valleys, the domestic natural gas boom has reduced the demand for coal by barge to power plants by nearly half; along the Texas and Louisiana intracoastal waterway, tank barge traffic is still in a state of flux as the petrochemical industry makes longer-term investments related to the Texas shale oil boom. The U.S. Department of Agriculture (USDA) is expecting corn and soybean exports to increase slightly over the next decade, but this projection could be affected by possible Chinese tariff increases on U.S. agricultural goods, including soybeans. The closing of additional coal-fired electric power plants along the Ohio, Monongahela, and Tennessee Rivers would reduce waterway use, as the power plants generate 75% or more of the barge traffic through many of the locks on these rivers. The loss of coal traffic is significant for other commodities as well, as it could lead to more empty repositioning of barges, reducing economies of density for barge transport on the rivers. New pipeline construction and the lifting of the crude oil export ban at the end of 2015 are two factors that could influence barge demand over the long-term on the Gulf Intracoastal Waterway.

Jun 1, 2018

The Coastal Barrier Resources Act (CBRA)

May 31, 2018

Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently Asked Questions

The Trump Administration announced on April 2, 2018, its intent to revise through rulemaking the federal standards that regulate fuel economy and greenhouse gas (GHG) emissions from new passenger cars and light trucks. These standards include the Corporate Average Fuel Economy (CAFE) standards promulgated by the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) and the Light-Duty Vehicle GHG emissions standards promulgated by the U.S. Environmental Protection Agency (EPA). They are known collectively—along with California’s Advanced Clean Car program—as the National Program. NHTSA and EPA promulgated the second (current) phase of CAFE and GHG emissions standards affecting model year (MY) 2017-2025 light-duty vehicles on October 15, 2012. Like the initial phase of standards for MYs 2012-2016, the Phase 2 rulemaking was preceded by a multiparty agreement, brokered by the White House. The agreement included the State of California, 13 auto manufacturers, and the United Auto Workers union. The manufacturers agreed to reduce GHG emissions from most new passenger cars, sport utility vehicles, vans, and pickup trucks by about 50% by 2025, compared to 2010, with fleet-wide fuel economy rising to nearly 50 miles per gallon. As part of the Phase 2 rulemaking, EPA and NHTSA made a commitment to conduct a midterm evaluation for the latter half of the standards (i.e., MYs 2022-2025, for which EPA had finalized requirements and NHTSA, due to statutory limits, had proposed “augural” requirements). On November 30, 2016, the Obama Administration’s EPA released a proposed determination stating that the MY 2022-2025 standards remained appropriate and that a rulemaking to change them was not warranted. On January 12, 2017, EPA finalized the determination, stating “that the standards adopted in 2012 by the EPA remain feasible, practical and appropriate.” After President Trump took office, however, EPA and NHTSA announced their joint intention to reconsider the Obama Administration’s final determination and reopen the midterm evaluation process. EPA released a revised final determination on April 2, 2018. It stated the MY 2022-2025 standards were “not appropriate and, therefore, should be revised,” and that key assumptions in the January 2017 final determination—including gasoline prices, technology costs, and consumer acceptance—“were optimistic or have significantly changed.” With this revision, EPA and NHTSA announced that they would initiate a new rulemaking. Until that rulemaking is complete, the current standards would remain in force. In response to the announcements from the Trump Administration, California has restated its “continued support for the current National Program and California’s standards.” On March 24, 2017, the California Air Resources Board (CARB) passed a resolution to accept its staff’s midterm evaluation of the state’s Advanced Clean Car program—which includes MY 2017-2025 vehicle GHG standards in line with EPA’s 2017 final determination and the 2012 rulemaking. EPA granted CARB a Clean Air Act preemption waiver for its GHG standards on July 8, 2009. A number of issues remain forefront regarding the CAFE and GHG emission standards, their design, purpose, and potential revision. These include (1) whether EPA has adequately justified its decision to revise the MY 2022-2025 standards and (2) whether California can continue to implement state standards that would be more stringent than the revised federal ones. These issues are informed by analyses regarding (1) whether the standards are technically and economically feasible; (2) the impact of the standards on GHG emissions and energy conservation; and (3) whether the standards adequately address consumer choice, safety, and other vehicle policies, both domestic and international.

May 24, 2018

Is There Liability for Cross-Border Shooting?

May 22, 2018

India’s Domestic Political Setting

May 22, 2018

The Federal Budget: Overview and Issues for FY2019 and Beyond

The federal budget is a central component of the congressional “power of the purse.” Each fiscal year, Congress and the President engage in a number of activities that influence short- and long-run revenue and expenditure trends. This report offers context for the current budget debate and tracks legislative events related to the federal budget. After a decline in budget deficits over the past several years, the deficit is projected to increase significantly in FY2019. Enactment of the 2017 tax revision (P.L. 115-97) and the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123) are projected to decrease revenues and increase outlays relative to past years, thus increasing deficits. The Budget Control Act of 2011 (BCA; P.L. 112-25) implemented several measures intended to reduce deficits from FY2012 through FY2021, and deficits declined from FY2012 through FY2015. In its April 2018 forecast, the Congressional Budget Office (CBO) baseline projects that the FY2019 deficit will equal $981 billion (4.6% of GDP), its highest value since the economy was recovering from the Great Recession in FY2012. The 2017 tax revision and BCA will continue to affect budget outcomes in FY2019 and beyond. Congress may debate amending the BCA as it has in the past through the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240), Bipartisan Budget Act of 2013 (BBA 2013; P.L. 113-67), Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114-74), and BBA 2018. The annual appropriations process, the statutory debt limit, and further tax modifications may also draw congressional attention in FY2019. Additionally, Congress may choose to debate structural changes to the federal budget, including reforms to mandatory and discretionary spending programs proposed by the House Committee on Ways and Means and the Trump Administration. The Trump Administration released its FY2019 budget on February 12, 2018. Proposed policy changes in the budget include increases in discretionary defense spending and relatively large decreases in mandatory spending other than Social Security and Medicare and in nondefense discretionary programs. Following passage of full-year FY2018 appropriations, Congress has turned its attention to the FY2019 budget. The Budget Committees in the House and Senate each develop budget legislation as they receive information and testimony from a number of sources, including the Administration, the Congressional Budget Office, and congressional committees with jurisdiction over spending and revenues. Trends resulting from current federal fiscal policies are generally thought by economists to be unsustainable in the long term. Projections suggest that achieving a sustainable long-term trajectory for the federal budget would require deficit reduction. Reductions in deficits could be accomplished through revenue increases, spending reductions, or some combination of the two.

May 21, 2018

Indian Health Service (IHS) FY2019 Budget Request and Funding History: A Fact Sheet

The Indian Health Service (IHS) within the Department of Health and Human Services (HHS) is the lead federal agency charged with improving the health of American Indians and Alaska Natives. IHS provides health care for approximately 2.2 million eligible American Indians/Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas. IHS provides services to members of 573 federally recognized tribes. It provides services either directly or through facilities and programs operated by Indian tribes or tribal organizations through self-determination contracts and self-governance compacts authorized in the Indian Self-Determination and Education Assistance Act (ISDEAA). The IHS has three major sources of funding: (1) discretionary appropriations, (2) collections, and (3) mandatory appropriations. Unlike most agencies within HHS, which receive their appropriations through the Labor, Health and Human Services, and Education appropriations act, IHS receives its discretionary appropriations through the Interior/Environment appropriations act. IHS’s discretionary appropriations are divided into three accounts: (1) Indian Health Services, (2) Contract Support Costs, and (3) Indian Health Facilities. IHS collects payments for the health services it provides. IHS, unlike other federal agencies, has the authority to receive payments from other federal programs such as Medicaid, Medicare, and the Department of Veterans Affairs for the health services it provides to IHS beneficiaries who are also enrolled in those programs. IHS also receives payments from state programs (such as workers’ compensation) and from private insurance. In addition to these payments, IHS collects rent from facilities it owns. Since FY1998, IHS has received a mandatory appropriation each fiscal year to support the Special Diabetes Program for Indians. This funding source was most recently extended in the Bipartisan Budget Act of 2018 (P.L. 115-123), which provided mandatory appropriations for FY2018 and FY2019. The President’s budget requests that these funds be moved to discretionary appropriations in FY2019. This fact sheet focuses on the funding that IHS has received between FY2014 and FY2019 (proposed).

May 18, 2018

U.S. and Global Trade Agreements: Issues for Congress

Congress plays a prominent role in shaping, debating, and approving legislation to implement trade agreements, and over the past three decades, bilateral and regional trade agreements (RTAs, or free trade agreements (FTAs) in the U.S. context) have become a primary source of new international trade liberalization commitments. The United States has historically pursued FTAs to open markets for U.S. goods, services, and agriculture, and establish trade rules and disciplines to enhance overall domestic and global economic growth. They are actively debated and can be contentious due to concerns over the potential employment effects of greater import competition, among other reasons. RTAs are reciprocal preferential arrangements among two or more parties. Their content has evolved significantly, partly as a result of change in the international economy where new trade barriers have been erected and/or where RTAs may provide a testing ground for new trade rules for potential future multilateral agreement. The United States historically has aimed for comprehensive coverage in eliminating barriers to trade and addressing all sectors in its FTAs. In addition to the reduction and elimination of tariffs and more traditional nontariff trade barriers, U.S. FTAs also cover services trade, enhance intellectual property rights (IPR), provide investment protections, and include enforceable labor and environmental commitments. Some countries pursue more limited agreements—only half of RTAs worldwide cover services and they rarely include labor and environmental provisions. Congressional interest in U.S. and global RTAs stems from their potential economic and foreign policy implications, implementation issues, and Congress’ role in establishing U.S. trade policy (Article I, Section 8 of the Constitution grants Congress authority to regulate foreign commerce). In its 2015 grant of Trade Promotion Authority (TPA), Congress set specific negotiating objectives for U.S. trade agreements that must be advanced in order for Congress to provide expedited consideration to the implementing legislation needed to bring new agreements into force. TPA is scheduled to be in effect through July 2021, unless Congress, before July 1, 2018, enacts an extension disapproval resolution regarding the Administration’s recently submitted extension request. Since 1990, the number of RTAs in force globally has grown six-fold from fewer than 50 to nearly 300. All 164 members of the World Trade Organization (WTO) are now party to at least one RTA; as of 2014 each member had on average 11 RTA partners. The United States began negotiating FTAs in the 1980s, and as of 2018, is party to 14 such agreements involving 20 trading partners. The multilateral trading system, meanwhile, has not produced a broad set of new trade liberalization agreements (excluding more limited scope agreements, such as the Trade Facilitation Agreement) since the Uruguay Round, which also established the WTO in 1995. In the current environment of stalled multilateral negotiations, RTAs provide an alternative venue to pursue trade liberalization and establish new rules on emerging issues. RTAs are, however, inherently discriminatory given their limited membership (i.e., they provide preferential treatment to some countries and not others), leading to debate over their global economic effect and whether they serve to facilitate future multilateral agreements or lead to the creation of competing trade blocs. U.S. exporters benefit from the preferential aspects of FTAs when they gain better access to FTA partner markets than their foreign competitors, but may be similarly harmed when third parties negotiate agreements that do not include the United States. To date there are no RTAs in force between the world’s largest economies (China, Japan, European Union (EU), and the United States). This could change in the near future as these and other major U.S. trading partners are involved in several pending RTAs, including an ongoing negotiation between 16 Asian nations that involves both China and Japan, and two recently concluded but not yet ratified and implemented RTAs: the EU-Japan agreement (one of twelve pending EU RTAs) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In some ways, the United States has pulled back from its recent FTA policy. Under the Obama Administration, the United States pursued two major regional FTA negotiations, the Trans-Pacific Partnership (TPP) including Japan and 10 other Asia-Pacific nations, and the Transatlantic Trade and Investment Partnership (T-TIP) with the European Union. These FTAs would have nearly doubled the share of U.S. trade occurring with FTA partners. The Trump Administration, however, has criticized existing FTAs, withdrawn the United States from the concluded but not enacted TPP, placed the T-TIP negotiations on hold, and initiated renegotiation or modification of the largest U.S. FTAs with Canada, Mexico, and South Korea. The Administration has also stated its intent to negotiate future FTAs on a bilateral rather than multi-party basis. As other countries move forward with new RTA negotiations that cover a significant share of world trade, a number of issues arise that may be of interest to Congress, including how these agreements will affect U.S. economic and strategic interests, their impact on U.S. leadership in trade liberalization efforts and establishing new trade rules, and the appropriate U.S. response.

May 17, 2018

The Supreme Court Bets Against Commandeering: Murphy v. NCAA, Sports Gambling, and Federalism

May 16, 2018

Blockchain and International Trade

May 14, 2018

Federal Crop Insurance: Program Overview for the 115th Congress

Since its inception in 1938, the federal crop insurance program has evolved from an ancillary program with low participation to a central pillar of federal support for agriculture. From 2007 to 2016, the federal crop insurance title had the second-largest outlays in the farm bill after nutrition. The total net cost of the program for crop years 2007-2016 was about $72 billion, of which $43 billion (60%) was of direct benefit to producers, $28 billion (39%) went to private insurers, and $754 million (1%) went to the Risk Management Agency (RMA) within the U.S. Department of Agriculture (USDA). Historically, the agricultural insurance market has been underdeveloped compared to other insurance markets. Agricultural insurance can be challenging to price for several reasons, including lack of crop data, difficulty in calculating actuarially based rates, production and price variations, geographically correlated risks, moral hazard, and adverse selection (i.e., the tendency of higher-risk farmers being more likely to purchase insurance than lower-risk farmers). In 1938, on the heels of the Great Depression and the Dust Bowl, Congress created the federal crop insurance program as a potential alternative to supplemental disaster assistance payments. Initially polices were available for only a few principal crops in a limited number of counties. Few eligible acres were insured. The program underwent significant changes in 1980, when Congress authorized premium subsidies and brought private insurers into the program. Since 1980, federal crop insurance has operated through a shared public-private arrangement funded by taxpayers and producers. Three principal actors operate the program: Private insurance companies, known as Approved Insurance Providers (AIPs), which are the primary insurers selling and servicing the insurance policies; The Federal Crop Insurance Corporation (FCIC), which reinsures the policies and subsidizes the delivery expenses of AIPs; and RMA, which determines policy terms, sets premium rates, and regulates AIPs. The terms of the financial arrangement between FCIC and AIPs are set out in a mutually negotiated Standard Reinsurance Agreement (SRA). Each AIP signs an SRA with FCIC annually. In contrast to the program’s limited scope and low participation rate in its early years, by 2011 federal crop insurance was providing more than $100 billion of insurance protection (liability) for over 100 crops (excluding hay, livestock, nursery, pasture, rangeland, and forage) on about 238 million acres. Policy offerings and participation were smaller for the livestock sector—$1.3 billion in liability on less than 3% of total eligible livestock inventory. In 2015, total premium for crops (excluding livestock and other policies) was about $9.8 billion, of which FCIC paid about 62% and producers paid about 38%. From 2000 to 2016, four crops—corn, soybeans, wheat, and cotton—accounted for 75% of enrolled acreage. The program is permanently authorized and would continue to operate if Congress does not enact a new farm bill. However, past farm bills have made changes to the underlying authority. Given the program’s significant cost and share of USDA program outlays, it is a frequent target for budgetary savings. Multiple bills introduced in the 115th Congress would modify the main financial components of the program. As with any large program, especially those with private sector involvement, congressional oversight has a significant role in ensuring that the federal crop insurance program meets its intended policy goals and operates efficiently.

May 10, 2018

Overview of U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2018 Appropriations

May 9, 2018

High Court Strikes Down Provision of Crime of Violence Definition as Unconstitutionally Vague

May 7, 2018

Issues in International Corporate Taxation: The 2017 Revision (P.L. 115-97)

One of the major motivations for the 2017 tax revision (P.L. 115-97) was concern about the international tax system. Issues associated with these rules involved the allocation of investment between the United States and other countries, the loss of revenue due to the artificial shifting of profit out of the United States by multinational firms (both U.S. and foreign), the penalties for repatriating income earned by foreign subsidiaries that led to the accumulation of deferred earnings abroad, and inversions (U.S. firms shifting their headquarters to other countries for tax reasons). In addition to lowering the corporate tax rate from 35% to 21% and providing some other benefits for domestic investment (such as temporary expensing of equipment), the 2017 tax bill also substantially changed the international tax regime. The tax change moved the system from a nominal worldwide tax on all foreign-source income, with a credit against U.S. tax for foreign taxes due, to a nominal territorial system that does not tax foreign-source income. Nevertheless, both systems could be considered a hybrid of a worldwide and territorial system. Prior law reduced the tax on foreign-source income by allowing deferral (taxing income of foreign subsidiaries only if it was repatriated, or paid as a dividend to the U.S. parent) and cross-crediting of foreign taxes (so the credit for high taxes paid in one country could offset U.S. tax on income from a low-tax country). The new system exempts dividends, but also imposes a current worldwide tax on global intangible low-taxed income (GILTI), but at a lower rate. It also introduces a corresponding lower rate on intangible income derived from abroad from assets in the United States (foreign-derived intangible income, or FDII). The new law adds the base erosion and anti-abuse tax (BEAT) to existing anti-abuse measures aimed at artificial profit shifting. BEAT imposes a minimum tax on ordinary income plus certain payments to related foreign companies. Despite the lower corporate tax rate, it is not clear that capital will be shifted into the United States from abroad; although a lower rate reduces the tax rate on equity-financed investments, it decreases the subsidy to debt-financed investments. Whether the capital stock increases or decreases depends on the magnitude of the tax changes (which appear largely offsetting) and the international mobility of debt versus equity. It is also not clear whether the capital stock will be allocated more efficiently or in a way more optimal for U.S. welfare, although economic theory suggests that reducing the tax subsidy for debt is a clear improvement. Although a territorial tax may make profit shifting more attractive, overall, given other elements of the new system, it appears to make profit shifting less important. GILTI and FDII bring the tax treatment of income from intangibles in the United States and abroad closer together, and BEAT and stricter thin capitalization rules (rules limiting interest deductions) also limit profit shifting, including shifting through leveraging. The new system ends the penalties (except for portfolio investment in foreign firms) for repatriating earnings and thus eliminates the prior incentives to retain earnings abroad. A series of measures aimed at inversions appears to make inversions much less attractive. Some of the measures may violate international agreements such as the World Trade Organization (WTO), bilateral tax treaties, and Organization for Economic Cooperation and Development (OECD) minimum standards to prevent harmful tax practices. There have been a number of concerns about design features in the new regime, including the dividend deduction, GILTI, FDII, BEAT, and other features. A variety of options might be considered to address these issues.

May 1, 2018

Teen Pregnancy: Federal Prevention Programs

Congress has an interest in preventing pregnancy among teenagers because of the long-term consequences for the families of teen parents and society more generally. Since the 1980s, Congress has authorized—and the U.S. Department of Health and Human Services (HHS) has administered—programs with a focus on teen pregnancy prevention. This report intends to assist Congress with tracking developments in four teen pregnancy prevention programs that are currently funded. The report provides detailed information about each program and includes a table that can illustrate the ways in which the programs are both similar and different. The four current programs are the Teen Pregnancy Prevention (TPP) program, the Personal Responsibility Education Program (PREP), the Title V Sexual Risk Avoidance Education program, and the Sexual Risk Avoidance Education program. Despite their similar names and purposes, the latter two programs have different authorizing laws and funding mechanisms. Generally, the four programs serve vulnerable young people in schools, afterschool programs, community centers, and other settings. Grantees include states, nonprofits, and other entities. The TPP program was established and funded by the FY2010 omnibus appropriations law (P.L. 111-117). Subsequent appropriations laws have also provided discretionary funding. As required in appropriations law, the majority of TPP program grants (Tier 1) must use evidence-based education models that have been shown to be effective in reducing teen pregnancy and related risk behaviors. A smaller share of funds is available for research and demonstration grants (Tier 2) that implement innovative strategies to prevent teenage pregnancy. FY2018 funding for the TPP program is $101 million. HHS has taken steps to discontinue the current cohort of grants. PREP was established under Section 513 of the Social Security Act by the Patient Protection and Affordable Care Act (ACA, P.L. 111-148) in 2010. The program receives mandatory funding and is designed to educate adolescents on both abstinence and contraception for preventing pregnancy and sexually transmitted infections, and on selected adult preparation subjects. The PREP authorizing law requires most grantees to replicate evidence-based programs that are proven to change behavior related to teen pregnancy. FY2018 funding for the program is $75 million. The Title V Sexual Risk Avoidance Education program is authorized at Section 510 (Title V) of the Social Security Act. It was formerly known as the Title V Abstinence Education Grant program, which was authorized by the 1996 welfare reform law (P.L. 104-193). The Bipartisan Budget Act of 2018 (P.L. 115-123) renamed the program and made other changes. The program focuses on implementing sexual risk avoidance, meaning voluntarily refraining from sex before marriage. Grantees may set aside some of their funding to conduct rigorous and evidence-based research on sexual risk avoidance. FY2018 funding for the program is $75 million. The Sexual Risk Avoidance Education program (not to be confused with the Title V program of the same name) was established and funded by the FY2016 omnibus appropriations law (P.L. 114-113). Other appropriations laws have since provided discretionary funding. Grantees are to use funding for education on voluntarily refraining from non-marital sexual activity, and they are encouraged to implement evidence-based approaches that teach the benefits associated with resisting risk behaviors. FY2018 funding for the program is $25 million. Multiple HHS offices worked together to establish the Teen Pregnancy Prevention (TPP) Evidence Review process following enactment of the FY2010 omnibus appropriations law (P.L. 111-117). The review is intended to inform the teen pregnancy prevention field about which prevention models have been shown to be effective based on studies from the past 20 years. TPP Tier 1 grantees must use models identified in the review. HHS encourages grantees for the other teen pregnancy prevention programs to use models identified in the review as well.

Apr 30, 2018

Army Corps of Engineers: Water Resource Authorization and Project Delivery Processes

The U.S. Army Corps of Engineers (USACE) in the Department of Defense undertakes water resources development activities. Its projects primarily are to maintain navigable channels, reduce flood and storm damage, and restore aquatic ecosystems. Congress directs USACE through authorizations and appropriations legislation. This report summarizes congressional authorization legislation, the standard project delivery process, authorities for alternative water resource project delivery, and other USACE authorities. Authorization Legislation. Congress generally authorizes USACE water resource activities in authorization legislation prior to funding them through appropriations legislation. USACE’s ability to act on an authorization often is determined by funding. Congress typically authorizes numerous new USACE site-specific activities and provides policy direction in an omnibus USACE authorization bill, typically titled a Water Resources Development Act (WRDA). Most project-specific authorizations in WRDAs fall into three general categories: project studies, construction projects, and modifications to existing projects. A few provisions in WRDA bills have time-limited authorizations; therefore, some WRDA provisions may be reauthorizing expired or expiring authorities. In 2018, USACE identified a $96 billion backlog of authorized construction projects. As USACE starts only a few construction projects in a fiscal year (e.g., five in FY2018), numerous projects authorized for construction in previous WRDAs remain unfunded. From 1986 through 2000, Congress often enacted a WRDA on a roughly biennial schedule. The pattern shifted after 2000; no WRDA bills were enacted in the 107th, 108th, and 109th Congresses. Several factors contributed to the lack of WRDAs in these Congresses, including disagreements over whether to change how USACE plans and constructs projects and over the effect of additional project authorizations and policy changes on both spending and the backlog of USACE authorized construction projects. The 110th Congress enacted the Water Resources Development Act of 2007 (P.L. 110-114) in November 2007, overriding a presidential veto. The next omnibus USACE authorization bill, the Water Resources Reform and Development Act of 2014 (WRRDA 2014; P.L. 113-121), was enacted in June 2014. In WRRDA 2014, Congress developed and used new processes for identifying site-specific studies and projects for authorization to overcome concerns related to congressionally directed spending (known as earmarks). The 114th Congress enacted the Water Infrastructure Improvements for the Nation Act (WIIN; P.L. 114-322); Title I of the bill had the short title of Water Resources Development Act of 2016 (WRDA 2016). Standard and Alternative Project Delivery. The standard process for a USACE project requires two separate congressional authorizations—one for studying feasibility and a subsequent one for construction—as well as appropriations for both. Congressional authorization for project construction in recent years has been based on a favorable report by the Chief of Engineers (known as a Chief’s Report) and an accompanying feasibility study. For most activities, Congress requires a nonfederal sponsor to share some portion of study and construction costs. Cost-sharing requirements vary by type of project. For some project types (e.g., levees), nonfederal sponsors own the completed works after construction and are responsible for operation and maintenance. As nonfederal entities have become more involved in USACE projects and their funding, they have expressed frustration with the time it takes USACE to complete projects. WRRDA 2014 and WRDA 2016 expanded the opportunities for interested nonfederal entities, including private entities, to have greater roles in project development, construction, and financing. WRRDA 2014 also authorized, through the Water Infrastructure Finance and Innovation Act (WIFIA), a program to provide direct loans and loan guarantees for water projects, including those for navigation, flood risk reduction, and ecosystem restoration, among others. Although the portion of the WIFIA program administered by the U.S. Environmental Protection Agency is operational, the USACE WIFIA program, which was focused more on water resource projects, has not been funded. Other USACE Activities and Authorities. Although most USACE projects are developed under the standard project development process, exceptions exist. Congress has granted USACE general authorities to undertake some studies, small projects, technical assistance, and emergency actions (e.g., flood fighting, repair of damaged levees, and limited drought assistance). Additionally, under the National Response Framework, USACE may be tasked with performing activities in response to an emergency or disaster, such as emergency power restoration.

Apr 30, 2018