CRS Reports
Congressional Research Service reports providing nonpartisan analysis of major federal policy issues.
5,111 reports indexed · sourced from EveryCRSReport.com
Defense Primer: Cyberspace Operations
Dec 18, 2018
Defense Primer: Operations in the Information Environment
Dec 18, 2018
Defense Primer: The Berry and Kissell Amendments
Dec 18, 2018
U.S. Trade with Major Trading Partners
U.S. world trade has grown steadily over the past decade. In 2017, the United States exported $2.4 trillion in goods and services and imported $2.9 trillion. Since 2009, when trade flows declined sharply in the midst of the financial crisis, U.S. exports have grown—in nominal terms—48.5%, while U.S. imports have grown 47.6%. More broadly, since 1960, trade relative to gross domestic product (GDP) has risen markedly. U.S. exports as a percentage of GDP expanded from 5% in 1960 to over 12% of GDP in 2017, while U.S. imports expanded from 4% to over 15% of GDP. China was the top U.S. trading partner in 2017, with $711.7 billion in total goods and services trade, followed by Canada ($679.9 billion), Mexico ($622.1 billion), Japan ($286.1 billion), and Germany ($239.8 billion). China was the largest source of U.S. imports, while Canada was the largest destination for U.S. exports. However, considering the 28 member states of the European Union (EU) as a single trading partner, the EU is both the largest U.S. export destination ($528.2 billion) and the largest source of U.S. imports ($629.4 billion). The majority of U.S. global trade—approximately 65%—is with countries that do not have a free trade agreement (FTA) with the United States. The changing dynamics and composition of U.S. trade pose both opportunities and challenges for U.S. trade relations. These developments have intensified congressional interest in U.S. trade policy and heightened congressional demand for comparative analysis of U.S. bilateral trade flows. In the coming months, Congress may face matters such as shaping U.S. trade policy to reflect the changing composition of U.S. trade; enhancing the competitive position of U.S. industries, firms, and workers; promoting access to new foreign markets for U.S. businesses; and addressing new trade tensions, barriers, and other issues raised by the growing role of emerging economies in the global economy. In addition, questions affecting U.S. trade trends could arise as the Trump Administration renegotiates existing FTAs and pursues new ones, and Congress debates and potentially ratifies them. Congress may closely monitor negotiations on other trade agreements, as well as developments at the World Trade Organization. Key U.S Trade Developments with Major Trading Partners in 2017 Trade in Goods In 2017, the European Union (EU) was the United States’ top trading partner in terms of two-way (exports plus imports) merchandise trade. The value of U.S. merchandise trade with the EU increased 4.7% to $722.2 billion in 2017. The U.S. trade deficit with the EU rose 3.0%, from $148.1 billion in 2016 to $152.6 billion in 2017. China was the largest single-country U.S. trading partner based on two-way merchandise trade. U.S. two-way merchandise trade with China amounted to $636.7 billion in 2017, an increase of 9.9% from the level recorded in 2016. The U.S. merchandise trade deficit with China of $375.9 billion remained higher than the U.S. trade deficit registered with any other trading partner in 2017. Trade in Services The EU was the United States’ top trading partner in terms of two-way services trade in 2017, while the largest single-country trading partners were the United Kingdom, Canada, Japan, China, and Germany. The value of U.S. services trade with the EU increased 5.1%, from $414.4 billion in 2016 to $435.4 billion in 2017. The U.S. trade surplus with the EU declined 8.3%, from $56.1 billion in 2016 to $51.4 billion in 2017. In 2017, China was the United States’ fourth-largest single-country trading partner based on two-way services trade. U.S. two-way services trade with China amounted to $75.0 billion in 2017, an increase of 5.7% from the $71.0 billion recorded in 2016. The U.S. services surplus with China in 2017 amounted to $40.2 billion, increasing 3.4% over the previous year. U.S. Total Trade in Goods and Services The EU was the United States’ largest market for U.S. goods and services exports, accounting for $528.2 billion (22.5% of total U.S. exports), as well as the leading source of U.S. imports, which totaled $629.4 billion (21.7% of total U.S. imports). Canada was the second-largest U.S. export market, with $341.3 billion worth of U.S. exports (14.5% of total U.S. exports), and the fourth-largest source of U.S. imports, which totaled $338.5 billion (11.6% of total U.S. imports). China’s share of U.S. trade has increased dramatically over the past few decades. In 2000, it accounted for 2.0% of total U.S. exports and 7.1% of total U.S. imports. By 2017, China’s share had risen to 8.0% of total U.S. exports and 18.0% of U.S. imports.
Dec 18, 2018
Defense Primer: Regular Military Compensation
Dec 17, 2018
Defense Primer: Military Pay Raise
Dec 17, 2018
Defense Primer: Exceptional Family Member Program (EFMP)
Dec 17, 2018
Defense Primer: President’s Constitutional Authority with Regard to the Armed Forces
Dec 17, 2018
The International Monetary Fund
Dec 14, 2018
Cybersecurity: A Primer
Dec 14, 2018
2018 World Bank Capital Increase Proposal
Dec 14, 2018
Introduction to Bank Regulation: Credit Unions and Community Banks: A Comparison
Dec 14, 2018
Immigration
Dec 14, 2018
Defense Primer: Military Health System
Dec 13, 2018
Defense Primer: Future Years Defense Program (FYDP)
Dec 13, 2018
Defense Primer: Personnel Tempo (PERSTEMPO)
Dec 12, 2018
Defense Primer: Reserve Forces
Dec 12, 2018
Amazon HQ2 and Federal Opportunity Zone Tax Incentives
On November 13, 2018, Amazon announced that it would be splitting its second headquarters (HQ2) between Northern Virginia and Long Island City, NY. According to the company, each HQ2 site is expected to add 25,000 jobs over 12 years. Additionally, Amazon announced that it would build an “Operations Center of Excellence” that is expected to add more than 5,000 jobs in Nashville, TN. State and local governments offered Amazon a range of tax incentives, grants, and other benefits (e.g., a nearby state university “innovation campus”). Some of these incentives are performance-based and would depend on Amazon’s actual decisions to hire and invest its own money into the locations. Federal tax incentives might indirectly benefit investments near the new Amazon sites. In particular, a new set of Opportunity Zones (OZ) tax incentives could boost returns on investments made by Amazon or private investors in residential or commercial developments to support Amazon’s workforce and their families. OZs have generated much interest by state and local governments and private investors after being created by the 2017 tax revision (P.L. 115-97). Under part of the statute authorizing OZs, state governors had the discretion to nominate a limited number of census tracts within their states that were either (a) low-income, as defined in statute, or (b) having no more than 125% of the median family income of a contiguous low-income tract. Those designations were finalized in summer 2018. Investors who roll over capital gains from investments (e.g., stock sales, sales of shares in commercial or residential real estate) to purchase a financial interest in a Qualified Opportunity Fund (QOF) may benefit. QOFs are corporations or partnerships that hold at least 90% of their assets in “qualified OZ property” (tangible business property, stock, or partnership interest in another QOF). QOFs are self-certified entities and do not require advance certification for formation or to begin eligibility for OZ tax incentives. The three OZ tax incentives are all designed to reduce capital gains tax and become available at different increments over a 10-year period: Temporary deferral of capital gains that are reinvested in qualified OZ property. Taxpayers can immediately defer capital gains tax due upon sale or disposition of an asset (even if located outside of an OZ) if the capital gain portion of that asset is reinvested within 180 days in a QOF. Step-up in basis for investments held in QOFs. If the investment in the QOF is held by the taxpayer for at least five years, the basis on the original gain is increased by 10% of the original gain. If the OZ asset or investment is held by the taxpayer for at least seven years, the basis on the original gain is increased by an additional 5% of the original gain. Permanent exclusion of capital gains tax on qualified OZ investments held for at least 10 years. The basis of investments maintained (a) for at least 10 years and (b) until at least December 31, 2026, will be eligible to be marked up to the fair market value of such investment on the date the investment is sold. Effectively, this amounts to an exclusion of capital gains tax on any gains earned from the investment in the QOF (over 10 years) when the investment is sold or disposed. Under P.L. 115-97, OZ designations are in effect through 2026. To be eligible for OZ tax incentives, investments must be made before the end of 2026, and proposed Treasury regulations indicate that the permanent exclusion on gains from OZ investments would be available for qualified investors through 2047. For an illustrative calculation of OZ tax benefits, see CRS Report R45152, Tax Incentives for Opportunity Zones: In Brief, by Sean Lowry and Donald J. Marples. The Joint Committee on Taxation estimated that the OZ tax incentives will result in a revenue loss to the federal government of $1.6 billion over 10 years. This estimate within the budget window reflects the relatively small revenue losses associated with the deferral of capital gains tax and the OZ basis adjustments in years five and seven. Potentially the largest tax benefit, available in year 10, would fall outside of the 10-year budget window. Those revenue losses would not be expected until 2028. As shown in the figures, below, the planned site for the Amazon New York office is located within a designated OZ, but the Northern Virginia and Nashville sites are not. Even if the new sites are not directly located within a designated OZ, developers could look to nearby designated OZs for higher returns on investments for housing, retail, and commercial projects for use and enjoyment by Amazon’s workers and their families. Investors and QOFs face consideration of the statute providing rules for OZ tax incentives, proposed regulations, and various IRS guidance as they are released. Figure 1. Designated Opportunity Zones Near Proposed Amazon HQ2 Site in New York / Source: CRS using GIS data from Novogradac and Company, https://www.novoco.com/resource-centers/opportunity-zone-resource-center/guidance, the U.S. Census Bureau, and Esri Light Gray Base Map; letter from Howard A. Zemsky, President and CEO, New York State Urban Development Corporation, to Holly Sullivan, Head of WW Economic Development, Amazon Services, November 12, 2018, https://d39w7f4ix9f5s9.cloudfront.net/4d/db/a54a9d6c4312bb171598d0b2134c/new-york-agreement.pdf. Figure 2. Designated Opportunity Zones Near Amazon Proposed HQ2 Site in Northern Virginia Source: CRS using GIS data from Novogradac and Company, https://www.novoco.com/resource-centers/opportunity-zone-resource-center/guidance, the U.S. Census Bureau, Esri Light Gray Base Map; and Kaya Yurieff, “Amazon HQ2 Sites Have Been Decided. Now the Real Work Begins,” CNN, December 3, 2018, https://www.cnn.com/2018/12/03/tech/amazon-hq2-next-steps/index.html. Figure 3. Designated Opportunity Zones Near Proposed Amazon Site in Nashville / Sources: CRS using GIS data from Novogradac and Company, https://www.novoco.com/resource-centers/opportunity-zone-resource-center/guidance, the U.S. Census Bureau, and Esri Light Gray Base Map; and Office of Governor Bill Haslam, “Governor Haslam, Commissioner Rolfe Announce Amazon to Create 5,000 New Jobs in Nashville,” press release, November 13, 2018, https://www.tn.gov/governor/news/2018/11/13/amazon-to-create-5000-new-jobs-in-nashville.html.
Dec 12, 2018
Sharing the Colorado River and the Rio Grande: Cooperation and Conflict with Mexico
The United States and Mexico share the waters of the Colorado River and the Rio Grande. A bilateral water treaty from 1944 (the 1944 Water Treaty) and other binational agreements guide how the two governments share the flows of these rivers. The binational International Boundary and Water Commission (IBWC) administers these agreements. Since 1944, the IBWC has been the principal venue for addressing river-related disputes between the United States and Mexico. The 1944 Water Treaty authorizes the IBWC to develop rules and to issue proposed decisions, called minutes, regarding matters related to the treaty’s execution and interpretation. Water Delivery Requirements Established in Binational Agreements. The United States’ and Mexico’s water-delivery obligations derive from multiple treaty sources and vary depending on the body of water. Under the 1944 Water Treaty, the United States is required to provide Mexico with 1.5 million acre-feet (AF) of Colorado River water annually. The 1944 Water Treaty also addresses the nations’ respective rights to waters of the Rio Grande downstream of Fort Quitman, TX. It requires Mexico to deliver to the United States an annual minimum of 350,000 AF of water, measured in five-year cycles (i.e., 1.75 million AF over five years). For waters of the Rio Grande upstream of Fort Quitman, a 1906 bilateral convention requires the United States annually to deliver 60,000 AF of water to Mexico. Developments in the Colorado River Basin. The United States continues to meet its Colorado River annual delivery requirements to Mexico pursuant to the 1944 Water Treaty. At the forefront of recent IBWC actions on the Colorado River are efforts to cooperatively manage the Colorado River’s water and infrastructure to improve water availability during drought and to restore and protect riverine ecosystems. Minute 323 is a set of binational measures in the Colorado River basin that provides for binational cooperative basin water management, including environmental flows to restore riverine habitat. Minute 323 also provides for Mexico to share in cutbacks during shortage conditions in the U.S. portion of the basin. Additionally, Minute 323 designates a “Mexican Water Reserve” through which Mexico can delay its water deliveries from the United States and store its delayed deliveries upstream at Lake Mead, thereby increasing the lake’s elevation. Lake Mead elevation is the baseline used for determining shortage conditions and associated water delivery cutbacks for the lower Colorado River basin states of Arizona, California, and Nevada. Recent congressional attention to the Colorado River basin has related largely to oversight of Minute 323 implementation and water management during potential shortage conditions. Developments in the Rio Grande Basin. On multiple occasions since 1994, Mexico has not met its Rio Grande delivery obligations within the five-year cycle established by the 1944 Water Treaty. For example, Mexico fell 15% below its water-delivery obligations under the 1944 Water Treaty for the five-year cycle from 2010 to 2015. Mexico addressed its deficit by early 2016. The October 2015 to October 2020 cycle is under way. Mexico offset its below-target deliveries for the first year of this cycle with additional deliveries in the second year. IBWC indicates that Mexico delivered less than its 350,000 AF in the third year of the cycle; however, higher deliveries in the second year resulted in Mexico’s deliveries being almost at 98% of the three-year cumulative delivery target of 1.05 million AF. Some U.S. stakeholders promote the adoption of mechanisms to achieve a water-delivery regime by Mexico that provides more reliability and benefit for U.S. interests in Texas. The IBWC is developing a binational model for water management in the Rio Grande, as part of its broader effort to improve reliability in Mexico’s water deliveries. Congress has been involved in the recent Rio Grande water-sharing issues through oversight. Congress requires the U.S. Department of State to report annually on Mexico’s deliveries and on efforts to improve Mexico’s treaty compliance.
Dec 12, 2018
The Internal Revenue Service’s Private Tax Debt Collection Program
Dec 12, 2018
Defense Primer: Strategic Nuclear Forces
Dec 11, 2018
Authority to Launch Nuclear Forces
Dec 11, 2018
USDA Domestic Food Assistance Programs: FY2018 Appropriations
The Consolidated Appropriations Act, 2018 (P.L. 115-141) was enacted on March 23, 2018. This omnibus bill included appropriations for the U.S. Department of Agriculture (USDA), of which USDA’s domestic food assistance programs are a part. Prior to its enactment, the federal government had continued to operate for the first six months of the fiscal year under continuing resolutions (CRs). This report focuses on the enacted appropriations for USDA’s domestic food assistance programs and, in some instances, policy changes provided by the omnibus law. CRS Report R45128, Agriculture and Related Agencies: FY2018 Appropriations provides an overview of the entire FY2018 Agriculture and Related Agencies portion of the law as well as a review of the reported bills and CRs preceding it. Domestic food assistance funding is primarily mandatory but also includes discretionary funding. Most of the programs’ funding is for open-ended, appropriated mandatory spending—that is, terms of the authorizing law require full funding and funding may vary with program participation (and in some cases inflation). The largest mandatory programs include the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) and the child nutrition programs (including the National School Lunch Program and School Breakfast Program). Though their funding levels are dictated by the authorizing law, in most cases, appropriations are needed to make funds available for obligation and expenditure. The three largest discretionary budget items are the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); the Commodity Supplemental Food Program (CSFP); and federal nutrition program administration. The domestic food assistance funding is, for the most part, administered by USDA’s Food and Nutrition Service (FNS). The enacted FY2018 appropriation provides nearly $105 billion for domestic food assistance (Table 1). This is a decrease of approximately $3.2 billion from FY2017. Declining participation in SNAP is responsible for most of the difference. Over 95% of the FY2018 appropriations for domestic food assistance are for mandatory spending. Highlights of the associated appropriations accounts are summarized below. For SNAP and other programs authorized by the Food and Nutrition Act, such as The Emergency Food Assistance Program (TEFAP) commodities, the FY2018 appropriations law provides approximately $74.0 billion. Certain provisions of the law affect SNAP policies. For example, it continues a policy in the FY2017 appropriations law that limited USDA’s implementation of December 2016 regulations regarding SNAP retailers’ inventory requirements. USDA must amend its final rule to define “variety” more expansively and must “apply the requirements regarding acceptable varieties and breadth of stock.” For the child nutrition programs (National School Lunch Program and others), the enacted law provides approximately $24.3 billion. This includes discretionary funding for school meals equipment grants ($30 million) and Summer Electronic Benefit Transfer (EBT) demonstration projects ($28 million). General provisions provide an additional $5 million for farm-to-school grants and $2 million for training school nutrition personnel. The law includes policy provisions related to processed poultry from China, discrimination in the school meals programs, and requirements for schools’ paid lunch pricing. For the WIC program, the law provides nearly $6.2 billion while also rescinding $800 million in prior-year carryover funding. For the Commodity Assistance Program account, which includes funding for the Commodity Supplemental Food Program, TEFAP administrative and distribution costs, and other programs, the law provides over $322 million. It provides level funding for the WIC Farmers’ Market Nutrition Program ($18.5 million), though the President’s budget requested no funding for this program. For Nutrition Programs Administration, the law provides nearly $154 million.
Dec 11, 2018
District Court Temporarily Blocks Implementation of Asylum Restrictions on Unlawful Entrants at the Southern Border
Dec 11, 2018
Lifting the Earmark Moratorium: Frequently Asked Questions
While the term earmark has been used historically to describe various types of congressional spending actions, since the 110th Congress (2007-2008) House and Senate rules have defined an earmark as any congressionally directed spending, tax benefit, or tariff benefit that would benefit an entity or a specific state, locality, or congressional district. In the 112th Congress (2011-2012), the House and Senate began observing what has been referred to as an earmark moratorium or earmark ban. The moratorium does not exist in House or Senate chamber rules, however, and therefore is not enforced by points of order. Instead, the moratorium has been established by party rules and committee protocols and is enforced by chamber and committee leadership through their agenda-setting power. In recent years, some Members have expressed interest in lifting the earmark moratorium. Whether or not the earmark moratorium is lifted, the House and Senate continue to have formal earmark disclosure rules that were implemented in the 110th Congress with the stated intention of bringing more transparency to earmarking. These rules generally prohibit consideration of certain legislation unless information is provided about any earmarks included in the legislation. House and Senate rules require that any Member submitting an earmark request provide a written statement that includes the name of the Member, the name and address of the earmark recipient, and a certification that the Member has no financial interest in the earmark. House and Senate rules require that committees determine whether a provision constitutes an earmark, and committees must compile and make accessible certain earmark-related information. If Congress were to lift the current earmark ban, it might also choose to institute any number of policies or restrictions to govern the use of congressional earmarks. These policies or restrictions might be instituted through formal amendments to the House and Senate standing rules, by standing order, or by enacting new law. Such policies might also be instituted through party rules or leadership and committee practices and protocols. Some policies might seek to add more transparency to the earmarking process or prohibit certain types of entities from receiving earmarks. Restrictions might be implemented related to the purposes for which an earmark could be used or limiting the amount of federal dollars that might be spent on earmarks. Other policy approaches might potentially involve the executive branch or the congressional support agencies.
Dec 10, 2018
The Opioid Epidemic and the U.S. Labor Market
Dec 10, 2018
Cryptocurrency: The Economics of Money and Selected Policy Issues
Cryptocurrencies are digital money in electronic payment systems that generally do not require government backing or the involvement of an intermediary, such as a bank. Instead, users of the system validate payments using certain protocols. Since the 2008 invention of the first cryptocurrency, Bitcoin, cryptocurrencies have proliferated. In recent years, they experienced a rapid increase and subsequent decrease in value. One estimate found that, as of August 2018, there were nearly 1,900 different cryptocurrencies worth about $220 billion. Given this rapid growth and volatility, cryptocurrencies have drawn the attention of the public and policymakers. A particularly notable feature of cryptocurrencies is their potential to act as an alternative form of money. Historically, money has either had intrinsic value or derived value from government decree. Using money electronically generally has involved using the private ledgers and systems of at least one trusted intermediary. Cryptocurrencies, by contrast, generally employ user agreement, a network of users, and cryptographic protocols to achieve valid transfers of value. Cryptocurrency users typically use a pseudonymous address to identify each other and a passcode or private key to make changes to a public ledger in order to transfer value between accounts. Other computers in the network validate these transfers. Through this use of blockchain technology, cryptocurrency systems protect their public ledgers of accounts against manipulation, so that users can only send cryptocurrency to which they have access, thus allowing users to make valid transfers without a centralized, trusted intermediary. Money serves three interrelated economic functions: it is a medium of exchange, a unit of account, and a store of value. How well cryptocurrencies can serve those functions relative to existing money and payment systems likely will play a large part in determining cryptocurrencies’ future value and importance. Proponents of the technology argue cryptocurrency can effectively serve those functions and will be widely adopted. They contend that a decentralized system using cryptocurrencies ultimately will be more efficient and secure than existing monetary and payment systems. Skeptics doubt that cryptocurrencies can effectively act as money and achieve widespread use. They note various obstacles to extensive adoption of cryptocurrencies, including economic (e.g., existing trust in traditional systems and volatile cryptocurrency value), technological (e.g., scalability), and usability obstacles (e.g., access to equipment necessary to participate). In addition, skeptics assert that cryptocurrencies are currently overvalued and under-regulated. The invention and proliferation of cryptocurrencies present numerous risks and related policy issues. Cryptocurrencies, because they are pseudonymous and decentralized, could facilitate money laundering and other crimes, raising the issue of whether existing regulations appropriately guard against this possibility. Many consumers may lack familiarity with cryptocurrencies and how they work and derive value. In addition, although cryptocurrency ledgers appear safe from manipulation, individuals and exchanges have been hacked or targeted in scams involving cryptocurrencies. Accordingly, critics of cryptocurrencies have raised concerns that existing laws and regulations do not adequately protect consumers dealing in cryptocurrencies. At the same time, proponents of cryptocurrencies warn against over-regulating what they argue is a technology that will yield large benefits. Finally, if cryptocurrency becomes a widely used form of money, it could affect the ability of the Federal Reserve and other central banks to implement and transmit monetary policy, leading some observers to argue that central banks should develop their own digital currencies (as opposed to a cryptocurrency); others oppose this idea. The 115th Congress has shown significant interest in these and other issues relating to cryptocurrencies. For example, the House passed several bills (H.R. 2433, H.R. 5036, and H.R. 6069, and H.R. 6411) aimed at better understanding or regulating cryptocurrencies. The 116th Congress—and beyond—may continue to consider the numerous policy issues raised by the increasing use of cryptocurrencies.
Dec 7, 2018
Budget Issues Shaping the 2018 Farm Bill
The farm bill is an omnibus, multi-year law that governs an array of agricultural and food programs. It provides an opportunity for policymakers to periodically address a broad range of agricultural and food issues. The farm bill has typically undergone reauthorization about every five years. The 115th Congress has considered a new farm bill but has not enacted one to date. Both the House and the Senate passed versions of a 2018 farm bill (H.R. 2) in June 2018. Conference proceedings officially began in September 2018 but have not reached agreement. The farm bill provides an opportunity for Congress to choose how much support, if any, to provide for various agriculture and nutrition programs and how to allocate it among competing constituencies. Under congressional budgeting rules, many programs are assumed to continue beyond the end of a farm bill. From a budgetary perspective, this provides funding to reauthorize programs, reallocate funding to other programs, or be taken for deficit reduction. Budget for a 2018 Farm Bill (dollars in millions, FY2019-FY2028) CBO score Farm bill titles CBO baseline House-passed Senate-passed Commodities 61,151 +284 -408 Conservation 59,754 -795 +0 Trade 3,624 +470 +515 Nutrition 663,828 -1,426 +94 Credit -4,558 +0 +0 Rural Development 168 +0 -2,340 Research 604 +250 +685 Forestry 10 +0 +5 Energy 612 -517 +375 Horticulture 1,547 +10 +626 Crop Insurance 78,037 -161 -2 Miscellaneous 2,423 +566 +517 Subtotal 867,200 -1,320 +68 Increase in Revenue - +465 +68 Total 867,200 -1,785 0 Source: CRS, compiled using the CBO Baseline by Title (unpublished; April 2018), based on the CBO baseline (April 2018), and the CBO cost estimates for H.R. 2 as passed by the House and as passed by the Senate (July 24, 2018). The farm bill authorizes programs in two spending categories: mandatory spending and discretionary spending. The Congressional Budget Office (CBO) baseline is a projection at a particular point in time of future federal spending on mandatory programs under current law. When a new bill is proposed that would affect mandatory spending, the cost impact (score) is measured in relation to the baseline. Changes that increase spending relative to the baseline have a positive score; those that decrease spending relative to the baseline have a negative score. Federal budget rules such as “PayGo” may require budgetary offsets to balance new spending so that there is no increase in the federal deficit. Discretionary spending may be authorized in a farm bill but is not actually provided until budget decisions are made in a future annual appropriations act. Since 2000, farm bill budgets have varied: The 2002 farm bill increased overall spending, the 2008 farm bill was essentially budget neutral, the 2014 farm bill reduced spending, and the 2018 farm bill is projected to be essentially budget neutral. The April 2018 CBO baseline for farm bill programs, used as the official benchmark in 2018, contains $867 billion over FY2019-FY2028—77% of which stems from the nutrition title ($664 billion) and its largest program, the Supplemental Nutrition Assistance Program. The remaining $203 billion baseline is for agricultural programs, mostly in crop insurance, farm commodity programs, and conservation. Other titles of the farm bill contribute about 1% of the baseline, some of which are funded primarily with discretionary spending. The budgetary impact of the 2018 farm bill proposals are measured relative to the CBO baseline—that is, what the 2014 farm bill (current law) would have spent had it continued. Relative to the baseline, the House-passed bill would reduce federal outlays by $1.8 billion over 10 years (-0.2%), and the Senate-passed bill would remain budget neutral (+0%) over the same 10-year period. These overall relatively small scores are the net result of sometimes relatively larger increases and reductions across individual titles. Some of the overall scores within a single title of the farm bill are the net result of sometimes large changes in individual programs that may reflect changes in the direction of policy. The House bill would achieve its overall 10-year net reduction primarily by reducing net outlays in four titles (Nutrition, Conservation, Energy, and Crop Insurance). It would increase spending by less than the total of these reductions across five other titles (Miscellaneous, Trade, Commodities, Research, and Horticulture). The Nutrition title has provisions that sum to a $22 billion reduction over 10 years (including those for work requirements) and provisions that would add to $20.6 billion in increased spending. Similarly, the Conservation title has provisions that sum to a $12.6 billion reduction (including repealing the Conservation Stewardship Program), as well as provisions that add spending totaling $11.8 billion. The Senate bill would achieve a budget-neutral outcome by reducing net spending primarily in the Rural Development title but also in the Commodities and Crop Insurance titles. It would increase spending across seven titles (Research, Horticulture, Miscellaneous, Trade, Energy, Nutrition, and Forestry). For some of the programs without baseline, both the House-passed and the Senate-passed bills would provide continuing funding and, in some cases, permanent baseline.
Dec 6, 2018
Defense Primer: Special Operations Forces
Dec 6, 2018
U.S. International Food Assistance: An Overview
The United States has played a leading role in global efforts to alleviate hunger and improve food security. U.S. international food assistance programs provide support through two distinct methods: (1) in-kind aid, which ships U.S. commodities to regions in need, and (2) cash-based assistance, which provides recipients with vouchers, direct cash transfers, or locally procured foods. The current suite of international food assistance programs began with the Food for Peace Act (P.L. 83-480), commonly referred to as “P.L. 480,” which established the Food for Peace program (FFP). Congress authorizes most food assistance programs in periodic farm bills. However, Congress authorized the Emergency Food Security Program (EFSP)—a newer, cash-based food assistance program—in the Global Food Security Act of 2016 (P.L. 114-195). Congress funds international food assistance programs through annual agriculture appropriations and state and foreign operations (SFOPS) appropriations bills. Since 2007, annual international food assistance outlays averaged $2.6 billion. In FY2016, FFP Title II and EFSP accounted for 87% of total international food assistance outlays. The U.S. Agency for International Development (USAID) and the U.S. Department of Agriculture (USDA) administer U.S. international food assistance programs. Historically, the United States provided international food assistance exclusively through in-kind aid. Since the mid-1980s, FFP Title II, which provides in-kind donations, has been the dominant U.S. food aid program. (The name “FFP Title II” refers to Title II of the Food for Peace Act, in which Congress first authorized the program.) In the late 2000s, U.S. international food assistance began to shift toward a combination of in-kind and cash-based assistance. This is largely due to the Obama Administration creating the cash-based EFSP in 2010 to complement FFP Title II emergency aid. EFSP is used in conditions when in-kind aid cannot arrive soon enough or could potentially disrupt local markets or when it is unsafe to operate in conflict zones. Despite the growth in cash-based assistance, U.S. international food assistance still relies predominantly on in-kind aid. Many other countries with international food assistance programs have converted primarily to cash-based assistance. U.S. reliance on in-kind aid has become controversial due to its potential to disrupt local markets and cost more than procuring food locally. At the same time, lack of reliable suppliers and poor infrastructure in recipient countries may limit the efficacy and efficiency of cash-based assistance. Also, in poorly controlled settings, cash transfers or food vouchers could be stolen or used by recipients to purchase nonfood items. Agricultural cargo preference (ACP)—the requirement that 50% of all in-kind aid be shipped on U.S.-flag ships—has also become controversial due to findings that it can lead to higher transportation costs and longer delivery times. Higher costs may be partially due to higher wages and better working conditions on U.S.-flag vessels compared to foreign-flag vessels. ACP may also contribute to maintaining a U.S.-flag merchant marine to provide sealift capacity during wartime or national emergencies. The Trump Administration and certain Members of Congress have proposed changes to the structure and intent of international food assistance programs. Some Members of Congress proposed changes in the House and Senate 2018 farm bills (H.R. 2). These proposed changes include amending requirements for some international food assistance programs and expanding flexibility to use cash-based assistance. Other proposed legislation would address ACP, expand flexibility to use cash-based assistance, and consolidate and alter funding for most international food assistance programs.
Dec 6, 2018
The Pregnancy Assistance Fund: An Overview
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) established the Pregnancy Assistance Fund (PAF) to assist vulnerable individuals and their families during the transition to parenthood. Specifically, the program serves expectant and parenting teens, women, fathers, and their families. This includes women of any age who are survivors of domestic violence, sexual violence, sexual assault, and stalking. The PAF program focuses on meeting the educational, social service, and health needs of eligible individuals and their children during pregnancy and the postnatal period. The research literature indicates that pregnancy has high costs for individuals eligible for the PAF program. Teenage mothers and fathers tend to have less education and are more likely to live in poverty than their peers who are not parenting. Nearly one-third of adolescent females who have dropped out of high school cite pregnancy or parenthood as a reason. Parenthood can also influence whether students pursue postsecondary education. One analysis found that single young women who had children after enrolling in community college were 65% more likely to drop out than their same-age peers who did not have children after enrolling. The research literature further indicates that approximately 3% to 9% of women experience domestic violence during pregnancy. Some studies indicate that this risk is greater among low-income women. The PAF program is administered by the Office of Adolescent Health (OAH) in the Department of Health and Human Services’ (HHS’) Office of the Assistant Secretary for Health (OASH). HHS distributes PAF funding on a competitive basis to the states, the District of Columbia, U.S. territories, and tribal entities. Through FY2018, HHS has awarded PAF funding to 30 states, the District of Columbia, and 5 tribal entities (“grantees”). These grantees can decide how to use funding under four purpose areas. Three of the purpose areas focus on providing services to the eligible expectant and parenting population through subgrants and partnerships. The fourth category focuses on public awareness about such services; however, HHS advises that grantees may not use funding solely for public awareness activities. In general, grantees have provided subgrants to school districts, community service organizations, and institutions of higher education (IHE) that directly serve the expectant and parenting population. Subgrantees have most frequently provided case management, referral services for other supports, group workshops on specific topics (e.g., pregnancy prevention), and home visiting services. The PAF statute and the program grant announcements include requirements for state grantees and subgrantees in carrying out activities under the program. The authorizing law requires each subgrantee to provide an annual report to the grantee about expenditures, fulfilling program requirements, and how it meets the needs of participants. Grantees must prepare an annual report to HHS on information provided by subgrantees, including participant data. In FY2016, grantees (17 states and 3 tribal entities) reported serving 16,053 individuals. Of these participants, 55% were expectant or parenting mothers, 37% were children, and 8% were expectant or parenting fathers. Most expectant or parenting participants were ages 16 through 19, and nearly half of all participants were white, about one-third were black, and the remaining share were another race or multiracial. About half of all participants were Hispanic. The ACA provides mandatory PAF funding of $25 million annually from FY2010 through FY2019. If Congress considers reauthorizing the program, it may look to emerging findings from a recent evaluation that may indicate the program is helping to keep pregnant and parenting students in the District of Columbia connected to their high schools. Among other topics, Congress may consider whether to establish guidelines regarding how the PAF program should interact with other, similar federal programs in the areas of education, health, and social services.
Dec 6, 2018
“Waters of the United States” (WOTUS): Current Status of the 2015 Clean Water Rule
The Clean Water Act (CWA) is the principal federal law governing pollution of the nation’s surface waters. The statute protects “navigable waters,” which it defines as “the waters of the United States, including the territorial seas.” The scope of the term waters of the United States, or WOTUS, is not defined in the CWA. Thus, the Army Corps of Engineers and U.S. Environmental Protection Agency (EPA) have defined the term in regulations several times as part of their implementation of the act. Two Supreme Court rulings (Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers and Rapanos v. United States), issued in 2001 and 2006 (respectively), interpreted the scope of the CWA more narrowly than EPA and the Corps had done previously in regulations and guidance. However, the rulings also created uncertainty about the intended scope of waters that are protected by the CWA. In 2014, the Corps and EPA proposed revisions to the existing 1980s regulations in light of these rulings. After reviewing over 1 million public comments and holding over 400 meetings with diverse stakeholders, the Corps and EPA issued a final rule in June 2015. The final rule—the Clean Water Rule—focused on clarifying the regulatory status of waters with ambiguous jurisdictional status following the Supreme Court rulings, including isolated waters and streams that flow only part of the year and nearby wetlands. Since the Clean Water Rule was finalized in 2015, its implementation has been influenced both by the courts and administrative actions. Following issuance of the 2015 Clean Water Rule, industry groups, more than half the states, and several environmental groups filed lawsuits challenging the rule in multiple federal district and appeals courts. A federal appeals court ordered a nationwide stay of the 2015 Clean Water Rule in October 2015 and later ruled that it had jurisdiction to hear consolidated challenges to the rule. In January 2018, the Supreme Court unanimously held that federal district courts, rather than appellate courts, are the proper forum for filing challenges to the 2015 Clean Water Rule. As a result, the appeals court vacated its nationwide stay. Three district courts have issued preliminary injunctions on the 2015 Clean Water Rule effective in the states challenging the rule in those courts. Accordingly, the 2015 Clean Water Rule is currently enjoined in 28 states and in effect in 22 states. In states where the 2015 Clean Water Rule is enjoined, regulations promulgated by the Corps and EPA in 1986 and 1988, respectively, are in effect. The Trump Administration has taken actions to delay implementation of the 2015 Clean Water Rule and rescind and replace it: In February 2018, the Corps and EPA published a rule that added an “applicability date” to the 2015 Clean Water Rule delaying implementation until February 2020. However, environmental groups and states filed lawsuits challenging the 2018 Applicability Date Rule, and in August 2018, a district court issued a nationwide injunction. The Trump Administration has also taken steps to rescind and replace the 2015 Clean Water Rule. In February 2017, President Trump issued Executive Order 13778 directing the Corps and EPA to review and rescind or revise the rule and to consider interpreting the term navigable waters in a manner consistent with Justice Scalia’s opinion in Rapanos, which proposed a narrower test for determining WOTUS. In July 2017, the Corps and EPA published a proposed rule that would “initiate the first step in a comprehensive, two-step process intended to review and revise the definition of waters of the United States’ consistent with the Executive Order.” The proposed step-one rule would rescind the 2015 Clean Water Rule and re-codify the regulatory definition of WOTUS as it existed prior to the rule. In July 2018, the agencies published a supplemental notice of proposed rulemaking to solicit comment on additional considerations supporting the agencies’ proposed repeal. A final step-one rule has not been issued. According to a statement reportedly made by the acting EPA Administrator on October 2, 2018, the agency planned to release a proposal for the step-two replacement rule sometime “over the next 30 days or so.” In the 115th Congress, some Members have introduced free-standing legislation and provisions within appropriations bills that would either repeal the 2015 Clean Water Rule, allow the Corps and EPA to withdraw the rule without regard to the Administrative Procedures Act, or amend the definition of navigable waters in the CWA. Two bills—H.R. 2 and H.R. 6147—have each passed the House and Senate in different forms. The House-passed versions of both bills would repeal the 2015 Clean Water Rule, while the Senate-passed versions of both bills do not include such provisions.
Dec 6, 2018
State and Local Governments Pursue Judicial Solutions to the Opioid Epidemic
Dec 6, 2018
Congressional Oversight of Intelligence: Background and Selected Options for Further Reform
Prior to the establishment of the Senate Select Committee on Intelligence (SSCI) and the House Permanent Select Committee on Intelligence (HPSCI) in 1976 and 1977, respectively, Congress did not take much interest in conducting oversight of the Intelligence Community (IC). The Subcommittees on the Central Intelligence Agency (CIA) of the congressional Armed Services Committees had nominal oversight responsibility, though Congress generally trusted that IC could more or less regulate itself, conduct activities that complied with the law, were ethical, and shared a common understanding of national security priorities. Media reports in the 1970s of the CIA’s domestic surveillance of Americans opposed to the war in Vietnam, in addition to the agency’s activities relating to national elections in Chile, prompted Congress to change its approach. In 1975, Congress established two select committees to investigate intelligence activities, chaired by Senator Frank Church in the Senate (the “Church Committee”), and Representative Otis Pike in the House (the “Pike Committee”). Following their creation, the Church and Pike committees’ hearings revealed the possible extent of the abuse of authority by the IC and the potential need for permanent committee oversight focused solely on the IC and intelligence activities. SSCI and HPSCI oversight contributed substantially to Congress’s work to legislate improvements to intelligence organization, programs, and processes and it enabled a more structured, routine relationship with intelligence agencies. On occasion this has resulted in Congress advocating on behalf of intelligence reform legislation that many agree has generally improved IC organization and performance. At other times, congressional oversight has been perceived as less helpful, delving into the details of programs and activities. Other congressional committees have cooperated with the HPSCI and SSCI in their oversight role since their establishment. Intelligence programs are often closely tied to foreign and defense policy, military operations, homeland security, cybersecurity, and law enforcement. Committees in both chambers for Foreign Affairs/Relations, Armed Services, Appropriations, Judiciary, and Homeland Security, therefore, share jurisdiction over intelligence. Some have suggested the current overlapping jurisdictions for oversight of the IC in Congress contribute to the perception of weak congressional intelligence committees that have relatively little authority and insufficient expertise. Others cite the overlapping responsibilities as a strength. Oversight of the IC spread over more committees can contribute to greater awareness and transparency in Congress of classified intelligence activities that are largely hidden from public view. They also claim that since the terrorist attacks of September 11, 2001, Senate, and House rules have changed to enable the congressional intelligence committees to have more authority and be more effective in carrying out their oversight responsibilities. Further reform, they argue, may be unrealistic from a political standpoint. An oft-cited observation of the Commission on Terrorist Attacks upon the United States (i.e., the 9-11 Commission) that congressional oversight of intelligence is “dysfunctional” continues to overshadow discussion of whether Congress has done enough. Does congressional oversight enable the IC to be more effective, better funded and organized, or does it burden agencies by the sheer volume of detailed inquiries into intelligence programs and related activities? A central question for Congress is: Could additional changes to the rules governing congressional oversight of intelligence enable Congress to more effectively fund programs, influence policy, and legislate improvements in intelligence standards, organization and process that would make the country safer?
Dec 4, 2018
Public Health and Other Related Provisions in P.L 115-271, the SUPPORT for Patients and Communities Act
On October 24, 2018, President Donald J. Trump signed into law H.R. 6, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (P.L. 115-271; the SUPPORT for Patients and Communities Act, or the SUPPORT Act). The SUPPORT Act is a sweeping measure designed to address widespread overprescribing and abuse of opioids in the United States. The act includes provisions involving law enforcement, public health, and health care financing and coverage. Broadly, the legislation imposes tighter oversight of opioid production and distribution; imposes additional reporting and safeguards to address fraud; and limits coverage of prescription opioids, while expanding coverage of and access to opioid addiction treatment services. The law also authorizes a number of programs that seek to expand consumer education on opioid use and train additional providers to treat individuals with opioid use disorders. The SUPPORT Act builds on recent efforts by the federal government to address the opioid epidemic, including the Comprehensive Addiction and Recovery Act of 2016 (CARA; P.L. 114-198) and the 21st Century Cures Act (Cures Act; P.L. 114-255). CARA addressed substance use issues broadly, targeting the opioid crisis predominantly through public health and law enforcement strategies. The Cures Act, enacted that same year, largely focused on medical innovation, but it also authorized additional funding to combat opioid addiction and included provisions addressing various mental health and substance use activities. CRS is publishing a series of reports on the SUPPORT Act, which consists of eight titles. This report summarizes the provisions in Title VII and VIII of the SUPPORT Act. Title VII, Public Health Provisions, includes a number of provisions that seek to improve the information collected about opioid abuse and increase access to treatment by supporting treatment programs and providers, among other things. Title VIII, Miscellaneous, includes, among others, provisions related to child welfare, the Department of Justice (DOJ), and drug testing required by the Department of Transportation (DOT). It also includes several revenue-related provisions and the budget effects of this act and also describes Section 4003, an offset included in Title IV related to individuals who seek a religious exemption from the requirement to maintain health insurance coverage.
Dec 3, 2018
Managed Trade and Quantitative Restrictions: Issues for Congress
Dec 3, 2018
Overview of the ACA Medicaid Expansion
Dec 3, 2018
Russia’s Use of Force Against the Ukrainian Navy
Naval Incident Escalates Tensions On November 25, 2018, Russian coast guard vessels in the Black Sea forcibly prevented two small Ukrainian armored artillery boats and a tugboat from transiting the Kerch Strait en route to the Ukrainian port of Berdyansk, on the Sea of Azov, according to official Ukrainian and Russian reports (see Figure 1). After ramming the tugboat and blockading all three boats for hours, the Russian vessels reportedly fired on them as they sought to leave the area, injuring six sailors. The Ukrainian boats and their 24 crew members were detained and taken to Kerch, in the Russian-occupied Ukrainian region of Crimea. The sailors were arrested and placed in pretrial detention on charges of illegally crossing what Russia refers to as its state border (i.e., the territorial waters around occupied Crimea). Observers generally viewed the incident as a major escalation of tensions between Russia and Ukraine. Russia Tightens Control In May 2018, Russian President Vladimir Putin opened a new 12-mile-long bridge linking Russia to Crimea over the Kerch Strait, the waterway connecting the Black Sea to the Sea of Azov. The bridge was designed to accommodate an existing shipping lane, but it imposes new limits on the size of ships that transit the strait. Observers note that since the bridge’s opening, Russia has stepped up its interference with commercial traffic traveling to and from Ukrainian ports in Mariupol and Berdyansk, which export steel, grain, and coal. Russian authorities reportedly have imposed delays at the bridge and conducted inspections of vessels. Russian authorities also have established notification and transit procedures for ships seeking to pass through the strait; during the November 25 incident, Russian authorities invoked what they considered noncompliance with these procedures as partial justification for denying the Ukrainian boats passage. Since the bridge opened, Russia and Ukraine have bolstered their maritime forces in the Sea of Azov. For Russia, this has included transferring to the area (via an inland waterway) naval ships previously assigned to a flotilla in the Caspian Sea. The Ukrainian artillery boats that attempted to transit the Kerch Strait on November 25 were the second pair of naval ships to pass through the strait; a command ship and tugboat crossed in September 2018, escorted by Russian coast guard vessels (other Ukrainian ships have arrived over land). A 2003 bilateral agreement between Ukraine and Russia affirms freedom of navigation through the strait for both countries (it might be argued that customary international law as reflected in the United Nations Charter on the Law of the Sea, or UNCLOS, also does that). According to Ukrainian officials, the agreement allows for Russian inspections, since it recognizes the Sea of Azov as shared “inland waters.” Although Ukrainian officials have considered withdrawing from the agreement, some observers believe this could further disadvantage Ukraine, since Russia could use its de facto control over Crimea and the Kerch Strait to assert sovereignty over most of the Sea of Azov and further restrict Ukrainian and third-party access. Ukraine is seeking the return of its sailors and ships. It also seeks to call attention to what it considers a major escalation in Russia’s efforts to control access to the Sea of Azov. Ukrainians are particularly concerned that Russia’s actions could lead to a blockade of Ukraine’s eastern territories and possibly expanded military operations on land. Figure 1. Southern Ukraine and the Sea of Azov / Source: Congressional Research Service. Martial Law in Ukraine The Ukrainian government introduced 30 days of martial law from November 28, 2018, in regions of the country bordering Russia, the Black Sea and Sea of Azov, and Moldova (where Russian troops are stationed in the separatist region of Transnistria). During the period of martial law, reportedly, the administrative border with Crimea is to remain closed to non-Ukrainian passport holders and Russian male nationals are to be barred from entering Ukraine. U.S. and European Reactions The United States and much of the international community rejects Russia’s claims to sovereignty over Crimea and, by extension, surrounding waters. The United States and the European Union (EU) have called on Russia to release the Ukrainian sailors, return the vessels, and restore freedom of passage through the strait; they also called Russia’s actions a violation of international law. On November 27, 2018, the Senate passed S.Res. 709, condemning Russia’s actions and calling on the Trump Administration “to implement an all-of-government approach to forcefully express opposition to the ... attack ... at every opportunity.” In response to the incident, according to the White House, President Trump canceled a meeting with President Putin at the recent G-20 summit in Buenos Aires. Observers debate what additional steps, if any, the United States and/or the EU should take in response. Some have called for imposing additional sanctions on Russia. Ukrainian officials and some observers have called on the United States and NATO to increase their maritime presence in the Black Sea and Sea of Azov (although only smaller warships would be physically able to pass through the strait, assuming Russia did not block their passage). A NATO spokesperson noted that NATO already has increased its presence in the Black Sea and “will continue to assess our presence in the region.” Wider Political Context in Russia and Ukraine The incident’s timing coincides with a recent increase in tensions between Russia and Ukraine due to a new willingness by the Ecumenical Patriarchate of Constantinople to grant the Ukrainian Orthodox Church formal independence (i.e., autocephaly) from the Russian Orthodox Church. Some observers believe such a development could reduce Russian influence in Ukraine. Russia strongly opposes such a move. Domestic political considerations in Russia and Ukraine also may have played a role. In recent months, Russian public support for Putin has visibly declined, with approval ratings as low as 66% (down from over 80% in the last four years); some observers interpret Russia’s action as an attempt to boost Putin’s popularity. For his part, Ukrainian President Petro Poroshenko faces stiff competition in Ukraine’s upcoming presidential election, scheduled for March 31, 2019. Some believe Poroshenko will use the incident—and potentially his strengthened authority under martial law—to his political advantage.
Dec 3, 2018
U.S. Trade Trends and Developments
Summary The United States is the world’s biggest economy (in nominal dollars), leading trading nation (goods and services), and largest source of and destination for foreign direct investment. The U.S. output of goods and services, or gross domestic product (GDP), totaled $19.5 trillion in 2017. That is almost the combined GDP in nominal dollars of the next three largest economies. All told, the United States, with close to 5% of the world’s population, accounted for almost 25% of the world’s output and more than 16% of its growth in 2017. While the United States is the world’s largest exporter (goods and services combined), U.S. exports are overshadowed by the large U.S. demand for imported products. However, the level of both U.S. exports and imports of goods and services depends on many interrelated domestic and international macroeconomic factors, including the value of the U.S. dollar relative to other currencies, global demand for other dollar-denominated assets—including U.S. Treasury securities, and the relative strength of the U.S. and world economies. While the United States is still by far the dominant economy in the world, its relative position has shifted in the past two decades. The changing dynamics and composition of U.S. trade have been important to Congress because they can affect the overall health of the U.S. economy and specific industries, the success of U.S. businesses and workers, and the U.S. standard of living. They also have implications for U.S. geopolitical interests. Conversely, geopolitical tensions, risks, and opportunities can have major impacts on U.S. trade flows. These issues are complex and at times controversial, and developments in the global economy often make policymaking more challenging, as it involves balancing many competing interests. Congress is in a unique position to address these and other issues, particularly given its constitutional authority for legislating and overseeing international trade and financial policy. Key Trade and Economic Developments in 2017 World Economic Developments. World economic growth rose from 3.3% in 2016 to 3.7% in 2017. Advanced economies grew 2.3%, while emerging market and developing economies grew 4.7%—partly due to the moderate slowdown in China’s GDP growth over the past few years (from 10.6% in 2010 to 6.7% in 2017). In 2017, the United States accounted for 24.5% of global GDP (down from 30.6% in 2000), China for 14.7% (up from 3.6% in 2000), Japan for 6.5% (down from 14.6% in 2000), and Germany for 4.6% (down from 5.8% in 2000). In addition, world merchandise trade recorded its largest increase since 2011. In nominal terms, world merchandise exports expanded 10.6% in 2017, after two years of declines, reaching $17.5 trillion. World merchandise imports also grew considerably in 2017, up 11.3%, after declining 3.2% in 2016. In addition, world exports and imports of services increased in value considerably in 2017, up 7.7% and 6.9%, respectively. U.S. Goods Trade. U.S. merchandise exports totaled $1.6 trillion in 2017, a 6.6% increase from the 2016 level. The value of U.S. merchandise imports was $2.4 trillion over the same period, up 6.9% from the 2016 level. U.S. imports increased more than U.S. exports, leading to a $56.4 billion (7.5%) increase in the U.S. merchandise trade deficit, which reached $807.5 billion in 2017. In 2017, the European Union (EU) was the United States’ top trading partner in terms of two-way (exports plus imports) merchandise trade (accounting for 22.5% of total U.S. merchandise trade), while China was the largest single-country trading partner (accounting for 16.3% of total U.S. merchandise trade). U.S. Services Trade. U.S. two-way (exports and imports) trade in services grew 5.6% between 2016 and 2017. During that period, U.S. exports of services increased 5.1%, from $758.9 billion to $797.7 billion, while U.S. services imports grew 6.4%, from $509.8 billion to $542.5 billion. The United States maintained a services trade surplus with every major services trading partner except Hong Kong, India, and France in 2017. The overall services trade surplus increased 2.5% ($6.1 billion) to $255.2 billion. The EU was the United States’ top trading partner in terms of two-way (exports plus imports) services trade in 2017, while the largest single-country trading partners were the United Kingdom, Canada, Japan, China, and Germany. U.S. Total Trade. In 2017, U.S. exports of goods and services totaled $2.4 trillion, while U.S. imports totaled $2.9 trillion, resulting in a deficit of $552.3 billion, up slightly from 2016, but down from the all-time high level registered in 2006 ($761.7 billion). Issues for Congress International trade is one of several important drivers of economic growth. A number of questions regarding recent and future trends in U.S exports and imports could arise as the Trump Administration renegotiates U.S. free trade agreements (FTAs) and pursues news ones, and takes a more forceful stance to reduce U.S. bilateral trade deficits, enforce U.S. trade laws and agreements, and promote what it considers to be “free,” “fair,” and “reciprocal” trade. One question pertains to the impact of renegotiating or pursuing new FTAs on the U.S. economy. As with any trade liberalizing measure, an FTA can have net positive overall effects on some sectors and adverse effects on others. An FTA may create export and import opportunities in one sector of the U.S. economy but divert trade away from others. Members of Congress weigh these effects on various industries and on their constituencies, while also considering the overall impact on the United States and other trading partners. Because trade relations can differ significantly from one trade partner to another, the evaluation will likely differ in each case. Furthermore, Members may take into account not only the immediate static effects of greater global economic integration efforts, but also the long-term, dynamic effects, which could play an important role in evaluating their contribution to the U.S. economy. Finally, other issues for Congress raised by the changing patterns in U.S. trade and the global landscape could include contemplating the future direction of the global trading system, as well as assessing the quality and availability of data on trade and what, if any, additional resources should be devoted to collecting trade data and analyzing the role of trade in the U.S. economy.
Dec 3, 2018
Defense Primer: Planning, Programming, Budgeting, and Execution (PPBE) Process
Nov 30, 2018
Schemes and False Statements: Supreme Court to Consider Scope of Anti-Fraud Liability Under Securities Laws
Nov 30, 2018
World Trade Organization: Overview and Future Direction
Historically, the United States’ leadership of the global trading system has ensured the United States a seat at the table to shape the international trade agenda in ways that both advance and defend U.S. interests. The evolution of U.S. leadership and the global trade agenda remain of interest to Congress, which holds constitutional authority over foreign commerce and establishes trade negotiating objectives and principles through legislation. Congress has recognized the World Trade Organization (WTO) as the “foundation of the global trading system” within trade promotion authority (TPA) and plays a direct legislative and oversight role over WTO agreements. The statutory basis for U.S. WTO membership is the Uruguay Round Agreements Act (P.L. 103-465), and U.S. priorities and objectives for the General Agreement on Tariffs and Trade (GATT)/WTO have been reflected in various TPA legislation since 1974. Congress also has oversight of the U.S. Trade Representative and other agencies that participate in WTO meetings and enforce WTO commitments. The WTO is a 164-member international organization that was created to oversee and administer multilateral trade rules, serve as a forum for trade liberalization negotiations, and resolve trade disputes. The United States was a major force behind the establishment of the WTO in 1995, and the rules and agreements resulting from multilateral trade negotiations. The WTO encompassed and succeeded the GATT, established in 1947 among the United States and 22 other countries. Through the GATT and WTO, the United States, with other countries, sought to establish a more open, rules-based trading system in the postwar era, with the goal of fostering international economic cooperation and raising economic prosperity worldwide. Today, 98% of global trade is among WTO members. The WTO is a consensus and member-driven organization. Its core principles include nondiscrimination (most favored nation treatment and national treatment), freer trade, fair competition, transparency, and encouraging development. These are enshrined in a series of WTO trade agreements covering goods, agriculture, services, intellectual property rights, and trade facilitation, among other issues. Some countries, including China, have been motivated to join the WTO not just to expand access to foreign markets but to spur domestic economic reforms, help transition to market economies, and promote the rule of law. The WTO Dispute Settlement Understanding (DSU) provides an enforceable means for members to resolve disputes over WTO commitments and obligations. The WTO has processed more than 500 disputes, and the United States has been an active user of the dispute settlement system. Supporters of the multilateral trading system consider the dispute settlement mechanism an important success of the system. At the same time, some members, including the United States, contend it has procedural shortcomings and has exceeded its mandate in deciding cases. Many observers are concerned that the effectiveness of the WTO has diminished since the collapse of the Doha Round of multilateral trade negotiations, which began in 2001, and believe the WTO needs to adopt reforms to continue its role as the foundation of the global trading system. To date, WTO members have been unable to reach consensus for a new comprehensive multilateral agreement on trade liberalization and rules. While global supply chains and technology have transformed international trade and investment, global trade rules have not kept up with the pace of change. Many countries have turned to negotiating free trade agreements (FTAs) outside the WTO as well as plurilateral agreements involving subsets of WTO members rather than all members. At the latest WTO Ministerial conference in December 2017, no major deliverables were announced. Several members committed to make progress on ongoing talks, such as fisheries subsidies and e-commerce, while other areas remain stalled. While many were disappointed by the limited progress, in the U.S. view, the outcome signaled that “the impasse at the WTO was broken,” paving the way for groups of like-minded countries to pursue new work in other key areas. Certain WTO members have begun to explore aspects of reform and future negotiations. Potential reforms concern the administration of the organization, its procedures and practices, and attempts to address the inability of WTO members to conclude new agreements. Proposed DS reforms also attempt to improve the working of the dispute settlement system, particularly the Appellate Body—the seven-member body that reviews appeals by WTO members of a panel’s findings in a dispute case. Some U.S. frustrations with the WTO are not new and many are shared by other trading partners, such as the European Union. At the same time, the Administration’s overall approach has spurred new questions regarding the future of U.S. leadership and U.S. priorities for improving the multilateral trading system. Concerns have emphasized that the Administration’s recent actions to unilaterally raise tariffs under U.S. trade laws and to possibly impede the functioning of the dispute settlement system might undermine the credibility of the WTO system. A growing question of some observers is whether the WTO would flounder for lack of U.S. leadership, or whether other WTO members like the EU and China taking on larger roles would continue to make it a meaningful actor in the global trade environment. The growing debate over the role and future direction of the WTO may be of interest to Congress. Important issues it may address include how current and future WTO agreements affect the U.S. economy, the value of U.S. membership and leadership in the WTO, whether new U.S. negotiating objectives or oversight hearings are needed to address prospects for new WTO reforms and rulemaking, and the relevant authorities and impact of potential U.S. withdrawal from the WTO on U.S. economic and foreign policy interests.
Nov 29, 2018
Budgetary Decisionmaking in Congress
Nov 29, 2018
Commercial Space: Federal Regulation, Oversight, and Utilization
U.S. companies have always been involved in spaceflight as contractors to government agencies. Increasingly, though, space is becoming commercial. A majority of U.S. satellites are now commercially owned, providing commercial services, and launched by commercial launch providers. Congressional and public interest in space is also becoming more focused on commercial activities, such as companies developing reusable rockets or collecting business data with fleets of small Earth-imaging satellites. This report addresses two distinct but closely related topics: how the federal government regulates, oversees, and promotes the commercial space sector; and how the federal government itself uses (or might in the future use) commercial space capabilities. Multiple federal agencies regulate the commercial space industry, based on statutory authorities that were enacted separately and have evolved over time. The Federal Aviation Administration (FAA) licenses commercial launch and reentry vehicles (i.e., rockets and spaceplanes) as well as commercial spaceports. The National Oceanic and Atmospheric Administration (NOAA) licenses commercial Earth remote sensing satellites. The Federal Communications Commission (FCC) licenses commercial satellite communications. The Departments of Commerce and State license exports of space technology. In response to industry concerns about the complexity of this regulatory framework, the Administration and Congress have made several reform proposals, including Space Policy Directive–2, Streamlining Regulations on Commercial Use of Space; the American Space Commerce Free Enterprise Act (H.R. 2809); and the Space Frontier Act of 2018 (S. 3277). How the federal government makes use of commercial space capabilities is also evolving. The National Aeronautics and Space Administration (NASA) used to own and operate the space shuttles that contractors built for it, but since 2012 it has contracted with commercial service providers to deliver cargo to the International Space Station using their own spacecraft. The Department of Defense (DOD) has its own satellite communications capabilities, but it also procures communications bandwidth from commercial satellite companies. Agencies are considering a host of new opportunities, including acquisition of weather data from commercial satellites, acquisition of science data from commercial lunar landers, and expanded commercial utilization of the International Space Station. As Congress considers these topics, some of the questions that may arise include: Should the federal regulatory framework for commercial space activities be consolidated? Reorganization proposals include transferring the FAA’s licensing responsibilities to the Office of the Secretary of Transportation, consolidating NOAA’s licensing responsibilities and other Department of Commerce functions in the Office of the Secretary of Commerce, and creating a new civil authority for space situational awareness in either the FAA or the Department of Commerce. How can the commercial space licensing process be made simpler, more timely, and more transparent? One focus of this discussion has been the process for interagency consultation on license applications for commercial remote sensing satellites. The challenge for that process is balancing industry’s need for timeliness and transparency with the government’s need to meet national security and foreign policy objectives. How should federal regulatory policies be adjusted as the commercial space industry develops new capabilities and applications? For example, there is currently no clear mechanism for new space applications, not already subject to FAA, NOAA, or FCC regulation, to be authorized and supervised as mandated by the Outer Space Treaty. Current law restricts the FAA’s authority to regulate the safety of commercial spacecraft with human occupants. What government space activities can or should be conducted by commercial entities? How can government and industry best work together? As the commercial space industry’s capabilities expand, there may be new opportunities for agencies to execute programs via commercial contracts, but stakeholders may not always agree on which programs are suitable for a commercial approach.
Nov 29, 2018
U.S. Sanctions on Russia
Sanctions are considered by many to be a central element of U.S. policy to counter Russian malign behavior. Most Russia-related sanctions have been in response to Russia’s 2014 invasion of Ukraine. In addition, the United States has imposed sanctions on Russia in response to human rights abuses, election interference and cyberattacks, weapons proliferation, illicit trade with North Korea, support to Syria, and use of a chemical weapon. The United States also employs sanctions to deter further objectionable activities. Most Members of Congress support a robust use of sanctions amid concerns about Russia’s international behavior and geostrategic intentions. Ukraine-related sanctions are mainly based on four executive orders (EOs) the President introduced in 2014. In addition, Congress passed and the President signed into law two acts establishing sanctions in response to Russia’s invasion of Ukraine: the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 (SSIDES; P.L. 113-95) and the Ukraine Freedom Support Act of 2014 (UFSA; P.L. 113-272). In 2017, Congress passed and the President signed into law the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA; P.L. 115-44, Countering America’s Adversaries Through Sanctions Act [CAATSA], Title II). This legislation codifies Ukraine-related and cyber-related EOs, strengthens existing Russia-related sanctions authorities, and identifies several new targets for sanctions. It also establishes congressional review of any action the President takes to ease or lift a variety of sanctions. Additional sanctions on Russia may be forthcoming. On August 6, 2018, the United States determined that in March 2018 the Russian government used a chemical weapon in the United Kingdom in contravention of international law. In response, the United States launched an initial round of sanctions on Russia, as required by the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act; P.L. 102-182, Title III). The law requires a second, more severe round of sanctions in the absence of Russia’s reliable commitment to no longer use such weapons. The United States has imposed most Ukraine-related sanctions on Russia in coordination with the European Union (EU). Since 2017, the efforts of Congress and the Trump Administration to tighten U.S. sanctions on Russia have prompted some degree of concern in the EU about U.S. commitment to sanctions coordination and U.S.-EU cooperation on Russia and Ukraine more broadly. The EU, in addition, continues to consider its response to Russia’s use of a chemical weapon in the United Kingdom. Debates about the effectiveness of U.S. and other sanctions on Russia continue in Congress, in the Administration, and among other stakeholders. Russia has not reversed its occupation and annexation of Ukraine’s Crimea region, nor has it stopped fostering separatism in eastern Ukraine. With respect to other malign activities, the relationship between sanctions and Russian behavior is difficult to determine. Nonetheless, many observers argue that sanctions help to restrain Russia or that their imposition is an appropriate foreign policy response regardless of immediate effect. In the 115th Congress, several bills have been introduced to increase the use of sanctions in response to Russia’s malign activities. The 116th Congress is likely to continue to debate the role of sanctions in U.S. foreign policy toward Russia.
Nov 28, 2018
Defense Primer: The Military Departments
Nov 28, 2018
U.S. Tariff Policy: Overview
Nov 28, 2018
Federal Pell Grant Program of the Higher Education Act: Primer
The federal Pell Grant program, authorized by Title IV of the Higher Education Act of 1965, as amended (HEA; P.L. 89-329), is the single largest source of federal grant aid supporting postsecondary education students. Pell Grants, and their predecessor, Basic Education Opportunity Grants, have been awarded since 1973. The program provided approximately $29 billion in aid to approximately 7.2 million undergraduate students in FY2017. Pell Grants are need-based aid that is intended to be the foundation for all need-based federal student aid awarded to undergraduates. To be eligible for a Pell Grant, an undergraduate student must meet several requirements. One key requirement is that the student and his or her family demonstrate financial need. Financial need is determined through the calculation of an expected family contribution (EFC), which is based on applicable family financial information provided on the Free Application for Federal Student Aid (FAFSA). Although there is no absolute income threshold that determines who is eligible or ineligible for Pell Grants, an estimated 95% of Pell Grant recipients had a total family income at or below $60,000 in academic year 2015-2016. Other requirements include, but are not limited to, the student not having earned a bachelor’s degree and being enrolled in an eligible program at an HEA Title IV-participating institution of higher education for the purpose of earning a certificate or degree. The maximum annual award a student may receive during an academic year is calculated in accordance with the Pell Grant award rules. The student’s scheduled award is the least of (1) the total maximum Pell Grant minus the student’s EFC, or (2) Cost of Attendance (COA) minus EFC. For a student who enrolls on a less-than-full-time basis, the student’s maximum annual award is the scheduled award ratably reduced. For FY2019 (academic year 2019-2020), the total maximum Pell Grant is $6,195. The COA is a measure of a student’s educational expenses for the academic year. Qualified students who exhaust their scheduled award and remain enrolled beyond the academic year (e.g., enroll in a summer semester) during an award year receive a year-round or summer Pell Grant. With year-round Pell Grants, qualified students may receive up to 1½ scheduled grants in each award year. Finally, a student may receive the value of no more than 12 full-time semesters (or the equivalent) of Pell Grant awards over a lifetime. The program is funded primarily through annual discretionary appropriations, although in recent years mandatory appropriations have played an increasing role in the program. The total maximum Pell Grant is the sum of two components: the discretionary maximum award and the mandatory add-on award. The discretionary maximum award amount is funded by discretionary appropriations enacted in annual appropriations acts, and augmented by permanent and definite mandatory appropriations provided for in the HEA. For FY2019, the discretionary appropriation is $22.475 billion and the augmenting mandatory funds total $1.370 billion. The mandatory add-on award amount is funded entirely by a permanent and indefinite mandatory appropriation of such sums as necessary, as authorized in the HEA. The mandatory add-on is estimated to require $6.077 billion in FY2019. Funding provided for the Pell Grant program is exempt from sequestration. The Pell Grant program is often referred to as a quasi-entitlement because for the most part eligible students receive the Pell Grant award level calculated for them without regard to available appropriations. In a given year, the discretionary appropriation level may be smaller or larger than the actual cost to fund the discretionary maximum award, despite the augmenting mandatory appropriation. When the discretionary appropriation is too small, the program carries a shortfall into the subsequent fiscal year. When the discretionary appropriation is too large, the program carries a surplus into the following fiscal year. Since FY2012, the program has maintained a surplus. The surplus has variably been used to increase Pell Grant awards, expand eligibility, and either fund other programs or reduce the national deficit.
Nov 28, 2018
Brexit at a Pivotal Moment
UK Parliament to Vote on Withdrawal Agreement Four months away from the United Kingdom’s (UK’s) expected withdrawal from the European Union (EU), discord and uncertainty remain central themes in the analysis of “Brexit.” The efforts of UK and EU negotiators to reconcile a complex set of competing interests and preferences have produced a 585-page draft withdrawal agreement and a 26-page political declaration on the future UK-EU relationship. EU leaders signed off on the deal in late November 2018, leaving a vote by the European Parliament as the final step for approval by the EU before the March 29, 2019, withdrawal date. In the UK, however, pronounced divisions remain about how Brexit should look. The withdrawal agreement faces a crucial test when the UK Parliament votes on whether to approve it, a vote expected to occur on December 11, 2018. A Tough Sell Securing passage in the UK’s Parliament is expected to be challenging for UK Prime Minister Theresa May. The draft agreement contains elements strongly disliked by each of the main British political factions. A transition period and the so-called Northern Ireland backstop are particular points of contention. During a proposed transition period lasting through 2020, which might be extended through 2022, the UK would be bound to follow all rules governing the EU single market while the two sides negotiate their future relationship. The backstop provision would keep the UK in the EU customs union beyond the transition period unless and until the two sides agree on alternate arrangements. The backstop was made necessary by the lack of an apparent solution to the Irish border question, with both sides intent on avoiding a “hard border” (with customs checks and physical border infrastructure) between Northern Ireland and the Republic of Ireland to preserve the peace process and extensive cross-border economic relations. Supporters of a “hard Brexit” fear the transition period and backstop could lead to the UK ending up a “vassal state” of the EU, bound indefinitely to EU rules in a wide range of areas (both sides would have to jointly agree to end the backstop). The UK would gain sovereign control over immigration policy but, as a member of the EU customs union, would be unable to conduct an independent national trade policy and conclude its own trade agreements, negating one of the main arguments made in favor of Brexit. It also would have to accept EU economic regulations and rules in areas such as the environment and labor market. Skeptics of Brexit also criticize the deal as not only relegating the UK to a “rule taker” without a say in EU decisionmaking but also failing to provide certainty about future trading conditions. Advocates of “soft Brexit,” including much of the UK business community, maintain that permanent membership in the EU single market would be the least damaging outcome in economic terms and that an assurance of permanent customs union membership would mitigate Brexit-related uncertainties. Some in Parliament may vote against the deal in the hopes that its defeat would lead to an early general election or a second referendum on EU membership. Meanwhile, Northern Ireland’s Democratic Unionist Party (DUP), whose backing is critical to Prime Minister May’s Conservative Party in Parliament, maintains strong objections to a provision in the backstop that would preserve deeper regulatory alignment between Northern Ireland and the EU to avoid a hard border. The DUP and others argue that treating Northern Ireland differently from the rest of the UK is unacceptable and threatens the UK’s constitutional integrity. Prime Minister May maintains that the backstop will never come into effect because subsequent negotiations on the future relationship with the EU will make it unnecessary. The declaration on the future relationship with the EU outlines ambitions for deep cooperation and a UK-EU free trade area alongside the development of an independent UK trade policy. Many critics are not reassured by the text, however, viewing it as vague and noncommittal. The document envisions that a variety of “facilitative arrangements and technologies” could be used to overcome the impasse over customs checks at the Irish border. This Deal or No Deal? With potential opposition to the deal from a significant minority of Conservative Party members of Parliament (MPs), the DUP, and most of the Labour Party and other opposition parties, the initial arithmetic for passing the withdrawal agreement in Parliament appears unfavorable. If Parliament rejects the deal, a range of possible scenarios come into play, including Brexit without a negotiated withdrawal agreement (“no-deal Brexit”), a new attempt to negotiate a better deal, a leadership challenge to May and/or an early general election in the UK, and a second referendum. Several of these scenarios would suggest a need to extend the two-year window for the withdrawal process. The threat of a no-deal Brexit may convince some MPs to vote in favor of the package despite their misgivings. Hard-line supporters of Brexit assert that a no-deal scenario could be managed through side deals on critical issues such as citizens’ rights and civil aviation. Many others, however, view a no-deal Brexit and a disorderly exit from the EU as a recipe for deep legal uncertainty and potentially severe economic disruption, and they urge Parliament to avoid such a scenario. Issues for Congress Given that both the UK and the EU are important U.S. partners on a range of global political and economic issues, many Members of Congress have a broad interest in Brexit. Administration officials and some Members have expressed support for a prospective U.S.-UK free trade agreement and may wish to consider how the outcome of the withdrawal negotiations affects the prospects for such an agreement. Brexit-related developments also have implications for transatlantic cooperation on foreign policy and security issues, including sanctions, counterterrorism, and defense cooperation. In addition, Members of Congress may have an interest in how Brexit might affect the peace process in Northern Ireland.
Nov 28, 2018
Which Punishment Fits Which Crime?: Supreme Court to Consider Whether Portion of Supervised Release Statute is Unconstitutional
Nov 27, 2018