CRS Reports

The Plug-In Electric Vehicle Tax Credit

Nov 6, 2018

Robbery, Extortion, and Bribery in One Place: A Legal Overview of the Hobbs Act

The Hobbs Act proscribes obstructing commerce by means of robbery or extortion or attempting or conspiring to do so. The Act applies to individuals and legal entities alike. It permits prosecutions, although the impact on commerce may be minimal. It condemns the robbery—knowingly taking the property of another by force or threat—of drug dealers, mom-and-pop markets, and multinational corporations. Attempted Hobbs Act robbery consists of an intent to rob, coupled with a substantial step toward that objective; conspiracy, a scheme of two or more to rob or extort; and accomplice liability, aiding and abetting a Hobbs Act violation of another. Hobbs Act robbery, punishable by imprisonment for not more than 20 years, often occurs in confluence with the use of a firearm during and in furtherance of its commission, a fact that triggers the mandatory minimum sentences authorized in 18 U.S.C. § 924(c). The facts present in a Hobbs Act robbery case may also implicate violations of (1) the federal racketeering statute punishable by imprisonment for not more than 20 years and (2) the federal money laundering statutes, likewise punishable by imprisonment for not more than 20 years. Hobbs Act extortion comes in two forms. One is akin to robbery, the other to bribery. Neither requires but a minimal impact on commerce. Both view individuals as well as organizations as potential defendants. As a robbery look-alike, it outlaws the wrongful use of force or fear to induce another to surrender property to which the aggressor has no lawful claim. As a bribery look-alike, it outlaws corrupt quid pro quos, i.e., a public official obtaining a payment, to which he is not entitled, in anticipation of the performance of an official act. The proscriptions also apply to attempt or conspiracy to commit either variety of Hobbs Act extortion and may implicate accomplice liability (aiding and abetting) as well. Hobbs Act extortion in either form is punishable by imprisonment for not more than 20 years. Moreover, in addition to the racketeering and money laundering, the facts in a Hobbs Act extortion case may also implicate the Travel Act, which condemns interstate travel to promote an extortion or bribery scheme and that carries a penalty of imprisonment for not more than five years.

Nov 6, 2018

Presidential Disability Under the Twenty-Fifth Amendment: Constitutional Provisions and Perspectives for Congress

Sections 3 and 4 of the Twenty-Fifth Amendment to the U.S. Constitution provide for presidential disability or inability. Section 3 of the amendment sets the procedure whereby a President may declare himself or herself “unable to discharge the powers and duties” of the office by transmitting a written declaration to this effect to the President pro tempore of the Senate (President pro tem) and the Speaker of the House of Representatives (Speaker). For the duration of the disability, the Vice President discharges the President’s powers and duties as Acting President. When the President transmits “a written declaration to the contrary” to the President pro tem and the Speaker, he or she resumes the powers and duties of the office. Section 3 is intended to cover either unanticipated disability, such as injury or illness, or anticipated disability, such as medical treatment. It has been activated three times under circumstances in which the President underwent general anesthesia for medical treatment. It was informally implemented by President Ronald Reagan in 1985 and was formally implemented twice by President George W. Bush, in 2002 and 2007, under similar circumstances. Section 4 provides for instances of contingent presidential disability. It was intended by the Twenty-Fifth Amendment’s authors to provide for cases in which a President was unable or unwilling to declare a disability. In these circumstances, the section authorizes the Vice President and a majority of either the Cabinet, or such other body established by law (a presidential disability review body), acting jointly, to declare the President to be disabled. When they transmit a written message to this effect to the President pro tem and the Speaker, the Vice President immediately assumes the powers and duties of the office as Acting President. If the President, at a time of his choice, transmits a written message to the President pro tem and the Speaker that no disability exists, he or she resumes office. The Vice President and a majority of the Cabinet or disability review body may, however, contest this finding by a written declaration to the contrary to the aforementioned officers, delivered within four days of the President’s declaration. Congress then decides the question, assembling within 48 hours if it is not in session. If Congress decides by a two-thirds vote of both houses that the President is unable to discharge the duties of the office, the Vice President continues as Acting President until the disability is resolved. If the two-thirds margin is not obtained, or if Congress is in session at the time but does not vote on the question within 21 days of receiving the requisite declaration, then the President resumes the powers and duties of the office. Similarly, if Congress is not in session at the time, and assembles as required by Section 4, but does not vote within 21 days of the day on which it is required to assemble, then the President resumes the powers and duties of the office. Section 4’s complexity and concern about its potential for misuse have raised questions among some observers that it could be implemented for political purposes. During debate on the amendment, its authors and proponents largely rejected such claims. They insisted the section was not intended to facilitate the removal of an unpopular or failed President, in support of which they cited checks and balances incorporated in the amendment that were designed to prevent abuse of the procedure. To date, Section 4 has not been implemented. Two bills pending in the 115th Congress would establish a presidential disability review body as authorized by Section 4 of the Twenty-Fifth Amendment: H.R. 1987, introduced on April 6, 2017, and H.R. 2093, introduced on April 14 of the same year. H.R. 1987 has been referred to the House Committee on House Rules and the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned. H.R. 2093 has been referred to Judiciary Committee’s Subcommittee on the Constitution and Civil Justice.

Nov 5, 2018

The Energy Credit or Energy Investment Tax Credit (ITC)

Nov 2, 2018

National and International Educational Assessments

Nov 2, 2018

National and International Educational Assessments: Overview, Results, and Issues

U.S. students participate in many assessments to track their educational achievement. Perhaps the most widely discussed of these are statewide assessments required by the Elementary and Secondary Education Act (ESEA), which was most recently comprehensively amended by the Every Student Succeeds Act (ESSA; P.L. 114-95). However, U.S. students also participate in large-scale national assessments, authorized by the National Assessment of Educational Progress Assessment Act (NAEPAA; Title III, Section 303 of P.L. 107-279), and international assessments, authorized by the Education Sciences Reform Act (ESRA; Title I, Section 153(a)(6) of P.L. 107-279). At the national level, students participate in the National Assessment of Educational Progress (NAEP). At the international level, U.S. students participate in the Trends in International Mathematics and Science Study (TIMSS), Progress in International Reading Literacy Study (PIRLS), and Program for International Student Assessment (PISA). Although there are some similarities between statewide, national, and international assessments, they differ in purpose and level of reporting. For example, the purpose of statewide assessments is primarily to inform statewide accountability systems and provide information on individual achievement. By contrast, the purpose of large-scale assessments is to highlight achievement gaps, track national progress over time, compare achievement within the United States, and compare U.S. achievement to that of other countries. Results of these assessments are not reported for individuals. National Assessments: The NAEP is a series of assessments measuring achievement in various content areas. The long-term trends NAEP (LTT NAEP) has tracked achievement since the 1970s and has remained relatively unchanged. The main NAEP assessment has tracked achievement since the 1990s and changes periodically to reflect changes in school curricula. The main NAEP has three levels: national, state, and Trial Urban District Assessment (TUDA). States that receive Title I-A funding under the ESEA are required to participate in biennial state NAEP assessments in reading and mathematics for 4th and 8th grade. Results from the 2017 main NAEP show a small but significant increase in 8th grade reading since 2015. There were no significant changes in 4th grade reading, 4th grade mathematics, or 8th grade mathematics since 2015. Longer term, however, average reading and mathematics scores have increased significantly since the initial administrations in the 1990s. International Assessments: The United States participates in three international assessments: TIMSS, PIRLS, and PISA. TIMSS is an assessment of mathematics and science for 8th grade students. PIRLS is an assessment of reading literacy for 4th grade students. PISA is an assessment of reading literacy, mathematics literacy, and science literacy for 15 year old students. In general, U.S. students have made statistically significant gains since the initial administrations of international assessments; however, achievement did not consistently increase in the most recent administrations of international assessments. Issues of Interpretation of National and International Assessments: Results of national and international assessments are difficult to interpret. One challenge is processing the large amount of data. Another is understanding the difference between statistical significance and educational significance. Reporting statistical significance is standard practice in research, but it does not convey the magnitude of a difference and its associated educational significance. Another issue is the tendency to focus narrowly on one assessment at one point in time. A narrow focus may not provide the appropriate context to interpret results accurately. International assessment results may also be affected by socioeconomic considerations within and across countries. Comparing Results Across Assessments: Comparing results across national and international assessments can be challenging. Each assessment was created for a unique purpose by different groups of stakeholders, which makes direct comparisons difficult. There are a number of issues to consider when evaluating U.S. students’ performance across assessments. For example, consideration must be given to the differences in (1) the degree of alignment of content standards and assessments, (2) the target population being assessed, (3) the voluntary nature of student participation, (4) the participating education systems, (5) the scale of the assessment, and (6) the precision of measurement for each assessment.

Nov 2, 2018

EPA’s Affordable Clean Energy Proposal

In August 2018, the U.S. Environmental Protection Agency (EPA) proposed three actions in the “Affordable Clean Energy Rule” (ACE). First, EPA proposed to replace the Obama Administration’s 2015 Clean Power Plan (CPP) with revised emission guidelines for existing fossil fuel steam electric generating units (EGUs), which are largely coal-fired units. Second, EPA proposed revised regulations to implement emission guidelines under Clean Air Act (CAA) Section 111(d). Third, EPA proposed to modify an applicability determination for New Source Review (NSR), a CAA preconstruction permitting program for new and modified stationary sources. The first action stems from EPA’s finding that the CPP exceeded EPA’s statutory authority by using measures that applied to the power sector rather than measures carried out within an individual facility. In the ACE rule, EPA proposed to base the “best system of emission reduction” (BSER) for existing coal-fired EGUs on heat rate improvement (HRI) measures. EPA did not propose a BSER for other types of EGUs, such as natural gas combined cycle units. In addition, EPA did not establish a numeric performance standard as the agency did in the CPP. Instead, EPA proposed a list of “candidate technologies” of HRI measures that constitute the BSER. States would establish unit-specific performance standards based on this list and other unit-specific considerations. Second, EPA proposed to revise the general implementing regulations to clarify EPA’s and states’ roles under Section 111(d) based on the agency’s current legal interpretation that states have broad discretion to establish emissions standards consistent with the BSER. The proposed changes would, among other things, revise definitions and lengthen the time for development and review of state plans. Third, EPA proposed to revise the NSR applicability test for EGUs. According to EPA, this would prevent NSR from discouraging the installation of energy efficiency measures. EGUs that adopt HRI measures and operate more efficiently may be used for longer time periods, thereby increasing annual emissions and potentially triggering NSR. Under ACE, NSR would not be triggered if the EGU modification did not increase emissions on an hourly basis, even if the modification increases annual emissions. EPA estimated emission changes under multiple scenarios. EPA projected that power sector emissions of carbon dioxide (CO2), sulfur dioxide (SO2), and nitrogen oxides (NOx) would increase under the ACE proposal compared to the CPP. EPA also projected that ACE would, in most scenarios, decrease CO2, SO2, and NOx emissions compared to a baseline without the CPP. Power sector emissions projections, comparing CPP and non-CPP scenarios, provide context for evaluating the potential impacts of the ACE proposal. The CO2 emission reduction differences between CPP and non-CPP scenarios are greater in the studies from earlier years. For example, a comparison between CPP and non-CPP scenarios from the past three Energy Information Administration analyses shows that the percentage difference has decreased from 16% (in 2016) to 8% (in 2018), reflecting the fact that many of the changes EPA expected to result from the CPP (i.e., natural gas and renewables replacing coal-fired units) have happened already due to market forces and other factors. Comparisons between modeling projections of electricity sector CO2 emissions should be made with caution, however, given potential differences in modeling assumptions about future economic conditions and underlying energy inputs (e.g., natural gas prices). EPA estimated that compared to the CPP, ACE would reduce compliance costs and yield lower emission reductions, thereby increasing climate-related damages and human health damages (“forgone benefits”). According to EPA, the estimated value of the forgone benefits would outweigh the compliance cost savings when replacing the CPP with ACE, yielding net costs. Specifically, EPA estimated that this replacement would yield net costs ranging from $12.8 billion to $72.0 billion (2016$) over a 15-year period (2023-2037). Excluding forgone human health co-benefits from these comparisons yields estimates that range from a net cost of $5.4 billion to a net benefit of $3.4 billion over a 15-year period (2023-2037).

Nov 2, 2018

VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018 (VA MISSION Act; P.L.115-182)

On June 6, 2018, the John S. McCain III, Daniel K. Akaka, and Samuel R. Johnson VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018, or the VA MISSION Act of 2018 (S. 2372; P.L. 115-182; H.Rept. 115-671), was signed into law. The Department of Veterans Affairs Expiring Authorities Act of 2018 (S. 3479; P.L. 115-251), enacted on September 29, 2018, made some changes and technical amendments to the VA MISSION Act. This act, as amended, broadly addresses four major areas. First, it establishes a new permanent Veterans Community Care Program (VCCP), replacing the current Veterans Choice Program (VCP). The VA MISSION Act stipulates that the new program must be operational when regulations are published by the Department of Veterans Affairs (VA) no later than one year after the date of enactment (June 6, 2018), or when the VA determines that 75% of the amounts deposited in the Veterans Choice Fund (VCF) have been exhausted. Second, it expands the current Program of Comprehensive Assistance for Family Caregivers, in two phases, to all eligible veterans who served prior to September 11, 2001. Third, it establishes an asset and infrastructure review process by establishing an Asset and Infrastructure Review Commission. The purpose of the commission is to examine the VA’s assets and to make recommendations for modernizing and realigning medical facilities. Fourth, it provides various statutory authorities to the Veterans Health Administration (VHA) of the VA to recruit and retain health care providers. Veterans Community Care Program (VCCP) The VA MISSION Act establishes a new permanent discretionary community care program known as VCCP. The act provides conditions under which the VA is required to provide care in the community once the program is established. Generally, all veterans enrolled in the VA health care system would be able to qualify when (1) the VA does not offer the care or service required by the veteran; or (2) the veteran resides in a state without a full-service VA medical facility; or (3) the veteran previously qualified under the 40-mile criterion of the VCP; or (4) the VA cannot provide the veteran with care and services that comply with designated access and quality standards; or (5) the veteran and the veteran’s primary care provider agree that it is in the best interest of the veteran to receive care in the community. In addition, the VA is required to enter into contracts to build a network of private community providers. Expansion of Comprehensive Assistance for Family Caregivers The VA MISSION Act expands the Program of Comprehensive Assistance for Family Caregivers to pre-9/11 veterans in two phases. Under the first phase, veterans with serious service-connected injuries incurred on or before May 7, 1975, would qualify for benefits over a two-year period beginning on the date when the VA certifies to Congress that it has fully implemented the information technology system required for this program. Under the second phase, those with serious service-connected injuries incurred between May 7, 1975, and September 11, 2001, would qualify for the Comprehensive Assistance for Family Caregivers program two years after implementation of the first phase. Capital Asset Review The VA MISSION Act establishes a process for realigning and modernizing facilities of the VHA. Under this process, the VA will develop criteria for selecting VHA facilities to dispose of, modernize, or acquire, so as to better meet the health care needs of veterans. VA must then create a list of recommendations based on those criteria and submit it to a newly created Asset Infrastructure Review (AIR) Commission. The AIR Commission shall review the VA’s recommendations but may not alter them, unless it determines that one or more recommendations are inconsistent with the criteria. The commission shall submit the list of recommendations to the President, who shall either approve the list in its entirety or send it back to the AIR Commission. The AIR Commission may change the recommendations and resubmit a revised list to the President for reconsideration. The President may approve or disapprove of the revised list. If the President approves of the original or revised list, then VA must begin implementation of the recommendations within three years, unless Congress passes a joint resolution of disapproval, in which case the asset review process terminates. Recruiting and Retaining Health Care Providers in the VHA The VA MISSION Act authorizes or expands several programs, with the intention of recruiting and retaining health care providers in the VHA. Among other things, the act increases the maximum amount of student loan debt that may be reduced under VA’s Education Debt Reduction Program (EDRP); authorizes designated scholarships for physicians and dentists under the VA Health Professional Scholarship Program (HPSP); establishes the VA specialty education loan repayment program to incentivize VHA employees to pursue education and training in medical specialties for which VA determines there is a shortage; establishes a pilot Veterans Healing Veterans Medical Access and Scholarship Program; and extends eligibility for VA’s EDRP to clinical staff working at Vet Centers. The act also requires the VHA to establish a program to deploy mobile health teams to serve in underserved VA medical facilities. Lastly, the VA MISSION Act authorizes and appropriates $5.2 billion in mandatory funding for the VCP until the VCCP is operational.

Nov 1, 2018

U.S. Trade Policy Functions: Who Does What?

Nov 1, 2018

California Dreamin’ of Privacy Regulation: The California Consumer Privacy Act and Congress

Nov 1, 2018

U.S. Ground Forces Robotics and Autonomous Systems (RAS) and Artificial Intelligence (AI): Considerations for Congress

The nexus of robotics and autonomous systems (RAS) and artificial intelligence (AI) has the potential to change the nature of warfare. RAS offers the possibility of a wide range of platforms—not just weapon systems—that can perform “dull, dangerous, and dirty” tasks—potentially reducing the risks to soldiers and Marines and possibly resulting in a generation of less expensive ground systems. Other nations, notably peer competitors Russia and China, are aggressively pursuing RAS and AI for a variety of military uses, raising considerations about the U.S. military’s response—to include lethal autonomous weapons systems (LAWS)—that could be used against U.S. forces. The adoption of RAS and AI by U.S. ground forces carries with it a number of possible implications, including potentially improved performance and reduced risk to soldiers and Marines; potential new force designs; better institutional support to combat forces; potential new operational concepts; and possible new models for recruiting and retaining soldiers and Marines. The Army and Marines have developed and are executing RAS and AI strategies that articulate near-, mid-, and long-term priorities. Both services have a number of RAS and AI efforts underway and are cooperating in a number of areas. A fully manned, capable, and well-trained workforce is a key component of military readiness. The integration of RAS and AI into military units raises a number of personnel-related issues that may be of interest to Congress, including unit manning changes, recruiting and retention of those with advanced technical skills, training, and career paths. RAS and AI are anticipated to be incorporated into a variety of military applications, ranging from logistics and maintenance, personnel management, intelligence, and planning to name but a few. In this regard, most consider it unlikely that appreciable legal and ethical objections to their use by the military will be raised. The most provocative question concerning the military application of RAS and AI being actively debated by academics, legal scholars, policymakers, and military officials is that of “killer robots” (i.e., should autonomous robotic weapon systems be permitted to take human life?). Potential issues for Congress include the following: Would an assessment of foreign military RAS and AI efforts and the potential impact on U.S. ground forces benefit policymakers? Should the United States develop fully autonomous weapon systems for ground forces? How will U.S. ground forces counter foreign RAS and AI capabilities? How should the Department of Defense (DOD) and the Services engage with the private sector? What are some of the personnel-related concerns associated with RAS and AI? What role should Congress play in the legal and ethical debate on LAWS? What role should the United States play in potential efforts to regulate LAWS?

Nov 1, 2018

Medicaid Financing for the Territories

Oct 29, 2018

The Public Service Loan Forgiveness Program: Selected Issues

The Public Service Loan Forgiveness (PSLF) program provides Direct Loan borrowers who, on or after October 1, 2007, are employed full-time in certain public service jobs for 10 years while making 120 separate qualifying monthly payments on their Direct Loans with the opportunity to have any remaining balance of principal and interest on their loans forgiven. The program was enacted under the College Cost Reduction and Access Act of 2007 (P.L. 110-84) to encourage individuals to enter into and remain employed in public service and to alleviate the potential financial burdens associated with federal student loans of borrowers in public service occupations who were presumed generally to earn less than their counterparts in other occupations. With the opportunity to apply for program benefits first being made available on October 1, 2017, based on service completed and payments made prior to that date, many issues that span several aspects of the program have been raised and have garnered congressional interest. This report addresses numerous issues, which are highlighted below. Program implementation issues that have surfaced relate to how the PSLF program’s statutory requirements have been operationalized, difficulties experienced by borrowers in participating in the program, and difficulties in administering the program. Some of these issues include: Operationally defining what constitutes a “public service job.” This includes whether the definition in use is sufficiently targeted to meet congressional intent for the program and whether it has created inequities among types of borrowers. There have also been administrative difficulties associated with identifying and certifying qualifying employment. Determining what constitutes a “qualifying payment.” Multiple criteria related to on-time payments, time periods over which payments must be made, and specific payment amounts must be met for a payment to be considered qualifying, which may cause confusion among borrowers and create administrative difficulties. Difficulties borrowers may face when determining which repayment plan to enroll in to maximize PSLF benefits. Payments made according to an income-driven repayment (IDR) plan may decrease the monthly dollar amount of payments made, which may ultimately lead to greater amounts of PSLF forgiveness benefits. Payments made under other plans may also qualify for PSLF but may not be as valuable to borrowers in terms of eventual PSLF forgiveness benefits. The effects of loan consolidation on a borrower’s progress toward receiving PSLF benefits. Of particular importance, PSLF qualifying payments made prior to consolidation do not count toward forgiveness of the resulting Direct Consolidation Loan. The complexities and challenges that administering the program may present for the Department of Education, loan servicers, and borrowers. These include issues of communication among the parties regarding program requirements and processes, lack of coordination among loan servicers, loans servicers making errors or not completing tasks associated with the program in a timely manner, and the lack of automation of some administrative functions. Issues pertaining to PSLF program interactions with other programs and benefits relate to whether borrowers understand the interactions well enough to make rational choices and maximize available benefits and, from the federal government’s perspective, questions have arisen regarding whether the desired targeting of benefits is being achieved and about the potential costs associated with such interactions. Some of these issues include: There is no limit to the amount of loan forgiveness benefits an individual may realize under the PSLF program. While it is possible that many borrowers may receive limited benefits, some Direct Loan borrowers may realize large forgiveness benefits under the program. This outcome may be more likely to occur for borrowers of Direct PLUS Loans for graduate and professional students, which have no aggregate borrowing limits, and which were newly authorized to be made just prior to the enactment of PSLF. Also, the variety of IDR plans has expanded greatly since the PSLF program’s inception, with several of the new IDR plans providing for lower monthly payments than under the Income-Based Repayment plan—the primary IDR plan available when the PSLF program was enacted. This expansion may allow borrowers to lower monthly payments and potentially realize larger forgiveness benefits under the program. The current borrowing limits and variety of IDR plans, coupled with PSLF program benefits, have raised questions about whether certain types of students are not incentivized to limit borrowing and whether they may be less sensitive to the price of postsecondary education. Borrowers may receive benefits under a number of federal student loan repayment programs. Borrowers may also be able to avail themselves of certain income tax provisions to maximize PSLF program benefits. For borrowers, understanding whether the same service that qualifies for PSLF may also qualify for other loan repayment benefits is important, as is their understanding of how other benefits and tax provisions may interact with PSLF. From the perspective of the federal government, a key consideration may relate to what constitutes a “double benefit” for service performed by borrowers and the extent to which overlapping benefits might be provided. Broad program-related issues relate to (1) how the program fits into the overall suite of federal student aid benefits and (2) the difficulty of estimating the potential participation in and costs of the program. The enactment of the PSLF program is reflective of a broadening of the federal approach to student aid, providing more widely available assistance to individuals after a postsecondary education’s costs have been incurred. This approach may place greater emphasis on providing aid on the basis of economic circumstances after enrollment, rather than at the time of enrollment. It also makes some aid available on a targeted basis—providing relief to individuals who pursue certain types of service or occupations, rather than providing aid more broadly to individuals who enroll in postsecondary education. The granting of loan forgiveness benefits results in costs to the federal government, and there has been some speculation that the cost of PSLF could be much higher than anticipated. Limited information is available on the actual and future costs to the government of the PSLF program. It has just recently become possible to claim program benefits; thus, little is known about what the costs associated with the program will be based on the experiences of actual cohorts of borrowers. In addition, estimating potential costs may prove difficult as borrowers are not required to submit information on their intent to participate in the program until they seek forgiveness benefits after 10 years of service and qualifying payments.

Oct 29, 2018

Medicaid Coverage for Former Foster Youth Up to Age 26

Oct 26, 2018

U.S. Global Family Planning and Reproductive Health Programs: Funding Trends and Issues for Congress

Oct 26, 2018

Morocco: Background and U.S. Relations

Morocco is a constitutional monarchy with an elected parliament and local government entities. King Mohammed VI, who inherited the throne in 1999, maintains overarching political authority but has taken some liberalizing steps. In 2011, amid domestic and regional protests, the king introduced a new constitution providing more power to elected officials and expanding individual rights. The monarch nonetheless remains the arbiter of national political decision-making, the head of the military, and—as “Commander of the Faithful”—the country’s highest religious authority. The king’s seizure of the initiative in 2011 and quick response to protests arguably helped the monarchy retain its popular legitimacy and stability. In recent years, officials have struggled to respond to resurgent protests and other forms of activism that apparently reflect ongoing grievances over economic challenges, corruption, and police brutality. Successive U.S. Administrations have viewed Morocco as an important regional security, trade, and development partner. Morocco is a designated Major Non-NATO Ally, and bilateral trade and investment have expanded since a U.S.-Morocco Free Trade Agreement was signed in 2004. The United States allocated $38.6 million in bilateral aid in FY2017; Morocco is also implementing a five-year $450 million U.S. Millennium Challenge Corporation (MCC) compact, its second such program. Security cooperation has also expanded amid instability in Libya and the Sahel region of West Africa. Morocco is a purchaser of U.S. defense materiel (including F-16 jets), hosts an annual military exercise in which some 1,000 U.S. personnel participate, and is a member of the U.S.-led Global Coalition to Defeat the Islamic State. In 2017, the United States and Morocco launched an “Initiative to Address Homegrown Violent Extremists” under the auspices of the multilateral Global Counterterrorism Forum (GCTF). In September 2018, Secretary of State Michael Pompeo and Moroccan Foreign Minister Nasser Bourita pledged to reconvene a high-level U.S.-Morocco Strategic Dialogue, last held in 2015. With regard to the disputed territory of Western Sahara, the United States has recognized neither Morocco’s claim of sovereignty, nor the self-declared Sahrawi Arab Democratic Republic (SADR), led by the independence-seeking Polisario Front from exile in Algeria. The United States has provided funding and diplomatic backing for a U.N. peacekeeping operation, known as MINURSO, which was conceived to organize a referendum on the territory’s final status but currently observes a 1991 ceasefire between Morocco and the Polisario. The U.N. Security Council—including the United States, a veto-capable permanent member—has called for Morocco and the Polisario to negotiate a “mutually acceptable political solution.” U.S. officials have praised Morocco’s proposal to grant the territory autonomy under Moroccan sovereignty, while maintaining support for the U.N.-led diplomatic process. U.S.-Morocco tensions temporarily erupted in 2013 and 2016 over perceived Obama Administration support for greater pressure on Morocco in the United Nations. (See CRS Report RS20962, Western Sahara, for background.) Congressional interest in the Western Sahara issue and the scope of U.S. aid has been reflected in recent appropriations legislation—most recently, §7041(g) of Division K, P.L. 115-141 and the accompanying Explanatory Statement—among other channels. Relevant bills and resolutions pending in the 115th Congress include the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2019 (H.R. 6385 and S. 3108, respectively), as well as H.Res. 1101 (Affirming the historical relationship between the United States and the Kingdom of Morocco [...]). Morocco’s foreign policy focuses on its Western partners (including the United States along with France, Spain, and the European Union); the Arab Gulf states; and sub-Saharan Africa. Since the 2011 “Arab Spring,” Morocco has drawn closer to the Gulf Cooperation Council (GCC) countries, which have provided aid and investment; it has remained officially neutral in the current rift between Qatar and other GCC countries. In mid-2018, Morocco cut ties with Iran for the second time in the past decade, accusing it of providing military support to the Polisario via Hezbollah, a U.S.-designated terrorist network. Tensions between Morocco and neighboring Algeria—a regional rival and the Polisario’s primary backer—have long stymied security and economic cooperation within North Africa. The king has instead launched various economic, trade, and exchange initiatives in sub-Saharan African countries, and in 2016, Morocco joined the African Union (AU), having previously refused to do so due to the organization’s recognition of the SADR as a member state.

Oct 26, 2018

Invasive Species: A Brief Overview

Oct 26, 2018

Pakistan’s Domestic Political Setting

Oct 26, 2018

What Legal Obligations do Internet Companies Have to Prevent and Respond to a Data Breach?

Oct 25, 2018

Regulation of Cell-Cultured Meat

Oct 25, 2018

Section 232 Auto Investigation

Oct 24, 2018

U.S.-India Trade Relations

Oct 24, 2018

Funding and Financing Highways and Public Transportation

For many years, federal surface transportation programs were funded almost entirely from taxes on motor fuels deposited in the Highway Trust Fund. The tax rates, which are fixed in terms of cents per gallon, have not been increased at the federal level since 1993. Meanwhile, motor fuel consumption is projected to decline due to improved fuel efficiency, increased use of electric vehicles, and slow growth in vehicle miles traveled. In consequence, revenue flowing into the Highway Trust Fund has been insufficient to support the surface transportation program authorized by Congress since 2008. Congress has yet to address the surface transportation program’s fundamental revenue issues, and has given limited consideration to raising fuel taxes in recent years. Instead, since 2008 Congress has supported the federal surface transportation program by supplementing fuel tax revenues with transfers from the U.S. Treasury general fund. The most recent reauthorization act, the Fixing America’s Surface Transportation Act (FAST Act; P.L. 114-94), authorized spending on federal highway and public transportation programs through September 30, 2020. The act provided $70 billion in general fund transfers to the Highway Trust Fund from FY2016 through FY2020. This use of general fund transfers to supplement the Highway Trust Fund will have been the de facto funding policy for 12 years when the FAST Act expires. Congressional Budget Office (CBO) projections indicate that the Highway Trust Fund insufficiency relative to spending will reemerge following expiration of the FAST Act. The projections indicate a shortfall of $85 billion over the first five years following the FAST Act, and $109 billion over the first six years. As the September 2020 expiration of the FAST Act approaches, Congress may again examine adjustments to the funding and financing of the federal role in surface transportation. Raising motor fuel taxes could provide the Highway Trust Fund with sufficient revenue to fully fund the program in the near term, but may not be a viable long-term solution due to expected declines in fuel consumption. It would also not address the equity issue arising from the increasing number of personal and commercial vehicles that are powered electrically and therefore do not pay motor fuel taxes. Replacing motor fuel taxes with a mileage-based road user charge would need to overcome a variety of financial, administrative, and privacy barriers, but could be a solution in the longer term. Treasury general fund transfers could continue to be used to make up for the Highway Trust Fund’s projected shortfalls but could require budget offsets of an equal amount. The political difficulty of adequately funding the Highway Trust Fund could lead Congress to consider altering the trust fund system or eliminating it altogether. This might involve a reallocation of responsibilities and obligations among federal, state, and local governments. Some surface transportation needs can be met by private investment, including public-private partnerships, and federal loans from the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. If it desires to promote private investment in transportation infrastructure, Congress could consider asset recycling incentive grants to state and local governments for the sale or lease of government-owned infrastructure if the proceeds are committed to new infrastructure. Tolling may be an effective way to finance specific roads, bridges, or tunnels that are likely to have heavy use and are located such that the tolls are difficult to evade. All revenue from tolls flows to the state or local agencies or private entities that operate tolled facilities; the federal government does not collect any revenue from tolls. However, a major expansion of tolling might reduce the need for federal expenditures on roads. Tolls and private investment are unlikely to provide broad financial support for surface transportation needs, and many projects are not well suited to alternative financing.

Oct 24, 2018

Head Start: Overview and Current Issues

Oct 23, 2018

Tax Provisions That Expired in 2017 (“Tax Extenders”)

Twenty-eight temporary tax provisions expired at the end of 2017. Collectively, temporary tax provisions that are regularly extended as a group by Congress, rather than being allowed to expire as scheduled, are often referred to as “tax extenders.” Temporary tax provisions were most recently extended in the Bipartisan Budget Act of 2018 (BBA18; P.L. 115-123). BBA18 extended nearly all of the provisions that had expired at the end of 2016, with most provisions extended through the end of 2017. For most provisions, this extension was purely retroactive. Since the BBA18 was enacted in February 2018, the extensions generally were not made available for the tax year in which the legislation was enacted. The extension of expired provisions enacted in BBA18 was estimated to reduce federal revenue by $15.1 billion between FY2018 and FY2027. All of the temporary tax provisions that expired at the end of 2017 have been included in previous “tax extender” legislation. There are several options for Congress to consider regarding temporary tax provisions. Provisions that expired at the end of 2017 could be extended. The extension could be retroactive. The extension could be short term, long term, or permanent. Another option would be to allow expired provisions to remain expired. Making permanent the temporary tax provisions that expired at the end of 2017 would reduce federal revenue by an estimated $92.5 billion between FY2018 and FY2027. This is equal to about 0.2% of current-law projected federal revenue over this period. The number of “tax extender” provisions has fallen in recent years, as has the cost associated with extending “tax extenders.” The Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016 (P.L. 114-113), made permanent a number of provisions that had been long-standing “tax extenders,” and extended several other provisions through 2019. The 2017 tax revision (P.L. 115-97) also made changes that resulted in the elimination of certain “tax extender” provisions. If Congress chooses to consider extending tax provisions that expired at the end of 2017 late in 2018, the option of extending tax provisions that are scheduled to expire at the end of 2018 might be evaluated simultaneously. The two tax provisions scheduled to expire at the end of 2018 are (1) increased excise tax rates on coal used to finance the Black Lung Disability Trust Fund; and (2) a reduction in the medical expense deduction threshold from 10% of adjusted gross income (AGI) to 7.5% of AGI. Certain disaster-related tax provisions were available for 2017 disasters. Extending or expanding these provisions to be available for 2018 disasters is a policy option that could be considered. This report provides a broad overview of “tax extenders.” More information on specific tax provisions that expired at the end of 2017 can be found in CRS Report R44925, Recently Expired Individual Tax Provisions (“Tax Extenders”): In Brief, coordinated by Molly F. Sherlock; CRS Report R44930, Business Tax Provisions that Expired in 2017 (“Tax Extenders”), coordinated by Molly F. Sherlock; and CRS Report R44990, Energy Tax Provisions That Expired in 2017 (“Tax Extenders”), by Molly F. Sherlock, Donald J. Marples, and Margot L. Crandall-Hollick.

Oct 22, 2018

Financial Innovation: Digital Assets and Initial Coin Offerings

Oct 17, 2018

Are There Any Systemically Important Nonbanks?

During the 2008 financial crisis, problems at AIG, Bear Stearns, and Lehman Brothers led to broader financial instability or government “bailouts” in order to prevent instability. At the time, these firms were nonbank financial institutions and not generally subject to effective safety and soundness regulation on a consolidated basis. The Dodd Frank Act (P.L. 111-203) provided the Financial Stability Oversight Council (FSOC) with the authority to designate nonbanks for enhanced prudential oversight by the Federal Reserve as systemically important financial institutions (SIFIs). Since enactment, FSOC has designated three insurers (AIG, MetLife, and Prudential) and one other firm (GE Capital). Subsequently, all four designations have been removed, three by FSOC and one (MetLife) through a successful lawsuit. Most recently, Prudential was de-designated on October 17, 2018. Proponents believe that designation could make it less likely that a large nonbank would experience a failure that destabilized the financial system. Opponents question whether any nonbank poses systemic risk, and if any does, whether institution-based regulation is the best way to address that risk. FSOC Designations and De-Designations The Dodd-Frank Act bases SIFI designations on whether the firm’s “material distress” or “the nature, scope, size, scale, concentration, interconnectedness, or mix of (its) activities” could pose a threat to financial stability. In deciding whether to designate a firm, FSOC primarily considers (1) if the firm’s distress would lead to financial instability for other firms or markets; (2) the extent to which the firm is already regulated; and (3) the firm’s complexity, opacity, or difficulty to resolve in the event of its failure. (For more information, see CRS Report R45162, Regulatory Reform 10 Years After the Financial Crisis: Systemic Risk Regulation of Non-Bank Financial Institutions.) FSOC annually reevaluates whether designated firms remain systemically important. FSOC de-designated AIG and GE Capital partly because of their reduction in size, through significant divestments and reductions in certain activities. AIG’s total assets fell from $1,048 billion in 2007 to $498 billion in 2016 and GE Capital divested $272 billion in assets from 2012 to 2016. (The large majority of the AIG restructuring occurred prior to its initial SIFI designation, however.) Although it was ultimately a court case that resulted in its de-designation, MetLife also undertook a substantial restructuring after its designation, spinning off lines of business and approximately $220 billion in assets to a new firm in August 2017. MetLife is, however, still the second largest insurer in the United States. Prudential, currently the largest U.S. insurer, has not undertaken any large-scale restructuring since SIFI designation—in fact, it has gotten larger. In its de-designation, FSOC found that Prudential has not significantly decreased its total market exposure, investment portfolio, market share, or resolvability. However, FSOC noted that Prudential had reduced its leverage and counterparty exposures to the largest banks, and that there had been changes to its state insurance regulation. Do Nonbanks Pose Systemic Risk? If systemic risk is mainly a function of size (i.e., “too big to fail”), then a failure to designate any large nonbank could increase the likelihood of financial instability. Figure 1 shows large financial firms based on asset size. P.L. 115-174 raised the asset threshold for automatically subjecting banks to enhanced prudential standards to $250 billion. For comparison, 10 insurers (including the three previously designated) and three other nonbanks have more than $250 billion in assets. The largest insurers (Prudential and MetLife) are comparable in size to banks such as Goldman Sachs and Morgan Stanley. However, differences in the nature of banking and other financial activities may mean that banks above $250 billion pose more systemic risk than nonbanks of the same size. For example, deposits are an important source of funding for most banks, and deposits can be withdrawn on demand. If enough deposits are withdrawn simultaneously, even strong banks would face a liquidity crisis. Insurers offer far fewer products where funds can be withdrawn on demand. Figure 1. Financial Firms With Over $250 Billion in Assets (billions of $, latest annual) / Source: Federal Reserve, S&P Capital IQ. Notes: BHC=Bank Holding Company, FBO=Foreign Banking Organization. For FBOs, includes U.S. assets only. Berkshire Hathaway includes companies engaged in financial and nonfinancial activities. Nevertheless, both large banks and nonbanks undertake other activities that could pose systemic risk. For example, both can participate in short-term debt markets where access to funding could quickly dry up in a panic, causing a liquidity crisis for the firm. Both can hold large portfolios of securities that, if sold quickly under duress (in a “fire sale”), could potentially push other firms or markets into crisis. Both typically have complex, multinational corporate structures that make their resolution complicated. As noted above, one factor in SIFI designation is the firm’s existing regulation. Insurers are regulated for safety and soundness at the state level, although there is no automatic enhanced prudential regime for large insurers analogous to that for large banks. AIG’s problems during the crisis raised concerns that state-level regulation could not adequately mitigate systemic risk posed by an insurer’s noninsurance activities (such as securities lending and credit default swaps) in the future. State regulators implemented changes after the financial crisis that attempted to address such issues, although these changes have not been tested by a crisis. Large investment firms such as Lehman Brothers and Bear Stearns posed systemic risk in the crisis, but today, all large investment firms are parts of bank holding companies or foreign banks and therefore already subject to enhanced regulation. There are government sponsored enterprises with more than $250 billion in assets that are not designated, but are regulated for safety and soundness by the Federal Housing Finance Agency (one of the three factors for designation). No asset managers or lending companies own over $250 billion in assets, but some asset managers that are not part of bank holding companies manage trillions of dollars in customer assets. Losses on assets under management, in isolation, do not pose risk to the firm because they would be borne by customers. Nevertheless, a (controversial) 2013 report by the Office of Financial Research detailed the ways that large asset managers might pose systemic risk.

Oct 17, 2018

FY2019 National Defense Authorization Act: Selected Military Personnel Issues

Each year, the National Defense Authorization Act (NDAA) provides authorization of appropriations for a range of Department of Defense (DOD) and national security programs and related activities. New or clarified defense policies, organizational reform, and directed reports to Congress are often included. For FY2019, the John S. McCain NDAA (H.R. 5515) contains several high-profile military personnel issues. Some are required annual authorizations, such as end-strengths; some are updates or modifications to existing programs; and some changes in response to problems identified in certain military personnel programs. In this year’s NDAA, Congress authorized end-strengths identical to the Administration’s FY2019 budget proposal, which are slightly higher than in FY2018. The authorized active duty end-strength increased by 1% to 1,338,100. The authorized Selected Reserves end-strength increased by <1% to 824,700. With regards to military pay, a 2.6% increase will take effect in calendar year 2019. Congress considered the increase as requested by the Administration; however, an authorization was not required since 37 U.S.C. §1009 provides for automatic annual increases in basic pay that is indexed to increases in the Employment Cost Index. Congress also directed modifications to several existing programs, including development of criteria for internment at Arlington National Cemetery, as well as a $30 million authorization to expand the cemetery; clarified military health system reform requirements outlined in 10 U.S.C. §1073c and revised the implementation date from October 1, 2018 to September 30, 2021; expanded eligibility for TRICARE beneficiaries to access the Federal Dental and Vision Insurance Program (FEDVIP); extended eligibility for commissary and morale, welfare, and recreation (MWR) privileges to certain veterans and veterans’ caregivers, as well as a $1.26 billion authorization for commissary operations; expanded availability of Military OneSource services, enhanced Transition Assistance Program (TAP) counseling requirements, and broadened educational opportunities for servicemembers desiring professional credentials; and corrected technical calculations for automatic annual adjustments to the Special Survivor Indemnity Allowance. As part of the oversight process, additional provisions were incorporated to address selected congressional items of interest, such as added punitive articles on domestic violence in the Uniform Code of Military Justice and directed clarifying policy, support programs, and further study on services for victims of domestic violence and child abuse; stricter eligibility requirements for enlistees of the Military Accessions Vital to the National Interest (MAVNI) program; standardized processes for reporting and accountability, military justice and investigations, and victim services relating to military sexual assault and sexual harassment; increased transparency in Navy watchstander training programs and standards; and enhanced data-sharing between DOD and states to prevent opioid abuse or misuse.

Oct 16, 2018

Global Trends in Democracy: Background, U.S. Policy, and Issues for Congress

Oct 16, 2018

Central Valley Project: Issues and Legislation

The Central Valley Project (CVP), a federal water project owned and operated by the U.S. Bureau of Reclamation (Reclamation), is one of the world’s largest water supply projects. The CVP covers approximately 400 miles in California, from Redding to Bakersfield, and draws from two large river basins: the Sacramento and the San Joaquin. It is composed of 20 dams and reservoirs and numerous pieces of water storage and conveyance infrastructure. In an average year, the CVP delivers more than 7 million acre-feet of water to support irrigated agriculture, municipalities, and fish and wildlife needs, among other purposes. About 75% of CVP water is used for agricultural irrigation, including 7 of California’s top 10 agricultural counties. The CVP is operated jointly with the State Water Project (SWP), which provides much of its water to municipal users in Southern California. CVP water is delivered to users that have contracts with Reclamation. These contractors receive varying levels of priority for water deliveries based on several factors, including hydrology, water rights, prior agreements with Reclamation, and regulatory requirements. The Sacramento and San Joaquin Rivers’ confluence with the San Francisco Bay (Bay-Delta or Delta) is a hub for CVP water deliveries; many CVP contractors south of the Delta receive water that is “exported” from north of the Delta. Development of the CVP resulted in significant changes to the area’s natural hydrology. However, construction of most CVP facilities predated major federal natural resources and environmental protection laws. Much of the current debate related to the CVP revolves around how to deal with changes to the hydrologic system that were not significantly mitigated for when the project was constructed. Thus, multiple ongoing efforts to protect species and restore habitat have been authorized and are incorporated into project operations. Congress has engaged in CVP issues through oversight and at times legislation, including provisions in the 2016 Water Infrastructure Improvements for the Nation (WIIN Act; P.L. 114-322) that, among other things, authorized changes to operations in an attempt to provide for delivery of more water under certain circumstances. Although some stakeholders are interested in further operational changes to enhance CVP water deliveries, others are focused on the environmental impacts of operations. Various state and federal proposals are currently under consideration and have generated controversy for their potential to affect CVP operations and allocations. In mid-2018, the State of California proposed revisions to its Bay-Delta Water Quality Control Plan. These changes would require that more flows from the San Joaquin and Sacramento Rivers reach the Bay-Delta for water quality and fish and wildlife enhancement (and thus would further restrict water supplies for other users). At the same time, the Trump Administration is exploring options to increase CVP water supplies for users. Efforts to add or supplement CVP storage and conveyance also are being considered. The state is proposing a major new water conveyance project (known as the California WaterFix) that would bypass the Bay-Delta and, under certain conditions, increase exports from north to south for users. Additionally, Reclamation and the state are studying other new, augmented storage projects that aim to increase CVP and SWP water supplies. In the 115th Congress, legislators are considering bills that would aim to further increase CVP water exports compared to current baselines by altering environmental requirements and repealing parts of some existing restoration programs. Congress also is considering more targeted but potentially significant changes, such as appropriations provisions that would provide federal approval and funding for certain water storage projects in California, prohibit federal funding for the Bay-Delta Water Quality Control Plan, and prohibit judicial review of WaterFix and other water supply projects, among other things. Congress also may consider legislation that would extend or amend previously enacted CVP authorities (e.g., WIIN Act authorities that are expiring or have exceeded their appropriations ceiling). This report provides background on the CVP, the process of allocating CVP water supplies, and associated controversies. It also covers major proposals associated with the project’s current and future operation. Finally, it discusses recently enacted authorities and proposed legislation related to the CVP.

Oct 15, 2018

Taiwan: Background and U.S. Relations

Oct 15, 2018

Moldova: An Overview

Oct 15, 2018

Vehicle Fuel Economy and Greenhouse Gas Standards

Oct 11, 2018

Expiration of the 2014 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 is typically reauthorized about every five years. Recent farm bills have been subject to various developments, such as insufficient votes to pass the House floor, presidential vetoes, or—as in the case of 2008 and 2014 farm bills—short-term extensions. The current farm bill (the Agricultural Act of 2014, P.L. 113-79) has many provisions that expire in 2018. The 115th Congress has begun but not finished a new farm bill. An initial House vote on H.R. 2 failed by vote of 198-213, but floor procedures allowed that vote to be reconsidered, and it passed by a second vote of 213-211. The Senate passed its bill as an amendment to H.R. 2 by a vote of 86-11. Conference proceedings officially began on September 5, 2018, but have not yet reached agreement. The timing and consequences of expiration vary by program across the breadth of the farm bill. There are two principal expiration dates: September 30 and December 31. The 2014 farm bill generally expires either at the end of FY2018 (September 30, 2018), or with the 2018 crop year. Crop years vary by commodity, but the first to be affected by a new crop year is dairy, whose 2018 crop year ends on December 31, 2018. The possible consequences of expiration include minimal disruption (if the program is able to be continued via appropriations), ceasing new activity (if its authorization to use mandatory funding expires), or reverting to permanent laws enacted decades ago (for the farm commodity programs). For example An appropriations act or a continuing resolution can continue some farm bill programs even though an authority has expired. Programs using discretionary funding—and programs using appropriated mandatory funding like those in the SNAP account—can continue to operate via appropriations action. Most farm bill programs with mandatory funding (except the Supplemental Nutrition Assistance Program (SNAP), the farm commodity programs, and crop insurance) generally cease new operations when they expire (e.g., the Conservation Reserve Program (CRP), and Market Assistance Program (MAP)). The mandatory farm commodity programs would begin reverting to permanent law beginning with the 2019 crop year, for which dairy is the first to be affected, beginning on January 1, 2019. Crop insurance is an example of a program with mandatory funding that is permanently authorized outside of the farm bill and does not expire. “Permanent law” refers to nonexpiring farm commodity programs that are generally from the 1938 and 1949 farm bills. A temporary suspension of permanent law has been included in all recent farm bills, but reverting to permanent law would occur if the suspension expires. The commodity support provisions of permanent law are commonly viewed as being fundamentally different from current policy—and inconsistent with today’s farming practices, marketing system, and international trade agreements—as well as potentially costly to the federal government. Among the mandatory-funded programs that are usually the focus of the farm bill, there are two subcategories that may affect congressional action—some have baseline beyond FY2018 and some do not have baseline after FY2018. In an expiration, both categories of mandatory programs can face similar disruption when their authorizations expire. But the difference in having or not having a baseline is important if Congress considers an extension to deal with an expiration. Providing funding for those programs without baseline could make extension more difficult if budget offsets are needed to keep an extension budget-neutral.

Oct 11, 2018

Miscellaneous Tariff Bills (MTBs)

Oct 10, 2018

Defense’s 30-Year Aircraft Plan Reveals New Details

Oct 9, 2018

Pakistan’s Economic Crisis

Oct 9, 2018

Federal Communications Commission (FCC) Media Ownership Rules

The Federal Communications Commission (FCC) aims, with its broadcast media ownership rules, to promote localism and competition by restricting the number of media outlets that a single entity may own or control within a geographic market and, in the case of broadcast television stations, nationwide. In addition, the FCC seeks to encourage diversity, including (1) the diversity of viewpoints, as reflected in the availability of media content reflecting a variety of perspectives; (2) diversity of programming, as indicated by a variety of formats and content; (3) outlet diversity, to ensure the presence of multiple independently owned media outlets within a geographic market; and (4) minority and female ownership of broadcast media outlets. Two FCC media ownership rules have proven particularly controversial. Its national media ownership rule prohibits any entity from owning commercial television stations that reach more than 39% of U.S. households nationwide. Its “UHF discount” rule discounts by half the reach of a station broadcasting in the Ultra-High Frequency (UHF) band for the purpose of applying the national media ownership rule. In December 2017, the commission opened a rulemaking proceeding, seeking comments about whether it should modify or repeal the two rules. If the FCC retains the UHF discount, even if it maintains the 39% cap, a single entity could potentially reach 78% of U.S. households through its ownership of broadcast television stations. An important issue with respect to the national ownership cap, which the FCC has not addressed in a rulemaking, is how the agency treats a situation in which a broadcaster manages, operates, or sells advertising for a television station owned by another. In some cases, the FCC has articulated its policy on an ad hoc basis in the context of merger reviews, while in other instances it has effectively consented to such arrangements through its silence. Thus, a single entity could comply with the national ownership cap while still influencing broadcast television stations it does not own, reaching more viewers than permitted under the cap. For example, in reviewing the now-cancelled proposed merger between Sinclair Broadcast Group and Tribune Media Company in 2018, FCC commissioners raised concerns that Sinclair’s proposed sale of Tribune’s Chicago station WGN-TV in order to comply with the national ownership cap could effectively be a “sham” transaction due to Sinclair’s relationships with the proposed buyer. Nevertheless, neither Sinclair’s application nor the FCC’s order for a designated hearing addressed whether Sinclair’s intention to operate four television stations owned by others within the Wilkes-Barre-Scranton-Hazleton, PA, television market might cause it to breach the national ownership cap. In November 2017, acting in response to petitions from broadcast station licensees, the FCC repealed or relaxed several local media ownership rules. The repealed rules limited common ownership of broadcast television and radio stations within the same market, and of television stations and newspapers within the same market. The FCC also relaxed rules limiting common ownership of two top-four television stations (generally, ABC, CBS, FOX, and NBC stations) within the same market. In August 2018, the FCC issued rules governing a new “incubator” program designed to enhance ownership diversity. Parties, including the Prometheus Radio Project, have appealed these orders. The U.S. Court of Appeals for the Third Circuit is scheduled to hear arguments regarding the legal challenges to all of the FCC’s recent broadcast media ownership rule changes. The FCC plans to launch its next quadrennial media ownership review later this year. These regulatory changes are occurring against the background of significant changes in media consumption patterns. Based on surveys conducted by Pew Research Center, the percentage of adults citing local broadcast television as a news source declined from 65% in 1996 to 37% in 2016. As broadcast stations face competition for viewers’ attention from other media outlets, and thereby financial pressures, some station owners have sought to strengthen their positions by consolidating. The extent to which such media consolidation can occur is directly related to the FCC media ownership and attribution rules in place at the time.

Oct 9, 2018

Banking: Current Expected Credit Loss (CECL)

Some observers asserted that leading up to the financial crisis of 2007-2009 banks did not have sufficient credit loss reserves or capital to absorb the resulting losses and as a consequence supported additional government intervention to stabilize the financial system. In its legislative oversight capacity, Congress has devoted attention to strengthening the financial system in an effort to prevent another financial crisis and avoid putting taxpayers at risk. However, some Members of Congress have expressed concern that financial reforms have been unduly burdensome, reducing the availability and affordability of credit. Congress has delegated authority to the bank regulators and the Financial Accounting Standards Board (FASB) to address credit loss reserves. FASB promulgates the U.S. Generally Accepted Accounting Principles (U.S. GAAP), which provides the framework for financial reporting by banks and other entities. Credit loss reserves help mitigate the overstatement of income on loans and other assets by accounting for future losses. Credit losses are often very low shortly after loan origination, subsequently rising in the early years of the loan, and then tapering to a lower rate of credit loss until maturity. Consequently, a firm’s financial statements might not accurately reflect potential credit losses at loan inception. During the seven years leading up to the 2007-2009 financial crisis, the loan values held by the U.S. commercial banking system increased by 85%, whereas the credit loss reserves increased by only 21%. The ratio of loss reserves prior to the financial crisis was as low as 1.16% in 2006 and was more than 3.70% near the end of the crisis in early 2010. In response to banks’ challenges during and after the crisis, in June 2016, FASB promulgated a new credit loss standard—Current Expected Credit Loss (CECL). The new standard is expected to result in greater transparency of expected losses at an earlier date during the life of a loan. Early recognition of expected losses might not only help investors, but might also create a more stable banking system. CECL requires consideration of a broader range of reasonable and supportable information in determining the expected credit loss, including current and future economic conditions. In addition to loans, CECL also applies to a broad range of other financial products. The expected lifetime losses of loans and certain other financial instruments are to be recognized at the time a loan or financial instrument is recorded. All public companies are required to issue financial statements that incorporate CECL for reporting periods beginning after December 15, 2019. Although adherence to CECL is required for all public companies, it is expected to have a more significant effect on the banking industry. The change to credit loss estimates under CECL is considered by some to be the most significant accounting change in the banking industry in 40 years. The banking regulators (Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency) have issued preliminary guidance on CECL implementation. Banking regulators have also proposed changing the Allowance for Loan and Lease Losses (ALLL) to Allowance for Credit Loss (ACL) as a newly defined term. The change to ACL is to reflect the broader range of financial products that will be subject to credit loss estimates under CECL. During congressional hearings, banking industry professionals have raised several concerns about CECL. According to one estimate, the transition to CECL will likely result in an increase in loan loss reserves of between $50 billion and $100 billion for banks. As these projections are in aggregate across the banking industry, some banks might need to significantly increase their credit reserves whereas others might need to adjust less. To mitigate the effect of CECL, regulators have given banks the option of phasing in the increased credit reserves over three years. In addition, the Federal Reserve has delayed stress tests that incorporate CECL for the largest banking organizations until 2021. Banks are expected to incur additional costs of developing new credit loss models and costs of implementation. Banks may need to retain historical information on more financial products to estimate credit losses under CECL. Adopting CECL may require upgrading existing hardware and software or paying higher fees to third-party vendors for such services. Participants in recent congressional hearings have raised concerns about CECL implementation issues. The difference in how credit loss estimates are calculated based on CECL and international accounting standards could potentially disadvantage U.S. banks, but CECL is considered less complex to implement. Fannie Mae and Freddie Mac, the government-sponsored enterprises, are also to be subject to CECL credit loss estimates as they are subject to private-sector GAAP requirements even though they are currently in conservatorship under the Federal Housing Financing Agency.

Oct 9, 2018

Social Media Adoption by Members of Congress: Trends and Congressional Considerations

Communication between Members of Congress and their constituents has changed with the development of online social networking services. Many Members now use email, official websites, blogs, YouTube channels, Twitter, Facebook, and other social media platforms to communicate—technologies that were nonexistent or not widely available just a few decades ago. Social networking services have arguably enhanced the ability of Members of Congress to fulfill their representational duties by providing them with greater opportunities to share information and potentially to gauge constituent preferences in a real-time manner. In addition, electronic communication has reduced the marginal cost of communications. Unlike with postal letters, social media can allow Members to reach large numbers of constituents for a fixed cost. This report examines Member adoption of social media broadly. Because congressional adoption of long-standing social media platforms Facebook, Twitter, and YouTube is nearly ubiquitous, this report focuses on the adoption of other, newer social media platforms. These include Instagram, Flickr, and Google+, which have each been adopted by at least 2.5% of Representatives and Senators. Additionally, Members of Congress have adopted Snapchat, Medium, LinkedIn, Pinterest, Periscope, and Tumblr at lower levels. This report evaluates the adoption rates of various social media platforms and what the adoption of multiple platforms might mean for an office’s social media strategy. Data on congressional adoption of social media were collected by an academic institution in collaboration with the Congressional Research Service during the 2016-2017 academic year. This report provides a snapshot of a dynamic process. As with any new technology, the number of Members using any single social media platform, and the patterns of use, may change rapidly in short periods of time. As a result, the conclusions drawn from these data cannot necessarily be generalized or used to predict future behavior. The data show that, on average, Members of Congress adopt six social media platforms for official communications. Between 87% and 100% of Representatives and 94% and 100% of Senators have adopted the established platforms—Facebook, Twitter, and YouTube—during the 114th Congress (2015-2016) and the 115th Congress (2017-2018). These adoption rates generally match the popularity of these services among the general public. Instagram, Flickr, and Google+ are the most popular of the newer social media platforms. Among Senators, Instagram has been the most adopted platform, with between 36% (2015) and 71% (2018) of Senators having adopted it. For Flickr, between 34% (2017 and 2018) and 45% (2016) of Senators have adopted the service, and for Google+ between 5% (2018) and 19% (2016). For Representatives, Instagram was also the most adopted of the newer platforms, with between 23% (2015) and 52% (2017) of Representatives adopting the service. For Flickr, between 23% (2018) and 43% (2015) of Representatives have accounts, and for Google+ between 2.3% (2018) and 5.2% (2015) have adopted the platform. Additionally, this report discusses the possible implications of the adoption of social media, including managing multiple platforms, the type of content and posting location, the allocation of office resources to social media communications, and archiving social media content.

Oct 9, 2018

Trade Related Agencies: FY2019 Appropriations, Commerce, Justice, Science and Related Agencies (CJS)

On February 12, 2018, the Trump Administration submitted its FY2019 budget request to Congress. The proposal includes a total of $590.8 million for three trade-related agencies— the International Trade Administration (ITA), the U.S. International Trade Commission (USITC), and the office of the United States Trade Representative (USTR). This is 8.9% less than the FY2018 total appropriated amounts for these agencies. The Administration requests reducing funding for all three trade-related agencies. For FY2019, the request includes $440.1 million in direct funding for ITA (an 8.7% decrease from the FY2018 appropriation), $87.6 million for USITC (a 6.5% decrease), and $63.0 million for USTR (a 13.2% decrease). Congressional Actions In the spring of 2018, the House and Senate reported FY2019 Commerce, Justice, Science, and Related Agencies (CJS) appropriations bills, which include proposed funding for ITA, USITC, and USTR. The reported bills do not adopt many of the Administration’s budget reductions, and instead propose funding levels that are more similar to the FY2018-enacted amounts. The House Committee on Appropriations reported H.R. 5952 on May 17, 2018. The House proposal recommends a total of $647.6 million for the three CJS trade-related agencies. This proposal is $56.8 million more (9.6%) than the Administration’s request, and $0.7 million less (-0.1%) than the FY2018 enacted legislation. The House committee proposes $480.0 million in direct funding for ITA, $95.0 million for USTIC, and a total of $72.6 million for USTR, comprised of $57.6 million for salaries and expenses and an additional $15 million from the Trade Enforcement Trust Fund. The Senate Committee on Appropriations reported S. 3072 on June 14, 2018. The Senate committee-reported proposal recommends a total of $655.6 million for the three CJS trade-related agencies. This is $64.8 million (11.0%) more than the Administration’s request, and $7.3 million (1.1%) more than the FY2018 enacted appropriations. The Senate committee proposes $488.0 million in direct funding for ITA, $95 million for USITC, and a total of $72.6 million for USTR, comprised of $57.6 million for salaries and expenses and an additional $15 million from the Trade Enforcement Trust Fund. On September 28, 2018, the President signed into law the Continuing Appropriations Act, 2019 (CR) (P.L. 115-245, Division C). The CR provisions continue funding for these agencies (among others) at a prorated 2018 funding level through December 7, 2018.

Oct 5, 2018

Do Courts Have Inherent Authority to Release Secret Grand Jury Materials?

Oct 5, 2018

The Patient Protection and Affordable Care Act’s (ACA’s) Risk Adjustment Program: Frequently Asked Questions

The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) created a permanent risk adjustment program that aims to reduce incentives that insurers may have to avoid enrolling individuals at risk of high health care costs in the private health insurance market. Section 1343 of the ACA established the program, which is designed to assess charges to health plans that have relatively healthier enrollees compared with other health plans in a given state. The program uses collected charges to make payments to other plans in the same state that have relatively sicker enrollees. The Centers for Medicare & Medicaid Services (CMS) administers the risk adjustment program as a budget-neutral program, so that payments made are equal to the charges assessed in each state. CMS assesses payments and charges on an annual basis, beginning in the 2014 benefit year. The concept of risk (i.e., the likelihood and magnitude of experiencing financial loss) is at the root of any insurance arrangement. One of the ways that insurers are exposed to risk is that individuals have more information about their own health status than an insurer does. Individuals who expect or plan for high use of health services (e.g., older or sicker individuals) are more likely to seek out coverage and enroll in plans with more benefits than individuals who do not expect to use many or any health services (e.g., younger or healthier individuals). Prior to the ACA, most state laws (and federal law under limited circumstances) allowed insurers to minimize their exposure to this risk by charging higher or lower premiums to potential enrollees based on factors such as age, gender, and health status. However, under current federal law, insurers in the individual and small-group markets are unable to set premiums based on gender or health status and are limited in how much they may vary premiums by age. Without being permitted to account for the risk from individuals who expect or plan for high use of health services using the aforementioned criteria, insurers still may attempt to avoid such individuals enrolling by using networks, formularies, and other techniques that are not likely to appeal to them, though insurers are limited by other ACA requirements (e.g., they are required to offer certain benefits). The ACA established the permanent risk adjustment program to try to eliminate incentives insurers may have to avoid enrolling high-risk individuals. This program, along with the transitional reinsurance program and the temporary risk corridors programs, is intended to encourage insurers to participate in the marketplace by moderating the risk and uncertainty that may reduce their likelihood to participate. Under the risk adjustment program, insurers place enrollee and claims data for a benefit year on a computer server that they own but that runs CMS software. CMS’s software calculates a risk score for an enrollee using that enrollee’s demographic and diagnosis information and obtains summary data for each plan. CMS uses the risk scores for a plan’s enrollees to calculate the difference between the plan’s predicted costs for its enrollees relative to the predicted state average cost, given the health status of the plan’s enrollees and the estimated premium revenue that the plan would be able to collect based on allowable rating factors, relative to the estimated state average. This difference is then multiplied by the state average premium and results in either a risk adjustment payment or charge for a given plan. This report provides responses to some frequently asked questions (FAQs) about the ACA risk adjustment program. The report begins with background on the health insurance market, discusses why risk mitigation matters, and introduces the role of risk adjustment in risk mitigation. The next section describes the mechanics of the program, including how enrollee risk scores are determined and how they are used to calculate payments and charges. The report concludes with questions regarding the program’s experience thus far and future changes to the program.

Oct 4, 2018

Risk Adjustment in the Private Health Insurance Market

Oct 3, 2018

The Trump Administration’s “Free and Open Indo-Pacific”: Issues for Congress

The Trump Administration has outlined a goal of promoting a Free and Open Indo-Pacific (FOIP), seeking to articulate U.S. strategy towards an expanded Indo-Asia-Pacific region at a time when China’s presence across the region is growing. The FOIP initiative is identified through a number of statements by the President and senior Administration officials. Insight into the initiative’s context and perspective is also offered by the Administration’s National Security Strategy and the National Defense Strategy. The FOIP concept represents a significant change in U.S. strategic thinking towards the region because of its explicit linkage of South Asia and the Indian Ocean region with the Asia-Pacific region. The FOIP also emphasizes maritime issues. While recent statements by Secretary of State Mike Pompeo have provided a more detailed understanding of the strategy, uncertainty remains over the specifics of the initiative. Some critics of the initiative wonder if the United States has the vision, political will, or economic resources necessary to implement a FOIP strategy effectively. Some observers have pointed to inconsistencies with other Trump Administration initiatives toward the region, and to the lack of detail necessary to operationalize the concept. Some also argue that the economic aspects of the initiative are relatively small when compared to either China’s lending, including under its Belt and Road Initiative, or the region’s infrastructure investment needs. Another often-expressed concern is that the FOIP’s initial emphasis on the “Quad” with Australia, India, and Japan raises concerns that it risks eroding U.S. influence in Southeast Asia by not sufficiently incorporating that sub-region’s leading international body, the Association of Southeast Asian Nations, into U.S. strategy toward the region. Regional perceptions of the United States’ commitment to the region were shaken by the Trump Administration’s decision to withdraw from the proposed Trans-Pacific Partnership trade agreement in 2017. This decision also led to perceptions that the United States lacked an integrated regional strategy despite the region’s economic importance to the United States. According to the State Department, two-way trade between the United States and the Indo-Pacific is $1.4 trillion and U.S foreign direct investment in the region is $860 billion a year. The FOIP initiative may raise questions for Congress related to its oversight and appropriations roles: Does the initiative fully account for the strategic and economic environment in the Indo-Pacific, including implications related to but going beyond the rise of China and its Belt and Road Initiative? Does the initiative correctly identify and adequately secure U.S. interests in the Indo-Pacific region? Does it place proper emphasis on developing diplomatic approaches and economic institutions as well as military responses when crafting a strategic vision for the region? Are U.S. Indo-Pacific military forces properly deployed to secure U.S. interests? Is future defense procurement adequately funded to secure U.S. interests? Is the value to the United States of working with friends and allies in the region properly understood and are these alliance and defense relationships being properly managed in order to leverage U.S. strategic posture in the region? Are American values properly taken into account in developing a FOIP strategy?

Oct 3, 2018

Consumer Credit Markets and Loan Pricing: The Basics

Oct 3, 2018

Macedonia: Uncertainty after Referendum on Country’s Name

A September 30, 2018, referendum on changing Macedonia’s name to the Republic of North Macedonia produced mixed results and rival interpretations from the government and opposition. Despite voter turnout (37%) being lower than many expected, nearly 92% of those who voted approved changing the country’s name to resolve a long-standing dispute with Greece and facilitate Macedonia’s eventual membership in NATO and the European Union (EU). Based on this relatively high margin of victory, the government quickly claimed that the nonbinding referendum result was a clear mandate to proceed with a parliamentary vote on required constitutional changes. Yet opponents of the name change, who generally boycotted the referendum, also viewed the result as a win because voter turnout was below the 50% necessary for the referendum results to be considered valid. With both sides claiming victory, it is unclear whether the government of Zoran Zaev can secure the two-thirds majority of parliamentary votes needed to amend the constitution to allow the name change. If it does not, Macedonia’s path to NATO and EU membership could remain blocked, and some analysts suggest it could be years before conditions are conducive to another Greek-Macedonian agreement on the name issue. Recent Breakthrough in Name Dispute For nearly three decades, Greece has wielded its veto power to block Macedonia’s NATO and EU membership despite generally positive assessments of Macedonia’s qualifications. The bilateral dispute dates back to 1991, when Macedonia declared independence from the former Yugoslavia as the Republic of Macedonia. From Greece’s perspective, Macedonia’s use of the name implies territorial ambitions toward northern Greece reflecting its claim to the cultural heritage of ancient Macedonia. Greece continues to refer to the country as the Former Yugoslav Republic of Macedonia. In 2017, Macedonia’s new Social Democrat-led government prioritized renewed efforts toward Euro-Atlantic integration. The presence of new leaders at the bargaining table, along with EU and NATO support and positive signals from Athens, provided an opportunity to compromise over the name issue. In June, the foreign ministers of Greece and Macedonia signed the Prespa Agreement, whereby Macedonia would change its name to the Republic of North Macedonia, Greece would no longer object to Macedonia’s Euro-Atlantic integration, and both countries would promise to respect existing borders. Nationalist protests broke out in both countries over the agreement. Prior to the referendum, key officials from Macedonia’s opposition VMRO DPMNE party, including President Gjorge Ivanov and party leader Hristijan Mickoski, accused the government of betraying Macedonia. Ivanov called on the party’s supporters to boycott the referendum. Next Steps For the Prespa Agreement to enter into force, Macedonia’s parliament must make constitutional changes that adopt key provisions—including the name change—by the end of 2018. Although the referendum is not binding, the Macedonian government hoped that strong turnout would pressure opposition members of parliament to endorse the necessary changes. Prime Minister Zaev has vowed to move the process forward in parliament. The government believes it has approximately 71 of the 80 votes (out of 120) necessary, but the referendum’s relatively low turnout makes it harder for the government to secure nine opposition votes. VMRO DPMNE leader Mickoski declared that the deal with Greece is “dead.” Some analysts believe the party is loath to give a political victory to the Zaev government and instead hopes to author a more palatable agreement with Greece down the road, even though it could be years before this is feasible. VMRO DPMNE lists NATO and EU membership as strategic priorities, and a strong majority of Macedonia’s population supports these goals. Some analysts believe the party is sensitive to its international reputation and could yield to pressure from other conservative parties, particularly the parties of key “yes” campaign proponents such as German Chancellor Angela Merkel and Austrian Chancellor Sebastian Kurz. Prime Minister Zaev put additional pressure on the VMRO DPMNE by threatening to hold snap elections if the constitutional changes fail to pass. If governing parties gain additional seats, the changes could pass without the opposition’s support. Some observers view early elections as the more likely scenario. If parliament approves the constitutional changes, the next step would be ratification by Greece’s parliament. The issue is also contentious in Greece, where nationalist protests and accusations of betrayal have mirrored the situation in Macedonia. Prime Minister Alexis Tsipras faces opposition to the deal from his government’s junior coalition partner, the Independent Greeks, as well as from the conservative opposition. Nevertheless, Tsipras survived a no-confidence vote over the agreement in June. U.S. Support for Macedonia’s Euro-Atlantic Integration U.S. Administrations and many Members of Congress have long supported Macedonia’s Euro-Atlantic integration and backed its compromise with Greece to resolve the name dispute. A U.S. diplomat has been the key U.N. negotiator for over two decades. The State Department praised the support from Macedonian voters in the September 30 referendum and urged politicians to rise above the partisan fray by finalizing the Prespa Agreement. NATO leaders have said that membership consultations with Macedonia could be finalized once the Prespa Agreement is fully implemented. Macedonia then could become NATO’s 30th member, pending final ratification by member states, including by the U.S. Senate. During past NATO enlargements, the ratification process typically has taken from six months to one year. U.S. officials and many Members of Congress believe that Macedonia’s NATO and EU membership would be a source of stability in the Western Balkans and would help ward off the violence and interethnic tensions that have flared periodically in Macedonia. Some analysts speculate that the Prespa Agreement could set a powerful example of compromise for parties to other seemingly intractable disputes in the Balkans, such as Serbia and Kosovo. Proponents of Macedonia’s Euro-Atlantic integration also have stressed the importance of countering Russia’s increased presence in Macedonia, which presence includes a heightened Russian media footprint, a proliferation of Russia-Macedonia friendship organizations, and cooperation between Vladimir Putin’s United Russia party and the United Macedonia Party. Some analysts believe that Russia, which opposes Macedonia’s potential NATO membership, may have supported the boycott campaign that dampened referendum turnout.

Oct 3, 2018

Argentina’s Economic Crisis and Default

Oct 2, 2018

Designing Congressional Commissions: Background and Considerations for Congress

Congressional advisory commissions are temporary entities established by Congress to provide advice, make recommendations for changes in public policy, study or investigate a particular problem or event, or perform a specific duty. Generally, commissions may hold hearings, conduct research, analyze data, investigate policy areas, and/or make field visits as they perform their duties. Most complete their work by delivering their findings, recommendations, or advice in the form of a written report to Congress. For example, the National Commission on Terrorist Attacks Upon the United States was created to “examine and report upon the facts and causes relating to the terrorist attacks of September 11, 2001,” and to “investigate and report to the President and Congress on its findings, conclusions, and recommendations for corrective measures that can be taken to prevent acts of terrorism,” among other duties. The commission ultimately submitted a final report to Congress and the President containing its findings and conclusions, along with 48 policy recommendations. Advisory commission legislation generally has specific features that provide the commission with the authorities and resources necessary to complete its mission. Using a dataset of statutorily authorized congressional commissions from the 101st Congress (1989-1990) to the 115th Congress (2017-2018), this report focuses on the legislative language used to establish congressional commissions. Policymakers face a number of choices when designing a commission. Statutes establishing congressional commissions commonly provide a series of deadlines that outline the commission’s statutory lifecycle, including deadlines for appointment of commissioners, the commission’s initial meeting, the submission of a final report and any interim reports, and the commission’s termination. Additionally, commission statutes frequently include sections that establish the commission and state its mandate; provide a membership structure and authority for making appointments; outline the commission’s duties; grant the commission certain powers; define any rules of procedure; address hiring of commission staff; and prescribe how the commission will be funded. A variety of options are available for each of these decisions. This report discusses the above-listed topics, along with subissues relevant to each. Legislators can tailor the composition, organization, and working arrangements of a commission based on particular congressional goals; this report provides illustrative examples of statutory language for these topics, discusses potential alternative approaches, and analyzes possible advantages or disadvantages of different choices in commission design. This report focuses on congressional commissions created by statute and does not address entities created by the President or other nonstatutory advisory bodies.

Oct 2, 2018

Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress

The U.S. Army Corps of Engineers (USACE) is an agency within the Department of Defense with both military and civil works responsibilities. The agency’s civil works activities consist largely of the planning, construction, and operation of water resource projects to maintain navigable channels, reduce flood and storm damage, and restore aquatic ecosystems. Congress directs USACE’s civil works activities through authorization legislation, annual and supplemental appropriations, and oversight. For Congress, the issue is not only the level of USACE appropriations but also how efficiently the agency is delivering flood control, navigation, and ecosystem restoration projects. These projects can have significant local as well as national economic and environmental benefits. Annual and Supplemental Appropriations USACE discretionary appropriations, which typically are provided through annual Energy and Water Development appropriations acts, have ranged from $4.7 billion to $7.0 billion during the decade from FY2009 to FY2019 and have been increasing since FY2013. In recent years, Congress has directed that more than 50% of the enacted appropriations be used for operation and maintenance of USACE’s aging infrastructure. USACE also has a prominent role in responding to natural disasters, especially floods, in U.S. states and territories. Congress increasingly is using supplemental appropriations not only to perform emergency response and repair for damaged flood control works and USACE projects but also to study and construct new projects that reduce flood risks in areas recently affected by hurricanes and floods. From FY2005 through FY2018, Congress enacted 13 supplemental bills related to flooding and natural disasters, providing a total of almost $45 billion to USACE; for the same period, annual discretionary appropriations for USACE’s flood-related projects and activities totaled $23 billion. Supplemental appropriations bills often alter or waive various requirements for USACE activities, such as cost shares and project cost limitations, and establish project selection and reporting requirements that differ from requirements for USACE activities funded through annual discretionary appropriations. Issues for Congress Issues for Congress include the significant role of supplemental appropriations in advancing studies and construction of flood control projects since FY2005 and the agency’s backlog of authorized but unconstructed projects. The agency has reported a $96 billion backlog of authorized construction projects; for context, annual appropriations for the USACE Construction account (which funds most USACE construction projects) in FY2018 and FY2019 are $2.1 billion and $2.2 billion, respectively. Congress also has limited the number of new studies and construction projects initiated with annual discretionary appropriations (e.g., a limit of five new construction starts using FY2019 appropriations). Given that only a few construction projects typically are started each fiscal year, numerous projects authorized for construction by previous Congresses remain unfunded. USACE may fund some of the authorized flood control projects in its backlog with the more than $17 billion in emergency supplemental appropriations provided to USACE accounts in the Bipartisan Budget Act of 2018 (BBA; P.L. 115-123). Although no numerical limits on starting new studies or construction projects are associated with these funds, the study and construction funds have some geographic limitations that tie their use to areas affected by flooding by the hurricanes in 2017 or by more than one flood in calendar years 2014 through 2017. As a result of this limitation, seventeen states (including North Carolina, which was affected by Hurricane Matthew in 2016 and Hurricane Florence in 2018) did not qualify for USACE supplemental construction appropriations provided through the BBA 2018. Related policy questions for Congress and other decisionmakers include the following: How have the roles of Congress and the Administration shifted vis-à-vis USACE and its appropriations, and does that shift affect the type of information and engagement that Congress may pursue in the future regarding USACE’s use of appropriations? How do trends in annual and supplemental appropriations amounts, processes, and requirements influence the effective, efficient, and accountable use of federal funding provided to USACE? What do these trends portend for USACE’s long-term planning, budgeting, and duties?

Oct 1, 2018