CRS Reports

The Reclamation Fund

Jan 8, 2015

Terrorism Risk Insurance Legislation in the 114th Congress: Issue Summary and Side-by- Side Analysis

This report briefly outlines the issues involved with terrorism insurance, summarizes extension legislation, and includes a side-by-side comparison of the Terrorism Risk Insurance Act of 2002 (TRIA) and the bills introduced in the 114th and 113th Congresses.

Jan 7, 2015

The Temporary Assistance for Needy Families (TANF) Block Grant

Jan 6, 2015

Medicaid’s Federal Medical Assistance Percentage (FMAP), FY2016

Jan 5, 2015

Federal Income Taxes and Noncitizens: Frequently Asked Questions

This report answers frequently asked questions about noncitizens and federal income taxes. Noncitizens may be subject to U.S. income taxes when, for example, they work in the United States or they live abroad but have U.S. source income. Noncitizens who may be subject to U.S. income taxes include legal permanent residents (LPRs or green card holders) who are authorized to live and work in the United States permanently; aliens who are authorized to stay in the United States temporarily, and may or may not be authorized to work; aliens who are not authorized to be in the United States (called unlawfully present aliens for purposes of this report); and foreigners who are outside the United States but have U.S. tax obligations. This report groups similar questions by category: questions concerning residency status for purposes of the Internal Revenue Code (IRC); questions related to individual taxpayer identification numbers (ITINs), which are ID numbers issued to noncitizens for tax-filing purposes; and questions regarding unlawfully present aliens and federal income taxes. The report also refutes a persistent rumor that there are special tax benefits for aliens starting businesses in the United States. The report focuses on federal income taxes. Other taxes, such as payroll taxes, excise taxes, and estate and gift taxes, are outside the scope of this report. For information on aliens and the federal estate and gift taxes, see CRS Report R43576, Estate and Gift Taxes for Nonresident Aliens, by Emily M. Lanza.

Dec 31, 2014

Introduction to Financial Services: Banking

Dec 31, 2014

The ACA Medicaid Expansion

Historically, Medicaid eligibility has generally been limited to certain low-income children, pregnant women, parents of dependent children, the elderly, and individuals with disabilities; however, as of January 1, 2014, states have the option to extend Medicaid coverage to most non-elderly, low-income individuals. The Patient Protection and Affordable Care Act (ACA; P.L. 111-148 as amended) established 133% of the federal poverty level (FPL) (effectively 138% of FPL with an income disregard of 5% of FPL) as the new mandatory minimum Medicaid income eligibility level for most non-elderly individuals. On June 28, 2012, the U.S. Supreme Court issued its decision in National Federation of Independent Business v. Sebelius, finding that the enforcement mechanism for the ACA Medicaid expansion violated the Constitution, which effectively made the ACA Medicaid expansion optional for states. If a state accepts the ACA Medicaid expansion funds, it must abide by the expansion coverage rules. For instance, modified adjusted gross income (MAGI) counting rules are used for determining eligibility for the ACA Medicaid expansion population, and individuals covered under the ACA Medicaid expansion are required to receive alternative benefit plan (ABP) coverage. The ACA provides different federal Medicaid matching rates for the individuals who receive Medicaid coverage through the ACA Medicaid expansion. The federal government’s share of most Medicaid expenditures is determined according to the federal medical assistance percentage (FMAP) rate, but exceptions to the regular FMAP rate have been made for certain states, situations, populations, providers, and services. The ACA adds a few FMAP exceptions for the ACA Medicaid expansion: the “newly eligible” FMAP rate, the “expansion state” FMAP rate, and the additional FMAP increase for certain expansion states. Due to these ACA FMAP rates, the federal government pays for a vast majority of the cost of the ACA Medicaid expansion. On January 1, 2014, when the ACA Medicaid expansion went into effect, 24 states and the District of Columbia had included the ACA Medicaid expansion as part of their Medicaid programs. Michigan and New Hampshire implemented the expansion on April 1, 2014, and July 1, 2014 (respectively). Pennsylvania recently received approval to implement the ACA Medicaid expansion beginning on January 1, 2015. Most states implementing the ACA Medicaid expansion will do so through an expansion of their current Medicaid program. However, some states are implementing the expansion through an alternative method, such as the “private option” (i.e., premium assistance to purchase health insurance through the health insurance exchanges under the ACA) and health savings accounts. State decisions not to implement the ACA Medicaid expansion could have implications for low-income individuals, large employers with low-wage workers, and hospitals. For example, most uninsured individuals with incomes under 100% of FPL will likely remain uninsured, and large employers with low-wage workers might have greater exposure to employer penalties included in the ACA. Also, Medicaid disproportionate share hospital (DSH) allotments will be reduced by the same across the nation whether or not states implement the expansion.

Dec 30, 2014

State Sponsors of Acts of International Terrorism--Legislative Parameters: In Brief

This brief report provides information on legislation that authorizes the designation of any foreign government as a state sponsor of acts of international terrorism. It addresses the statutes and how they each define acts of international terrorism; establish a list to limit or prohibit aid or trade; provide for systematic removal of a foreign government from a list, including timeline and reporting requirements; authorize the President to waive restrictions on a listed foreign government; and provide (or do not provide) Congress with a means to block a delisting. It closes with a summary of delisting in the past.

Dec 24, 2014

Export-Import Bank (Ex-Im Bank) Reauthorization

Dec 23, 2014

Introduction to Financial Services: The Securities and Exchange Commission (SEC)

Dec 22, 2014

Introduction to Financial Services: The Consumer Financial Protection Bureau (CFPB)

Dec 19, 2014

The Global Health Security Agenda (2014-2019) and International Health Regulations (2005)

Dec 19, 2014

An Overview of Accreditation of Higher Education in the United States

Dec 12, 2014

Cash Versus Accrual Basis of Accounting: An Introduction

This report introduces two general methods of accounting—the cash basis method and accrual basis method. The choice of accounting method determines the timing of the recognition of revenue and expenses. Under cash basis accounting, revenue and expenses are recorded when cash is actually paid or received. Under accrual basis accounting, revenue is recorded when it is earned and expenses are reported when they are incurred. Understanding the differences between these two accounting methods could be helpful to Congress as it considers reforming the tax system and changing the federal government’s financial reporting requirements. Currently with certain exceptions, the Internal Revenue Code (IRC) requires some companies with gross receipts in excess of $5 million to use accrual basis, instead of cash basis, of accounting to determine their tax liabilities. The IRC’s requirement to use the accrual method, arguably, ensures that revenue and the expenses incurred to generate that revenue are realized in the same year. Types of companies that may be excepted from using accrual basis of accounting for income taxes are sole proprietors and certain qualified personal service corporations (PSCs) in such fields as health, law, engineering, accounting, performing arts, and consulting firms, as well as farms that are not corporations or do not have a corporate partner. Some Members of Congress have put forth proposals to revise the circumstances under which certain companies are able to use cash method. House Ways and Means Committee Chairman Dave Camp introduced H.R. 1, the Tax Reform Act of 2014, on December 10, 2014. Among the changes proposed in the bill is the requirement that some partnerships, S corporations, and PSCs use the accrual method instead of the cash method to determine their federal taxable liability. Specifically, these business types would be required to use the accrual method if their average annual gross receipts exceeded $10 million. Former Senate Committee on Finance Chairman Max Baucus included a similar provision in his Cost Recovery and Accounting staff discussion draft, which has not been formally introduced as legislation. The Small Business Accounting and Tax Simplification Act (H.R. 947), Start-up Jobs and Innovation Act (S. 1658), and Small Business Tax Certainty and Growth Act (S. 1085), introduced in the 113th Congress, would raise the gross receipt test limit from $5 million to $10 million. The President’s budget is prepared primarily using cash basis. The Financial Report of the United States Government is prepared using both accrual and modified cash basis. For the past 17 years, the Government Accountability Office (GAO) has issued a disclaimer of opinion on the Financial Report of the United States Government. One of the reasons stated by GAO for the disclaimer of opinion for the 2013 financial report was that the federal government’s process for preparing the consolidated financial statements was ineffective to determine whether the financial reports were presented fairly in accordance with U.S. Generally Accepted Accounting Principles (GAAP). A number of congressional proposals would change how the U.S. government’s financial reports are prepared. In the 113th Congress, the GAAP Act (H.R. 476) and H.Res. 545 would require the federal government’s budget, financial reports, and performance evaluation reports to be prepared using both cash and accrual method. This report introduces the difference between cash and accrual methods by providing an overview of concepts and theories that underlie these accounting methods. It then explores these concepts through the business cycle of a fictitious small business and how the basis of accounting would affect the financial condition of the business.

Dec 12, 2014

Federal Inspectors General: History, Characteristics, and Recent Congressional Actions

Federal inspectors general (IGs) are authorized to combat waste, fraud, and abuse within their affiliated federal entities. To execute their missions, offices of inspector general (OIGs) conduct and publish audits and investigations—among other duties. Two major enactments—the Inspector General Act of 1978 and its amendments of 1988 (codified at 5 U.S.C. Appendix)—established federal IGs as permanent, nonpartisan, and independent offices in more than 70 federal agencies. OIGs serve to assist Congress in overseeing executive branch—and a few legislative branch—agencies. They provide recommendations and findings to their affiliated agency head and to Congress that may save the government millions of dollars per year. As a result, Congress may have an interest in ensuring that federal OIGs have the appropriate authorities and access to information they need to perform their investigations, audits, and evaluations. Concurrently, Congress has a responsibility to protect some records and information, such as national security information or information about an ongoing criminal investigation, from improper release. This report provides background on the statutory creation of federal OIGs and provides historical context for contemporary debates about the strengths and limitations of the offices. Congress has a number of tools at its disposal to enhance OIG oversight, including through the introduction or passage of legislation, through formal letters to and from overseers, and through oversight hearings. Recent legislative initiatives have enhanced OIG oversight by creating new IGs (H.R. 302 and H.R. 3770, 113th Congress), expanding the authority of existing ones (P.L. 113-6, H.R. 314, 113th Congress), or increasing IGs’ reporting requirements to Congress (H.R. 1211, 113th Congress; H.R. 658, 112th Congress) In August 2014, 47 federal IGs wrote a letter to leadership of the Senate Committee on Homeland Security and Governmental Affairs and the House Committee on Oversight and Government Reform indicating difficulties in acquiring records or other information from the agencies with which they are affiliated. The letter stated that certain agencies’ unwillingness to provide requested information represents “potentially serious challenges to the authority of every Inspector General and our ability to conduct our work thoroughly, independently, and in a timely manner.” The IGs asked Congress to provide “a strong, generally applicable reaffirmation” of Congress’s intentions in the IG Act to require agencies to provide federal OIGs with access to all requested records and information. In September 2014, the House Committee on Oversight and Government Reform held a hearing at which the IGs from the allegedly unresponsive agencies testified, detailing difficulties in obtaining agency information. All Members at the hearing expressed concerns about the IGs’ inability to access requested information. Strengthening government oversight through IGs and ensuring proper access to agency records, among other issues, will likely continue to be of interest to Congress in the future.

Dec 8, 2014

Federal Lands and Natural Resources: Overview and Selected Issues for the 113th Congress

This report introduces some of the broad themes and issues Congress considers when addressing federal land policy and resource management. Federal land policy includes questions about the extent and location of the federal estate.

Dec 8, 2014

2014 Farm Bill Provisions and WTO Compliance

Dec 8, 2014

Trade Remedies: Antidumping and Countervailing Duties

Dec 5, 2014

Preventing the Introduction and Spread of Ebola in the United States: Frequently Asked Questions

Throughout 2014, an outbreak of Ebola virus disease (EVD) has outpaced the efforts of health workers trying to contain it in three West African countries: Guinea, Liberia, and Sierra Leone. (These are often referred to as “affected countries” or “countries with widespread transmission.” In mid-November, 2014, Ebola transmission also occurred for the second time in neighboring Mali. The extent of spread in Mali remains to be seen.) EVD cases have been imported to other countries, including the United States, where two nurses were infected while caring for a patient who had traveled from Liberia. Members of Congress and the public have considered ways to prevent the entry and spread of EVD in the United States. Official recommendations have seemed to conflict at times. In part this reflects the evolution of our understanding of this new threat and the scientific and technical aspects of its control. In addition, under the nation’s federalist governance structure, the federal and state governments are empowered to take measures to control communicable diseases, and have addressed some aspects of the Ebola threat in varied ways. In the United States and abroad, public concern about the spread of Ebola also may have shaped policymakers’ decisions as well. This CRS report answers common legal and policy questions about the potential introduction and spread of EVD in the United States. Questions and answers are presented in the following topical order: Barring travelers from Ebola-stricken countries from coming to the United States: Immigration law and policy provide options to prevent the entry into the United States of foreign nationals who could spread communicable diseases. U.S. citizens are generally afforded the right to repatriate. Exit procedures upon departure from affected countries in Africa: The U.S. Centers for Disease Control and Prevention (CDC) and U.S. Agency for International Development (USAID) have aided affected countries in West Africa in screening departing travelers to minimize the exportation of EVD to other countries. U.S. laws and procedures involving airlines and other conveyances: Several laws address the role of commercial carriers in preventing or detecting the spread of communicable diseases on their planes or vessels. Implementation of these laws involves a balance of public health and commercial considerations. Identification and screening of passengers arriving from Ebola-affected countries: The United States has routed most travelers originating from affected areas of West Africa to one of five U.S. airports, at which the travelers can be interviewed and examined to determine their risk of exposure to EVD, and referred for further monitoring. Domestic quarantine and isolation: legal authority and policies: Both the federal and state governments have authority to restrict the movement of persons who may pose a threat to others by transmitting disease. Public health officials at each level of government are involved in identifying and monitoring persons at risk of developing EVD, and developing protocols to assure that persons who develop symptoms are promptly isolated.

Dec 5, 2014

The Earned Income Tax Credit (EITC): An Overview

The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers earning relatively low wages. This report provides an overview of the EITC, first discussing eligibility requirements for the credit, followed by how the credit is computed and paid. The report then provides data on the growth of the EITC since it was first enacted in 1975. Finally the report concludes with data on the EITC claimed on 2012 tax returns, examining EITC claims by number of qualifying children, income level, tax filing status, and location of residence.

Dec 3, 2014

Federal Regulations and the Rulemaking Process

This report provides an overview of the federal regulations and the rulemaking process and the role of the President in rulemaking.

Nov 26, 2014

Congress Faces Calls to Address Expiring ACA Appropriations

This report discusses the Affordable Care Act (ACA), enacted in March 2010, which appropriated billions of dollars of mandatory funds to support grant programs and other activities authorized by the law.

Nov 25, 2014

FEMA’s Disaster Declaration Process: A Primer

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (referred to as the Stafford Act—42 U.S.C. 5721 et seq.) authorizes the President to issue “major disaster” or “emergency” declarations before or after catastrophes occur. Emergency declarations trigger aid that protects property, public health, and safety and lessens or averts the threat of an incident becoming a catastrophic event. Given their purpose, the emergency declarations may precede an event. A major disaster declaration is generally issued after catastrophes occur, and constitutes broader authority for federal agencies to provide supplemental assistance to help state and local governments, families and individuals, and certain nonprofit organizations recover from the incident. The end result of a presidential disaster declaration is well known, if not entirely understood. Various forms of assistance are provided, including aid to families and individuals for uninsured needs; and assistance to state and local governments, and to certain non-profits for rebuilding or replacing damaged infrastructure. Over the last quarter century, the amount of federal assistance provided through presidential disaster declarations has exceeded $150 billion. Often, in recent years, Congress has enacted supplemental appropriations legislation to cover unanticipated costs. While the amounts spent by the federal government on different programs may be reported, and the progress of the recovery can be observed, much less is known about the process that initiates all of this activity. Yet, it is a process that has resulted in an average of more than one disaster declaration a week over the last decade. The disaster declaration procedure is foremost a process that preserves the discretion of the governor or tribal leader to request assistance and the President to decide to grant, or not to grant, supplemental help. The process employs some measurable criteria for evaluating disaster damage in two broad areas: Individual Assistance that aids families and individuals and Public Assistance that is mainly for emergency work such as debris removal and permanent repairs to infrastructure. The criteria, however, also consider many other factors, in each category of assistance, that help decision makers assess the impact of an event on communities and states. Under current law while a governor or a tribal leader may make a request, the decision to issue a declaration rests solely with the President. Congress has no formal role, but has taken actions to adjust the terms of the process. For example, the Post-Katrina Emergency Management Reform Act of 2006, P.L. 109-295, established an advocate to help small states with the declaration process. More recently, Congress passed the Hurricane Sandy Recovery Improvement Act, P.L. 113-2, which had two potentially major impacts on the declaration process. First, the act authorized Native American tribal groups to directly request disaster assistance from the President rather than only requesting through a state governor. The second potential major impact in the act was that FEMA was directed to update its criteria for considering whether to make a recommendation to the President for Individual Assistance declarations. Since the decision for a declaration is at the discretion of the President, there has been some speculation regarding the influence of political favor in these decisions. Some have posited various connections between the political party of the governor requesting or the prominence of some state’s congressional delegation on committee’s important to FEMA. While of interest, those theories are usually not connected to, or at least fail to consider, the natural events that were the impetus for both the request and the decision. Given the importance of the decision, and the size of the overall spending involved, hearings have been held to review the declaration process so as to ensure fairness and equity in the process and its results. Congress continues to examine the process and several pieces of legislation have been introduced during the 113th Congress to adjust the factors considered for a major disaster declaration. This report discusses the evolution of this process, how it is administered and recent changes enacted in law as well as amending legislation that has been introduced. This report will be updated as warranted by events.

Nov 12, 2014

U.S. Dairy Programs After the 2014 Farm Bill (P.L. 113-79)

Oct 30, 2014

Aiding, Abetting, and the Like: An Abbreviated Overview of 18 U.S.C. 2

Virtually every federal criminal statute has a hidden feature; primary offenders and even their most casual accomplices face equal punishment. This results from 18 U.S.C. 2, which visits the same consequences on anyone who orders or assists in the commission of a federal crime. Aiding and abetting means assisting in the commission of someone else’s crime. Section 2(a) demands that the defendant embrace the crime of another and consciously do something to contribute to its success. An accomplice must know the offense is afoot if he is to intentionally contribute to its success. While a completed offense is a prerequisite to conviction for aiding and abetting, the hands-on offender need be neither named nor convicted. On occasion, an accomplice will escape liability, either by judicial construction or administrative grace. This happens most often when there is a perceived culpability gap between accomplice and primary offender. Such accomplices are usually victims, customers, or subordinates of a primary offender. Section 2(b) (willfully causing a crime) applies to defendants who work through either witting or unwitting intermediaries, through the guilty or the innocent. Whether the intermediary is a subordinate or an undercover government agent, he may be well aware that his conduct constitutes an element of the underlying offense. On the other hand, whether the intermediary is a dupe or a facilitating governmental official, §2(b) applies even if the intermediary is unaware of the nature of his conduct. Section 2(a) requires two guilty parties, a primary offender and an accomplice. Section 2(b) permits prosecution when there is only one guilty party, a “causing” individual and an innocent agent. Both subsections, however, require a completed offense. Federal courts sometimes mention, but rarely apply, a withdrawal defense comparable to one available in conspiracy cases. Proponents of a general withdrawal defense in §2 cases may find support in recent Supreme Court dicta. In Rosemond, the Court explained that an accomplice must know of the pending substantive offense in order to be shown to have embraced its commission. It did so in a manner suggesting that an accomplice might be able to withdraw and escape liability prior to the commission of the substantive offense, even if he had contributed to the crime’s ultimate success. There is no general civil aiding and abetting statute. Aiding and abetting a violation of a federal criminal law does not trigger civil liability unless Congress has said so in so many words. This report is an abridged version of CRS Report R43769, Aiding, Abetting, and the Like: An Overview of 18 U.S.C. 2, by Charles Doyle, without the footnotes, attribution for quotations, and citations to authority found there.

Oct 24, 2014

Aiding, Abetting, and the Like: An Overview of 18 U.S.C. 2

Virtually every federal criminal statute has a hidden feature; primary offenders and even their most casual accomplices face equal punishment. This results from 18 U.S.C. 2, which visits the same consequences on anyone who orders or assists in the commission of a federal crime. Aiding and abetting means assisting in the commission of someone else’s crime. Section 2(a) demands that the defendant embrace the crime of another and consciously do something to contribute to its success. An accomplice must know the offense is afoot if he is to intentionally contribute to its success. While a completed offense is a prerequisite to conviction for aiding and abetting, the hands-on offender need be neither named nor convicted. On occasion, an accomplice will escape liability, either by judicial construction or administrative grace. This happens most often when there is a perceived culpability gap between accomplice and primary offender. Such accomplices are usually victims, customers, or subordinates of a primary offender. Section 2(b)(willfully causing a crime) applies to defendants who work through either witting or unwitting intermediaries, through the guilty or the innocent. Whether the intermediary is a subordinate or an undercover government agent, he may be well aware that his conduct constitutes an element of the underlying offense. On the other hand, whether the intermediary is a dupe or a facilitating governmental official, §2(b) applies even if the intermediary is unaware of the nature of his conduct. Section 2(a) requires two guilty parties, a primary offender and an accomplice. Section 2(b) permits prosecution when there is only one guilty party, a “causing” individual and an innocent agent. Both subsections, however, require a completed offense. Federal courts sometimes mention, but rarely apply, a withdrawal defense comparable to one available in conspiracy cases. Proponents of a general withdrawal defense in §2 cases may find support in recent Supreme Court dicta. In Rosemond, the Court explained that an accomplice must know of the pending substantive offense in order to be shown to have embraced its commission. It did so in a manner suggesting that an accomplice might be able to withdraw and escape liability prior to the commission of the substantive offense, even if he had contributed to the crime’s ultimate success. There is no general civil aiding and abetting statute. Aiding and abetting a violation of a federal criminal law does not trigger civil liability unless Congress has said so in so many words. This report is available in an abridged version as CRS Report R43770, Aiding, Abetting, and the Like: An Abbreviated Overview of 18 U.S.C. 2, by Charles Doyle.

Oct 24, 2014

The Defense Production Act of 1950: History, Authorities, and Considerations for Congress

The Defense Production Act (DPA) of 1950 (P.L. 81-774, 50 U.S.C. Appx §2061 et seq.), as amended, confers upon the President a broad set of authorities to influence domestic industry in the interest of national defense. The authorities can be used across the federal government to shape the domestic industrial base so that, when called upon, it is capable of providing essential materials and goods needed for the national defense. Though initially passed in response to the Korean War, the DPA is historically based on the War Powers Acts of World War II. Gradually, Congress has expanded the term national defense, as defined in the DPA, so that it now includes activities related to homeland security and domestic emergency management. The scope of DPA authorities extends beyond shaping U.S. military preparedness and capabilities, as the authorities may also be used to enhance and support domestic preparedness, response, and recovery from natural hazards, terrorist attacks, and other national emergencies. The current authorities of the DPA include, but are not limited to: Title I: Priorities and Allocations, which allows the President to require persons (including businesses and corporations) to prioritize and accept contracts for materials and services as necessary to promote the national defense. Title III: Expansion of Productive Capacity and Supply, which allows the President to incentivize the domestic industrial base to expand the production and supply of critical materials and goods. Authorized incentives include loans, loan guarantees, direct purchases and purchase commitments, and the authority to procure and install equipment in private industrial facilities. Title VII: General Provisions, which includes key definitions for the DPA and several distinct authorities, including the authority to establish voluntary agreements with private industry; the authority to block proposed or pending foreign corporate mergers, acquisitions, or takeovers that threaten national security; and the authority to employ persons of outstanding experience and ability and to establish a volunteer pool of industry executives who could be called to government service in the interest of the national defense. The authorities of the DPA are generally afforded to the President in statute. The President, in turn, has delegated these authorities to department and agency heads in Executive Order 13603, National Defense Resource Preparedness, issued in 2012. While the authorities are most frequently used by, and commonly associated with, the Department of Defense, they can be, and have been, used by numerous other executive departments and agencies. Since 1950, the DPA has been reauthorized over 50 times, though significant authorities were terminated from the original law in 1953. Congress last reauthorized the DPA in 2014 (P.L. 113-172). This reauthorization amended some of the current DPA authorities and extended the termination of the act by five years, until September 30, 2019, when nearly all DPA authorities will terminate. A few authorities of the DPA, such as the Exon-Florio Amendment (which established government review of the acquisition of U.S. companies by foreigners) and anti-trust protections for certain voluntary industry agreements, have been made permanent by Congress. The DPA lies within the legislative jurisdiction of the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs. Congress may consider enhancing its oversight of executive branch activities related to the DPA in a number of ways. To enhance oversight, Congress could expand executive branch reporting requirements, track and enforce rulemaking requirements, review the activities of the Defense Production Act Committee, and broaden the committee oversight jurisdiction of the DPA in Congress. Congress may also consider amending the DPA, either by creating new authorities or repealing existing ones. In addition, Congress may consider amending the definitions of the DPA to expand or restrict the DPA’s scope, amending the statute to supersede the President’s delegation of DPA authorities made in E.O. 13603, or consider adjusting future appropriations to the DPA Fund in order to manage the scope of Title III projects initiated by the President.

Oct 23, 2014

Temporary Professional, Managerial, and Skilled Foreign Workers: Policy and Trends

Sep 22, 2014

Authorization of Appropriations: Procedural and Legal Issues

To provide funding for discretionary spending programs of the government, Congress generally uses an annual appropriations process. Under congressional rules, when making decisions about the funding of individual items or programs, however, Congress may be constrained by the terms of previously enacted legislation. The way in which the House and Senate interpret and apply this concept under their respective rules and precedents creates a distinction between authorized and unauthorized appropriations. This report provides a brief explanation of this distinction, and its significance for understanding how appropriations and other legislation work in conjunction to determine how agencies may spend appropriated funds. The U.S. Constitution grants Congress the “power of the purse” by prohibiting expenditures “but in Consequence of Appropriations made by Law.” As a result, legislation to provide for government expenditures must adhere to the same requirements and conditions imposed on the law-making process as any other measure. The Constitution does not, however, prescribe specific practices or procedures. Instead, the manner in which the House and Senate have chosen to exercise this authority is a construct of congressional rules and practices, which have evolved pursuant to the constitutional authority of each chamber to “determine the Rules of its Proceedings.” One effect of these rules has been the formalization of funding decisions as a two-step process, in which separate legislation to establish or continue federal agencies, programs, policies, projects, or activities, is presumed to be enacted first, and is subsequently followed by legislation that provides funding. Another effect of these rules has been a distinction between those appropriations authorized by law and those not authorized by law. Under the rules of the House and Senate, this distinction is largely based on technical issues related to the precedents of the respective chamber; the existence of legislation defining the legal authority for particular federal agencies, programs, policies, projects, or activities; and the relationship of such authority to the applicable appropriation. In most cases, an appropriation is said to be authorized when it follows explicit language defining the legal authority for a federal agency, program, policy, project, or activity that will be applicable in the same fiscal year for which the appropriation is to be enacted. In contrast, an appropriation is said to be unauthorized when no such authority has been enacted or, if previously enacted, has terminated or expired. There is no constitutional or general statutory requirement that an appropriation must be preceded by a specific act that authorized the appropriation. According to the Government Accountability Office, “The existence of a statute (organic legislation) imposing substantive functions upon an agency that require funding for their performance is itself sufficient legal authorization for the necessary appropriations.” An authorizing statute that establishes a federal agency often creates statutory duties and obligations for that federal agency (including the responsibility to conduct certain activities such as enforcement of the particular law that the agency is charged with administering). If an authorization of appropriations expires, or if Congress fails to appropriate sufficient funds without explicitly denying their use for a particular purpose, those statutory obligations still exist even though the agency may lack sufficient funds to satisfy them.

Sep 9, 2014

Protection of Trade Secrets: Overview of Current Law and Legislation

A trade secret is confidential, commercially valuable information that provides a company with a competitive advantage, such as customer lists, methods of production, marketing strategies, pricing information, and chemical formulae. (Well-known examples of trade secrets include the formula for Coca-Cola, the recipe for Kentucky Fried Chicken, and the algorithm used by Google’s search engine.) To succeed in the global marketplace, U.S. firms depend upon their trade secrets, which increasingly are becoming their most valuable intangible assets. However, U.S. companies annually suffer billions of dollars in losses due to the theft of their trade secrets by employees, corporate competitors, and even foreign governments. Stealing trade secrets has increasingly involved the use of cyberspace, advanced computer technologies, and mobile communication devices, thus making the theft relatively anonymous and difficult to detect. The Chinese and Russian governments have been particularly active and persistent perpetrators of economic espionage with respect to U.S. trade secrets and proprietary information. In contrast to other types of intellectual property (trademarks, patents, and copyrights) that are governed primarily by federal law, trade secret protection is primarily a matter of state law. Thus, trade secret owners have more limited legal recourse when their rights are violated. State law provides trade secret owners with the power to file civil lawsuits against misappropriators. A federal criminal statute, the Economic Espionage Act (EEA), allows U.S. Attorneys to prosecute anyone who engages in “economic espionage” or the “theft of trade secrets.” The EEA’s “economic espionage” provision punishes those who misappropriate trade secrets with the intent or knowledge that the offense will benefit a foreign government, instrumentality, or agent. The EEA’s “theft of trade secrets” prohibition is of more general application, involving the intentional theft of a trade secret related to a product or service used in or intended for use in interstate or foreign commerce, with the intent or knowledge that such action will injure the trade secret owner. In addition to criminal enforcement of the statute, the EEA authorizes the Attorney General to bring a civil action to obtain injunctive relief against any violation of the EEA. However, because the U.S. Department of Justice and its Federal Bureau of Investigation have limited investigative and prosecutorial resources, as well as competing enforcement priorities, some observers assert that the federal government cannot adequately protect U.S. trade secrets from domestic and foreign threats. They have urged Congress to adopt a comprehensive, federal trade secret law in order to promote uniformity in trade secret law throughout the United States and to more effectively deal with trade secret theft that crosses state and international borders (a challenging problem for state courts to address). Among other things, they support the establishment of a federal civil cause of action for trade secret misappropriation, to allow U.S. companies to obtain monetary and injunctive relief when their trade secret assets are stolen. Several bills have been introduced in the 113th Congress related to trade secret misappropriation, including S. 884 (Deter Cyber Theft Act); H.R. 2281, S. 1111 (Cyber Economic Espionage Accountability Act); S. 1770 (Future of American Innovation and Research (FAIR) Act of 2013); H.R. 2466 (Private Right of Action Against Theft of Trade Secrets Act of 2013); S. 2384 (Deter Cyber Theft Act of 2014); S. 2267 (Defend Trade Secrets Act of 2014); H.Res. 643; H.R. 5103 (Chinese Communist Economic Espionage Sanctions Act); and H.R. 5233 (Trade Secrets Protection Act of 2014). As of the date of this report, none of these proposals has been enacted.

Sep 5, 2014

The U.S. Wine Industry and Selected Trade Issues with the European Union

Jul 24, 2014

Shipping U.S. Crude Oil by Water: Vessel Flag Requirements and Safety Issues

New sources of crude oil from North Dakota, Texas, and western Canada have induced new routes for shipping crude oil to U.S. and Canadian refineries. While pipelines have traditionally been the preferred method of moving crude overland, they either are not available or have insufficient capacity to move all the crude from these locations. While rail has picked up some of this cargo, barges, and to a lesser extent tankers, also are moving increasing amounts of crude in domestic trade. The rather sudden shift in transportation patterns raises concerns about the safety and efficiency of oil tankers and barges. The United States now imports less oil than five years ago by oceangoing tankers, while more oil is moving domestically by river and coastal barges. However, the Coast Guard still lacks a safety inspection regime for barges similar to that which has long existed for ships. The possibility of imposing an hours-of-service limit for barge crews as part of this regime is controversial. Congress called for a barge safety inspection regime a decade ago, but the related rulemaking is not complete. The Coast Guard’s progress in revamping its Marine Safety Office is a related issue that Congress has examined in the past. The majority of U.S. refineries are located near navigable waters to take advantage of economical waterborne transport for both import and export. However, for refineries switching from imported to domestic crude oil, the advantage diminishes considerably. This is because the Jones Act, a 1920 law that seeks to protect U.S. shipyards and U.S. merchant sailors in the interest of national defense, restricts domestic waterborne transport to U.S.-built and -crewed vessels. The purchase price of U.S.-built tankers is about four times the price of foreign-built tankers, and U.S. crewing costs are several times those of foreign-flag ships. The small number of U.S.-built tankers makes it difficult for shippers to charter tankers for a short period or even a single voyage, highly desirable in an oil market with shifting supply patterns. The unavailability of U.S.-built tankers may result in more oil moving by costlier, and possibly less safe, rail transport than otherwise would be the case. Some Texas oil is moving to refineries in eastern Canada, bypassing refineries in the northeastern United States, because shipping to Canada on foreign-flag vessels is much cheaper than shipping domestically on Jones Act-eligible ships. Some of these issues may be addressed in the Coast Guard and Maritime Transportation Act of 2014 (H.R. 4005), which has passed the House, and the Coast Guard Authorization Act for Fiscal Years 2015 and 2016 (S. 2444), introduced in the Senate. The House bill requests federal agency studies and recommendations towards improving the competitiveness of the U.S.-flag industry while the Senate bill contains provisions related to oil spill response.

Jul 21, 2014

U.S. Sanctions on Russia in Response to Events in Ukraine

Jul 18, 2014

Social Security: The Lump-Sum Death Benefit

Congressional Research Service 7-5700 www.crs.gov R43637 Summary When a worker who is insured by Social Security and living with a spouse dies, the spouse is entitled to a lump-sum death benefit of $255. If there is no such spouse, the payment can be made to a surviving child who is receiving or is eligible to receive benefits based on the deceased person’s work. In the majority of deaths, however, no payment is made. The death benefit used to be a more important part of Social Security, but the payment has been fixed at $255 for the past four decades, during which inflation has eroded its value. At the same time, the real value of other Social Security benefits has increased. Total federal spending on lump-sum death benefits is now about $200 million, only 0.03% of the total Social Security benefits. Although the benefit was once linked to burial expenses and is sometimes still referred to as a “funeral benefit,” it no longer has any legal connection with funeral expenses. Some proposals would have targeted the death benefit to those with the greatest need, increased the benefit, or eliminated it. Contents Introduction 1 History of the Lump-Sum Death Benefit 1 Current Eligibility Rules 2 Number of Benefit Payments and Total Spending 2 Proposals to Change or Eliminate the Lump-Sum Death Benefit 3 Figures Figure 1. The Diminishing Significance of the Lump-Sum Death Benefit 3 Contacts Author Contact Information 4 Introduction Following the death of a worker beneficiary or other insured worker, Social Security makes a one-time payment of $255 to the surviving spouse or, if there is no spouse, to surviving dependent children. In 2012, such payments were made for about 770,000 deaths, for a total of about $200 million in benefit payments. The death payment was capped at $255 in 1954 and since 1982 all payments have equaled $255, so the real (inflation-adjusted) value of the benefit now declines each year. History of the Lump-Sum Death Benefit Survivors’ benefits were not included in the original Social Security Act of 1935, but the program did include a lump-sum benefit that would be paid if a worker died before the retirement age of 65. That provision provided some benefits to families who otherwise would have paid Social Security taxes but received no benefits. The benefit equaled 3.5 percent of the worker’s covered earnings—those earnings that were subject to the Social Security payroll tax. Those payments were made from 1937 through 1939. When monthly survivors’ benefits were added to the program in 1939, a limited version of the lump-sum death benefit was retained. It was paid only in cases when no survivors’ benefits were paid on the basis of the deceased worker’s earnings record. When made, the payment equaled six times the primary insurance amount (PIA). The PIA generally equals the monthly benefit amount that a worker would have received. The payment was made to a family member or to an individual who helped pay for the funeral. In 1950, eligibility for the payment was expanded to include cases where survivors’ benefits were also paid “so that survivors’ benefits need not be diverted for payment of burial expenses of an insured worker.” The benefit was therefore paid in nearly every death of a worker who was insured by Social Security. The 1950 legislation also sharply increased the PIA (and therefore increased regular monthly benefit levels). In order to maintain the value of the lump-sum benefit, the formula was changed to equal three times the PIA, rather than six times. The 1954 Social Security Amendments kept the formula of three times the PIA but capped the benefit at $255, which was approximately the maximum benefit under the 1950 law. By 1974, the minimum PIA was $85, or one-third of the $255 cap, so the minimum lump sum benefit was also $255. As a result, nearly all lump-sum benefits have been $255 since. Because some payments are based on PIAs from earlier years, some payments were slightly lower. In 1974, the average payment was $254.64, and it has been $255.00 since 1982. Currently, the payment may be lower if the deceased was covered by a foreign system with which the United States has an agreement to integrate benefits, known as a totalization agreement. Finally, in 1981, eligibility for the lump-sum payment was restricted to limited categories of survivors. That change reduced the number of payments made by nearly half, from 1.55 million in 1980 to 800,000 in 1982. Current Eligibility Rules If a surviving spouse is living with the worker at the time of death, the benefit is paid to the spouse. If there is no such spouse, the benefit is paid to a spouse or child who is receiving or is eligible to receive monthly benefits on the worker’s record. If the deceased does not have any survivors in those categories, no death benefit is paid. If there are multiple eligible children, the benefit is split evenly among them. Number of Benefit Payments and Total Spending In 2012, the Social Security Administration paid $200 million in lump-sum benefits for 769,988 deaths. Because the $255 payment was split between multiple recipients in some cases, the agency made a total of 805,911 payments. The number of payments is projected to remain at about the same level in coming years, so total spending will also remain at approximately the same dollar level. For most deaths, no lump-sum death benefit is paid. A benefit is paid for about 38% of deaths of insured workers. The real value of the death benefit has declined dramatically since it was introduced. For example, in 1954, the average nominal benefit was $208, which would have been equivalent to $1,740 in 2012 dollars. In recent decades, inflation has caused the real value of the $255 payment to continue to decline, as shown in Figure 1. Total spending on the benefit as a share of total Social Security benefits has declined even faster than the real value of the benefit, because monthly benefit payments are linked to national wage levels. In the 1960s, the lump-sum benefit accounted for more than 1% of Social Security benefit outlays, but that share has declined steadily, to only 0.03% in 2012. Under current law, the share will continue to decline as spending on the lump-sum death benefit remains generally constant but spending on other benefits continues to increase steadily. Figure 1. The Diminishing Significance of the Lump-Sum Death Benefit Source: CRS, based on Social Security, 2013 Statistical Supplement, Tables 6.D9 and 4.A5 Notes: Real value of the average benefit is shown in 2012 dollars, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Social Security Administration (SSA) estimated in 2006 that the annual administrative costs of the lump-sum death benefit were $15 million. That estimate has not been updated, but the costs are unlikely to have changed significantly. Proposals to Change or Eliminate the Lump-Sum Death Benefit Over the years, various proposals would have changed or eliminated the death benefit. In 1979, President Carter’s budget described it as “largely an anachronism” and proposed replacing it with a similar benefit that would be paid only if the deceased or the surviving spouse were eligible for Supplemental Security Income, a program that provides cash benefits to aged, blind, or disabled persons with limited income and assets. Under that proposal, only about 30,000 recipients would have received a benefit each year. The 1979 Advisory Council on Social Security recommended that the benefit be increased to three times the PIA, but no more than $500. The Council found that the benefit “provides valuable assistance at a time of special financial need. The monthly survivors’ benefits under social security are designed to meet regular recurring costs, while the lump-sum death payment is designed to meet the expenses of a final illness and funeral.” (In 1980, the average cost of a funeral was about $1,800; in 2012, it was about $7,000.) A significant minority of the Council favored the Carter proposal of targeting the benefit to those with the greatest need, but with a higher benefit of perhaps $625. President Bush’s 2006 budget proposed eliminating the benefit, arguing that it “no longer provides meaningful monetary benefit for survivors” and that it results in high administrative costs. The $15 million estimated administrative cost was about 7% of benefit outlays. Administrative costs for the entire Social Security program are less than 1% of benefit outlays. Some proposals would have increased the benefit. For example, in the 110th Congress, H.R. 341 proposed expanding eligibility for the benefit to insured workers upon the death of their uninsured spouses. In the 111th Congress, the Social Security Death Benefit Increase Act of 2010 (H.R. 6388) would have increased the benefit from $255 to $332, and the BASIC Act (H.R. 5001) would have increased it to 47% of the worker’s PIA. Author Contact Information Katelin P. Isaacs Analyst in Income Security [email protected], 7-7355

Jul 15, 2014

Social Security: Minimum Benefits

Congressional Research Service 7-5700 www.crs.gov R43615 Summary Social Security’s minimum benefit provision, the Special Minimum Primary Insurance Amount (PIA), is an alternative benefit formula that increases benefits paid to workers who had low earnings for many years and to their dependents and survivors. The Special Minimum PIA is based on the number of years a person has worked, whereas the standard benefit formula is based on a worker’s average lifetime earnings. The worker receives the higher of the two benefits. However, the Special Minimum PIA has virtually no effect on the benefits paid to today’s new retirees. Under current law, it grows with price levels, whereas the standard benefit is linked to wages. Because wages generally grow faster than prices, the Special Minimum PIA affects fewer beneficiaries every year. In 2013, about one out of every 1,500 Social Security recipients qualified for the minimum benefit, and the provision resulted in only about $20 million of the more than $800 billion in Social Security benefit outlays. The Social Security Administration (SSA) estimates that provision will have no effect on workers turning 62 in 2019 or later. Social Security has had a minimum benefit provision since 1939. Originally, the minimum benefit was a fixed-dollar amount. Congress created the Special Minimum PIA in 1972 in response to concerns that the fixed-dollar minimum provided a windfall to people who had worked only a few years in Social Security-covered employment. The Special Minimum PIA may be paid to workers with more than 10 years in Social Security-covered employment. The Special Minimum benefit amount paid to a retired worker is based on, and rises with, the number of years worked in covered employment. Some recent proposals would reinstitute a minimum benefit. This renewed interest has been sparked by Social Security proposals that would reduce the regular benefit and by concern over poverty rates among beneficiaries who had low wages throughout their careers. Increases in Social Security benefits targeted at people with greater need could be implemented in various ways. For example, a new minimum benefit provision could be introduced, the standard benefit could be increased for people who worked for many years at low earnings, or a fixed dollar-benefit could be introduced. Similar provisions could also be introduced through other programs, such as Supplemental Security Income (SSI). Contents Introduction 1 Determining Regular Social Security Retirement Benefits 1 Determining the Special Minimum PIA Benefit Amount 1 Years of Coverage 2 Special Minimum PIA Initial Monthly Benefit Amounts 2 Benefits for Family Members 4 Potential Adjustments to the Special Minimum PIA Benefit Amount 4 Dually Entitled Beneficiaries 5 The Special Minimum PIA Has Little Effect on Current Beneficiaries 5 History of the Social Security Minimum Benefit Provision 6 Original Structure of the Social Security Minimum Benefit (1939 to 1981) 6 The Special Minimum PIA (1973 to the Present) 7 Arguments For and Against a Minimum Benefit Provision 8 Arguments for a Minimum Benefit Provision 8 Arguments for Phasing Out the Social Security Minimum Benefit 9 Criteria for Evaluating Minimum Benefit Proposals 9 To What Extent Does the Benefit Reduce Poverty? 9 Should the Benefit Grow with Prices or Wages? 10 What Years of Coverage Requirements Should a Minimum Benefit Have? 10 Interactions Between Social Security Minimum Benefits and Supplemental Security Income 11 Other Considerations 12 Minimum Benefit Options and Estimated Effects 12 Options Based on Number of Years of Work 13 Options to Enhance the Standard Social Security Benefit 14 A Fixed-Dollar Benefit 14 Alternative Strategies for Addressing Poverty Among Long-Term Low-Wage Workers 15 Tables Table 1. Special Minimum PIA Monthly Benefit Amounts, 2014 3 Table 2. Number of Special Minimum PIA Beneficiaries and Average Increase in Monthly Benefit, June 2013 5 Contacts Author Contact Information 16 Introduction Social Security’s minimum benefit provision, the Special Minimum Primary Insurance Amount (PIA), is an alternative benefit formula that increases benefits paid to workers who had low earnings for many years and to their dependents and survivors. Unlike the standard Social Security benefit formula, which is based on a worker’s average lifetime earnings, the Special Minimum PIA is based on the number of years a person has worked. This paper explains how the Special Minimum PIA functions under current law and presents arguments for and against expanding it. It then discusses criteria for evaluating proposals for change and describes some specific options for increasing benefits paid to people with low earnings or low income. Determining Regular Social Security Retirement Benefits To compute the regular Social Security retirement benefit (known as the regular “primary insurance amount,” or PIA), a worker’s highest 35 years of earnings are converted into current-dollar terms by indexing each year of earnings to historical wage growth. The highest 35 years of indexed earnings are divided by 35 to determine career-average annual earnings and then divided by 12 to determine the worker’s average indexed monthly earnings (AIME). If a worker has fewer than 35 years of earnings in covered employment, years of no earnings are entered as zeros. Next, the standard Social Security benefit formula is applied to the worker’s AIME. Two dollar thresholds, known as “bendpoints,” are used to divide the worker’s AIME into three segments; in 2014, the two bendpoints are $816 and $4,917. Next, three factors—90%, 32%, and 15%—are applied to the three different segments of the worker’s AIME to compute the basic monthly benefit. Because the lower factors apply to people with higher earnings, the benefit formula is progressive. That is, it replaces a higher percentage of the pre-retirement earnings of workers with low career-average earnings than for workers with high career-average earnings. For details, see CRS Report R43542, How Social Security Benefits Are Computed: In Brief, by Noah P. Meyerson. Social Security also provides auxiliary benefits to eligible family members of a retired, disabled, or deceased worker. Benefits payable to family members are equal to a specified percentage of the worker’s PIA. For example, a spouse’s benefit is equal to 50% of the worker’s PIA and a widow(er)’s benefit is equal to 100% of the deceased worker’s PIA. For more information on auxiliary benefits, see “Benefits for the Worker’s Family Members” in CRS Report R42035, Social Security Primer, by Dawn Nuschler. Determining the Special Minimum PIA Benefit Amount Unlike the regular benefit, the Special Minimum PIA benefit is based only on the number of years spent in Social Security-covered employment. Beneficiaries receive the higher of the two amounts. Years of Coverage A “year of coverage” for the purposes of computing the Special Minimum PIA is a year during which the worker earns more than a specified threshold. Since 1991, the annual threshold for a year of coverage under the Special Minimum PIA has equaled 15% of the “old law” contribution and benefit base. The “old law” contribution and benefit base is indexed to increases in the national average wage. As a result, year of coverage thresholds for the Special Minimum PIA are effectively indexed to wage growth. The 2014 threshold is $13,050. The year of coverage thresholds create a “cliff” effect. If a worker’s earnings in a year are even one dollar short of the threshold for that year, a year of coverage is not credited. Special Minimum PIA Initial Monthly Benefit Amounts The Special Minimum PIA depends only on a worker’s years of coverage. A worker must have at least 11 years of coverage to be eligible for the benefit. For those with 11 years, the Special Minimum PIA monthly benefit is $39.30. It increases by about $41 for each additional year of coverage (see Table 1). (For each additional year of coverage, the actual increase in the PIA is not exactly $41 because of the cumulative impact of annual rounding.) For example a person with 30 years of coverage would qualify for an initial monthly Special Minimum PIA benefit of $804.00 (before potential adjustments, as will be discussed below). Table 1. Special Minimum PIA Monthly Benefit Amounts, 2014 Number of Years of Coverage Monthly Primary Insurance Amount 11 $59.80 12 80.20 13 121.20 14 161.90 15 202.40 16 243.60 17 284.40 18 325.30 19 366.10 20 407.10 21 448.00 22 488.60 23 530.10 24 570.90 25 611.50 26 653.00 27 693.40 28 734.30 29 775.20 30 816.00 Source: Social Security Administration, http://www.socialsecurity.gov/cgi-bin/smt.cgi. The Special Minimum PIA benefit amounts are indexed to price inflation, in contrast to regular Social Security benefits, which are indexed to wage inflation. Wages generally grow faster than prices, so regular benefits have grown faster than Special Minimum PIA benefits. As a result, a worker’s regular benefit is now almost always higher than the Special Minimum PIA benefit. After the initial year of benefit receipt, the same Social Security cost-of-living-adjustment (COLA) applies to both the Special Minimum PIA benefit and regular benefits. Benefits for Family Members Monthly benefit rates for dependents and survivors are figured as a percentage of the worker’s Special Minimum PIA, not to exceed the family maximum amount (described below). The computation of auxiliary benefits uses the same rates that are used for regular benefits. For details, see “Benefits for the Worker’s Family Members” in CRS Report R42035, Social Security Primer, by Dawn Nuschler. Potential Adjustments to the Special Minimum PIA Benefit Amount Various provisions may cause a worker’s monthly benefit payment to differ from the PIA. Some of the provisions apply to both the regular PIA and the Special Minimum PIA, and some adjustments differ. Four provisions affect both the regular benefit and the Special Minimum benefit: Actuarial benefit reduction. The provision reduces monthly benefits below the PIA for people who claim benefits before the full retirement age (FRA). Retirement earnings test (RET). The RET reduces current benefits for beneficiaries who are younger than the FRA and have earnings that exceed a specified dollar amount. Government pension offset (GPO). The GPO reduces benefits for people who have pensions from employment that is not covered by Social Security, but who are entitled to Social Security spouse or survivor benefits based on a spouse or deceased spouse’s work record in Social Security-covered employment. Family maximum benefit. The maximum total benefit that can be received by all members of a family varies from 150% to 188% of the retired or deceased worker’s PIA, even if the sum of the benefits for the individuals in the family would be greater. Two provisions affect regular benefits but do not affect Special Minimum benefits: Delayed retirement credit (DRC). The DRC increases regular benefits for workers who start receiving benefits after reaching the FRA. It does not apply to Special Minimum benefits. Windfall elimination provision (WEP). A regular benefit may be reduced under the WEP if the worker is entitled to a pension based on employment in certain federal, state, or local government positions that are not covered by Social Security. It does not apply to Special Minimum benefits. Dually Entitled Beneficiaries Some beneficiaries are entitled to Social Security benefits based both on their own work and on a spouse’s work. When a beneficiary’s retired-worker benefit is higher than the spousal or survivor benefit, the beneficiary receives only the retired-worker benefit. But when the beneficiary’s retired-worker benefit is lower than the spousal or survivor benefit, the person is referred to as “dually entitled” and receives a payment equal to the spousal or survivor benefit. (Technically, the payment consists of the retired-worker benefit plus the difference between the retired-worker benefit and the full spousal or survivor benefit.) Many workers—primarily women—who qualify for the Special Minimum PIA based on their own work are dually entitled and receive a benefit amount that is equal to the higher spouse or survivor benefit. Therefore, although they technically receive the Special Minimum benefit, the provision has no effect on their benefits. The Special Minimum PIA Has Little Effect on Current Beneficiaries The Special Minimum PIA has only a minimal effect on current benefits, because the standard benefit is almost always greater than the special minimum benefit. Only about 35,000 of the 54 million Social Security beneficiaries were affected by the Special Minimum PIA in June 2013, and it increased their average benefit by just $46 per month (see Table 2). That is, the special minimum benefit was, on average, $46 larger than the standard benefit those beneficiaries were entitled to. SSA projects that the provision will have no effect on people turning 62 in 2019 or later. Almost 75% of the affected beneficiaries were workers, and about 20% were widows. Spouses and child beneficiaries accounted for the remainder. Most workers who qualify for the special minimum PIA are women. Table 2. Number of Special Minimum PIA Beneficiaries and Average Increase in Monthly Benefit, June 2013 Beneficiary Type Number of Beneficiaries Average Monthly Benefit Increase Worker 25,333 $51.28 Spouse 1,526 25.04 Child 1,199 29.67 Widow 6,673 36.03 All Beneficiaries 34,731 46.45 Source: Craig A. Feinstein, Diminishing Effect of the Special Minimum PIA, Social Security Administration, Actuarial Note No. 154, November 2013, Table 3. Since 1999, the provision has benefited only newly entitled beneficiaries whose regular benefit is subject to the WEP. As explained above, the WEP can reduce regular benefits but does not reduce Special Minimum benefits. The Special Minimum helps only individuals whose regular benefit (reduced by the WEP) is less than the Special Minimum benefit (not reduced by the WEP). History of the Social Security Minimum Benefit Provision Original Structure of the Social Security Minimum Benefit (1939 to 1981) Congress first created a Social Security Minimum Benefit provision in 1939, when it established a Minimum Benefit of $10 per month. (At the time, $10 was the lowest monthly benefit amount payable under the benefit calculations used that year.) From 1939 to 1981, the Minimum Benefit provided a minimum benefit to anyone with low average earnings in Social Security-covered employment. Unlike the current Special Minimum PIA, the law did not require any number of years of work or any level of earnings. The Minimum Benefit applied both to people with long careers with low annual earnings and to people with shorter careers with higher annual earnings. Successive legislation periodically raised the original $10 monthly dollar amount in increments until 1975, when Minimum Benefit amounts for newly entitled beneficiaries were tied to increases in the consumer price index. Also starting in 1975, a cost-of-living adjustment (COLA) was provided for Minimum Benefits following the initial year of benefit entitlement. The Social Security Financing Amendments of 1977 (P.L. 95-216) fixed the initial Minimum Benefit at the amount in effect in December 1978—$122 per month—for beneficiaries newly entitled in January 1979 or later. Annual COLAs continued to be provided to beneficiaries following the first year of benefit receipt. The House Ways and Means Committee Report to accompany the bill to freeze the benefit (H.R. 9346, which became P.L. 95-216) contained this rationale: Increasingly, the minimum benefit is being paid to people who did not, during their working years, rely on their covered earnings as a primary source of support. Such people include, for example, workers whose primary work was in non-covered employment subject to a staff retirement system—such as Federal civilian employees. In December 1975, about 45% of civil service retirement annuitants were receiving Social Security benefits, more than a quarter of whom were receiving the minimum.... Because of the characteristics of people getting the minimum, it has been characterized as being a windfall’ to people who have not worked regularly under the program. The Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) eliminated the original Minimum Benefit structure for all current and future beneficiaries effective January 1, 1982. The bill was enacted into law on August 13, 1981, but public outcry led to reconsideration. Subsequently, in December 1981, Congress passed legislation to restore the original Minimum Benefit structure for people who became eligible for Social Security benefits before January 1, 1982. That law eliminated the original Minimum Benefit structure for all beneficiaries who attained the age of 62, became disabled, or were eligible for survivor benefits based on the death of a family member after December 1981. The Special Minimum PIA (1973 to the Present) The Special Minimum PIA was enacted in 1972 at the same time as the Supplemental Security Income (SSI) program and was designed to help reduce dependence on SSI by people who worked in Social Security-covered employment for many years. The provision took effect in January 1973. The Special Minimum PIA operated alongside the original Minimum Benefit until the end of 1981, when the latter was phased out. When both provisions were in effect, beneficiaries received the higher of the benefits. Unlike the original Minimum Benefit, the Special Minimum PIA did not help people who had paid Social Security payroll taxes for only a few years. Special Minimum PIA initial benefits were indexed to price inflation in 1977. In contrast, the thresholds for determining a year of coverage under the Special Minimum PIA are indexed to growth in national average wages, which historically have risen faster than prices. For a detailed legislative history of the Special Minimum PIA, see Kelly A. Olsen and Don Hoffmeyer, “Social Security’s Minimum Benefit,” Social Security Bulletin, vol. 64, no. 2 (2001/2002), pp.4-6, at http://www.ssa.gov/policy/docs/ssb/v64n2/v64n2p1.pdf. Arguments For and Against a Minimum Benefit Provision Arguments for a Minimum Benefit Provision With the effective elimination of the Special Minimum PIA, many policy makers and analysts have suggested creating a new minimum benefit. A minimum benefit within Social Security could be a suitable way to reward long-term, low-wage work without subjecting beneficiaries to means testing, which is often cumbersome to administer and which may make beneficiaries feel stigmatized. Some argue that a minimum benefit remains necessary because many elderly Social Security beneficiaries, especially elderly women, are poor or near poor. In 2012, about 7% of Social Security beneficiaries aged 65 or older had family incomes below the poverty threshold and about 13% of beneficiaries aged 65 or older had family incomes below 125% of the poverty threshold. (The comparable figures for non-beneficiaries are 20% and 24%, respectively.) About 9% of female beneficiaries aged 65 or over had family incomes below the poverty line, compared with about 4% of male beneficiaries in this age group. Some research suggests restructuring the Social Security minimum could be more effective in alleviating poverty than certain reforms to the SSI program, although a combination of both programs could be useful in the event that Social Security benefits are greatly reduced in the future. Some view minimum benefits as a way to reward long-term, low-wage work with a Social Security benefit that is at or above the poverty threshold. Restructuring the Social Security minimum benefit to provide a benefit at or above the poverty threshold (e.g., 120% of the poverty threshold) for long-term workers would more generously reward long-term participation in the workforce. Others view a restructuring of minimum benefits as potentially helpful in the context of legislation that reduces Social Security benefits or exposes them to market risk. Several recent proposals that would reduce regular Social Security benefits have included minimum benefit guarantees. A minimum benefit could be designed to reduce poverty rates among older beneficiaries more efficiently than existing Social Security spousal and survivor benefits. This is partly because a redesigned minimum benefit could reach women who do not qualify for Social Security spouse or survivor benefits because they never married or because they divorced before reaching 10 years of marriage. Because of changing marriage and work patterns, the number of women eligible for spousal and survivors benefits is declining, making this a more important consideration. Arguments for Phasing Out the Social Security Minimum Benefit One argument for allowing the Special Minimum PIA to phase out is that minimum benefits cannot be accurately targeted to the working poor. Because SSA does not collect information on earnings per hour or on the number of hours worked, it is impossible to distinguish between people who had low annual earnings because they worked few hours at higher wages and those who worked many hours at lower wages. People with high annual but low lifetime earnings may be seen as having chosen their low earnings by working less than others. Another argument is that means-tested programs, such as SSI, are a more appropriate way to supplement the incomes of people with very low incomes and assets. Means testing can help target transfers to those who are in greatest financial need. Some research suggests, however, that means testing can harm incentives for work and saving because SSI’s asset limits are currently quite low. Another consideration is that Social Security is available to retired workers earlier than SSI. Retired workers can claim Social Security benefits starting at the age of 62 while SSI is available to aged beneficiaries starting at age 65. Finally, SSI is generally insufficient to move recipients above the federal poverty level. Criteria for Evaluating Minimum Benefit Proposals There are a number of possible criteria to consider when evaluating proposals for a minimum benefit. To What Extent Does the Benefit Reduce Poverty? One possible goal of a minimum benefit would be to reduce poverty. The Special Minimum PIA was not linked to poverty, and many people who receive it still have family income below the federal poverty threshold. The maximum benefit for people entitled in 2014 is $816 a month, or $9,792 a year, which is below the federal poverty guideline for a single person of $11,670. Proposed minimum benefit levels are often expressed as a percent of the federal poverty guidelines or as a percentage of a new poverty measure that is in line with the recommendations of the National Academy of Sciences. Should the Benefit Grow with Prices or Wages? In addition to setting a benefit level when a minimum benefit was first implemented, policy makers would have to decide how a minimum benefit would grow each year. As noted above, the effect of the Special Minimum PIA has essentially ended because it is linked to prices and regular Social Security benefits are linked to wages, which generally grow faster than prices. If the goal of a minimum benefit were to ensure a certain purchasing power, it could be indexed to prices. Under current law, the maximum SSI monthly benefit—which now effectively functions as the minimum benefit for most Social Security beneficiaries—grows with prices. However, if the goal of a minimum benefit were to provide beneficiaries with an income that grew at about the same rate as workers’ income, it could be linked to wage levels. What Years of Coverage Requirements Should a Minimum Benefit Have? To target the benefit at people with many years of work, many proposals would link minimum benefit levels to the number of years a person has worked in Social Security-covered employment. Many recent minimum benefit proposals would require that the worker have 30 years of Social Security-covered earnings to qualify for the full minimum benefit. These work tenure requirements are intended to reward long-time attachment to the workforce. A number of proposals would also provide a lower minimum benefit for people with 10 or 20 years of covered earnings. Lowering the required number of years of coverage would allow the minimum benefit to reach more workers, including more part-time and part-year workers. Women are more likely than men to work few years. Lowering the required number of years of coverage could, however, arguably, result in inadequate benefits for people with years of coverage at the lower bound of 10 or 20 years. A lower years-of-coverage requirement also raises questions about work incentives. Finally, in conjunction with a lower years-of-coverage requirement, the Windfall Elimination Provision or a similar policy could be applied to the minimum benefit provision to prevent a windfall to people with pensions from non-covered employment. Some have suggested counting quarters of coverage, instead of years of coverage as under the Special Minimum PIA, to make it easier for workers to qualify for the minimum benefit or to reach higher benefit levels. (Eligibility for regular benefits is based in part on a worker’s quarters of coverage. Workers earn up to four quarters of coverage. In 2014, each $1,200 earns one quarter of coverage; the dollar amount grows each year with average wages.) A variation on this type of reform would be to count partial years of coverage (i.e., if a person earned 50% of the coverage threshold, they would accrue half a year of coverage). One study looked at combining a quarterly coverage threshold with lowering the dollar amount of the coverage threshold (on an annualized basis). The study found that this reform would reach more workers than allowing partial years of coverage. Another possible reform would be to extend the years of coverage included for benefit determination beyond the current 30 years, for example to 35 or 40 years. This type of reform would reward additional years of work. Implemented together with wage indexation of the minimum benefit, this reform would slightly increase the share of benefits going to people with the most (35 or more) work years compared with current law. Interactions Between Social Security Minimum Benefits and Supplemental Security Income If the Social Security minimum benefit is redesigned to be more generous or reach more people, it would be necessary to address interactions between Social Security benefits and eligibility for other programs targeted at low-income individuals, most importantly the SSI. There would also be interactions with Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and the Low Income Home Energy Assistance Program (LIHEAP). SSI is available to people with low incomes and very limited resources. If a Social Security beneficiary also receives SSI, there is often no advantage to an increase in Social Security benefits, because SSI benefits will be reduced by an equal amount. Specifically, a person’s “countable” income is subtracted from the total of the SSI federal benefit rate ($721 per month in 2014 for an individual living independently) plus any state supplement. Countable income equals all unearned income, including Social Security benefits, in excess of $20. If a Social Security benefit is increased above the SSI federal benefit rate, affected beneficiaries’ total income will increase, but they may be at risk of losing Medicaid eligibility. If countable income exceeds the base SSI benefit, then SSI eligibility is suspended. After 12 consecutive months of suspension, the person is formally terminated from the SSI program. If a person loses SSI eligibility, he or she may, depending on the state, also lose Medicaid eligibility. Section 1619(b) of the Social Security Act protects Medicaid eligibility for people who lose their SSI eligibility due to earned income only. There is no protection for those who lose eligibility based on unearned income, such as Social Security benefits. Some analysts have proposed that people who become ineligible for SSI due to an increased special minimum benefit remain eligible for Medicaid. Another possible remedy would be to increase the dollar amount of the Social Security benefit that is disregarded in determining SSI eligibility. Other Considerations Some proposals would combine a years-of-coverage requirement with credits for a limited number of years of care-giving, unemployment, or poor health in the definition of a “year of coverage.” Providing those credits would require documentation of qualifying activities, which could increase Social Security’s administrative costs. Another important consideration is how disabled workers would be affected. Under Social Security Disability Insurance (SSDI) program rules, eligible disabled workers may receive benefits based on shorter work histories than retired workers; minimum benefit proposals could also treat disabled beneficiaries differently. Minimum benefit proposals are often structured to avoid conferring windfalls on people without a strong attachment to Social Security-covered employment. Such people may include recent immigrants or people who worked most of their careers in non-covered state or local government employment. Another question is whether spouses would be entitled to auxiliary benefits based on a worker’s minimum benefit. If policy makers wished to allow that but wanted to limit outlays, a limit could be placed on the couple’s total benefit. Minimum Benefit Options and Estimated Effects There have been numerous proposals for minimum benefits. Most fall into three categories: A benefit based on the number of years of work, similar to the Special Minimum PIA, A percentage increase in the regular benefit based on the number of years of work, or A fixed-dollar amount. SSA’s Office of the Chief Actuary, the Congressional Budget Office (CBO), and SSA’s Office of Retirement Policy have all published detailed analyses of the effects of various minimum benefit options. Options Based on Number of Years of Work One approach would be to reconfigure the Special Minimum PIA. Like the Special Minimum, the benefit would be based on the computed number of years of work, which would be defined as taxable earnings above a threshold. A beneficiary would receive the minimum benefit if it was higher than the standard benefit. For example, the National Academy of Social Insurance developed an option that would provide beneficiaries who worked for 30 years with a benefit equivalent to 125% of the poverty line. A year of work was defined as earning four quarters of coverage. The minimum benefit would phase down proportionally for workers with less than 30 years but more than 10 years of earnings. SSA’s Office of the Chief Actuary estimated that when fully phased in, this provision would increase total benefits by almost 2%. (A variation of this option would count up to eight years of care for children under the age of 5 as years of coverage and would increase total benefits by slightly more than 2%.) SSA’s Office of Retirement Policy found that in 2050, the option (without an adjustment for childcare years) would increase benefits for 16% of beneficiaries and for a third of the poorest fifth of beneficiaries. Of those affected, about 40% would have their benefit increase by more than a fifth. Similar provisions to reconfigure the Special Minimum PIA were included in proposals developed by the Commission on Fiscal Responsibility and Reform and the (Rivlin-Domenici) Debt Reduction Task Force. The Fiscal Commission proposed redefining a year of coverage as a year in which four quarters of coverage are earned and setting the minimum PIA for workers with 30 years of coverage equal to 125% of the monthly poverty level. That benefit level would have been indexed to prices for eight years and then to wages. The Rivlin-Domenici task force proposed defining a year of coverage as a year in which a worker either earned 20% of the old law maximum or had a child in care, setting the minimum PIA for 30 years of coverage equal to 133% of the poverty level, indexing benefits to wages, and limiting benefits to workers with more than

Jun 23, 2014

High-Frequency Trading: Background, Concerns, and Regulatory Developments

High-frequency trading (HFT) is a broad term without a precise legal or regulatory definition. It is used to describe what many characterize as a subset of algorithmic trading that involves very rapid placement of orders, in the realm of tiny fractions of a second. Regulators have been scrutinizing HFT practices for years, but public concern about this form of trading intensified following the April 2014 publication of a book by author Michael Lewis. The Federal Bureau of Investigation (FBI), Department of Justice (DOJ), Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Office of the New York Attorney General, and Massachusetts Secretary of Commerce have begun HFT-related probes. Critics of HFT have raised several concerns about its impact. One criticism relates to its generation of so-called phantom liquidity, in which market liquidity that appears to be provided by HFT may be fleeting and transient due to the posting and then almost immediate cancellation of trading orders. Another concern is that HFT firms may engage in manipulative strategies that involve the use of quote cancellations. In addition, some observers allege that HFT firms are often involved in front-running whereby the firms trade ahead of a large order to buy or sell stocks based on nonpublic market information about an imminent trade. Another criticism is that HFT has increased the level of potential market systemic risk whereby shocks to a small number of active HFT traders could then detrimentally affect the entire market. A related concern is whether HFT could exacerbate market volatility. These concerns have percolated since the “Flash Crash” of May 6, 2010, when the Dow Jones Industrial Average (DJIA) fell by roughly 1,000 points in intraday trading—the largest one-day decline in the history of the DJIA. The crash was analyzed in an investigative report by the SEC and CFTC which, among other factors, looked at the role HFT may have played. The report determined that HFT was not the cause but may have exacerbated the crash. Another area of criticism is that HFT often involves two-tiered markets in which HFT firms pay extra for the right to access data feeds or to collocate their servers within exchanges’ servers—all of which is designed to give some traders an advantage over others. HFT’s supporters argue that the increased trading provided by HFT adds market liquidity and reduces market volatility. They contend that HFT is a technological innovation that is the latest evolutionary stage in a long history of securities market making and assert that HFT has reduced the bid-ask spreads in stock trading, thereby lowering trading costs. Congressional interest in HFT and the Flash Crash has manifested itself in the 113th Congress both legislatively and in the congressional oversight of the SEC and CFTC. Legislatively, S. 410 (Harkin), H.R. 880 (DeFazio), and H.R. 1579 (Ellison) would levy taxes on various financial trades, including trades conducted by HFT traders. H.R. 2292 (Markey) would require the CFTC to provide a regulatory definition of HFT in the derivatives markets it oversees and require those who do HFT to register with the CFTC. In June 2014, SEC Chairman Mary Jo White announced that in response to concerns over “aggressive, destabilizing trading strategies in vulnerable market conditions,” the agency was pursuing several HFT-related reform proposals, including requiring unregistered HFT firms to register with the SEC. This report provides an overview of HFT in the equities and derivatives markets regulated by the SEC and CFTC. It also examines the Flash Crash of 2010 and the role that HFT may have played as well as recent regulatory developments.

Jun 19, 2014

Disposal of Unneeded Federal Buildings: Legislative Proposals in the 113th Congress

Real property disposal is the process by which federal agencies identify and then transfer, donate, or sell real property they no longer need. Disposition is an important asset management function because the costs of maintaining unneeded properties can be substantial, consuming financial resources that might be applied to long-standing real property needs, such as repairing existing facilities, or other pressing policy issues, such as reducing the national debt. Despite the expense, federal agencies hold thousands of unneeded and underutilized properties. Agencies have argued that they are unable to dispose of these properties for several reasons. First, there are statutorily prescribed steps in the disposal process that can take months to complete. Second, agencies are often required to complete major repairs or environmental remediation before properties are ready for disposal—steps for which agencies lack funding. Third, key stakeholders in the disposal process—including local governments, non-profit organizations, and businesses—are often at odds over how to dispose of properties. In addition, Congress may be limited in its capacity to conduct oversight of the disposal process because it currently lacks access to reliable, comprehensive real property data. Four bills have been introduced in the 113th Congress that propose significant changes to the existing real property disposal system. The Federal Real Property Asset Management Reform Act of 2013 (S. 1398), would establish an expedited disposal program under which 200 properties would be exempt from time-consuming, statutory disposal requirements. In addition, S. 1398 would expand the role of an interagency workgroup, the Federal Real Property Council, to set disposal goals for agencies and monitor their progress in meeting those goals. The bill would also increase oversight of agency disposal activities by requiring the Administrator of the General Services Administration (GSA) to establish a real property database available to the public at no cost. The Excess Federal Building and Property Disposal Act of 2013 (H.R. 328) would establish an expedited disposal program under which the 15 unneeded federal properties with the highest fair market value would bypass statutory disposal requirements and be offered for sale immediately. H.R. 328 would also require the GSA Administrator to establish a real property database available to the public at no cost and provide a report to Congress on the progress each landholding agency has made in reducing its unneeded property. Two similar, but not identical, versions of the Civilian Property Realignment Act (H.R. 695, S. 1715) have been introduced. Both bills would have the same overarching structure. They would centralize the disposal process by establishing a Civilian Property Realignment Commission, which would work with agencies to develop a list of disposal recommendations to the President. If the President approved the recommendations, then they would be sent to Congress. If Congress passed a joint resolution of approval, then agencies would be required to implement the recommendations; if a joint resolution of approval was not passed, then the realignment process would end for the fiscal year.

Jun 16, 2014

NASA Appropriations and Authorizations: A Fact Sheet

Jun 4, 2014

Export-Import Bank: Overview and Reauthorization Issues

This report provides: (1) a general background of Ex-Im Bank; (2) a discussion of the international context of the Bank; (3) analysis of key issues that Congress may consider in a reauthorization debate; and (4) the congressional outlook on Ex-Im Bank.

Jun 3, 2014

Federal Building and Facility Security: Frequently Asked Questions

This report discusses the security of federal government buildings and facilities that affect not only the daily operations of the federal government but also the health, well-being, and safety of federal employees and the public.

May 28, 2014

Navy LX(R) Amphibious Ship Program: Background and Issues for Congress

This report provides background information and issues for Congress on the LX(R) amphibious ship program, a Navy program to build a new class of 11 amphibious ships.

May 21, 2014

Treatment of Noncitizens Under the Affordable Care Act

This report provides information regarding the treatment of noncitizens under the Patient Protection and Affordable Care Act (ACA) including definitions of "lawfully present," the health insurance mandate, exchanges, and ACA changes to Medicaid. It also discusses the verification of alien status under the ACA and related legislation in the 113th Congress.

May 21, 2014

Legislative Branch: FY2015 Appropriations

This report discusses the legislative branch appropriations bill that provides funding for the Senate, House of Representatives, Joint Items, Capitol Police, Office of Compliance, Congressional Budget Office (CBO), Architect of the Capitol (AOC), Library of Congress (LOC) -- including the Congressional Research Service (CRS) -- Government Printing Office (GPO), Government Accountability Office (GAO), and Open World Leadership Center.

May 20, 2014

Water Infrastructure Financing: Proposals to Create a Water Infrastructure Finance and Innovation Act (WIFIA) Program

This report discusses the "Water Infrastructure Finance and Innovation Act," or WIFIA, program, which is one legislative option to finance water infrastructure projects.

May 16, 2014

Deployable Federal Assets Supporting Domestic Disaster Response Operations: Summary and Considerations for Congress

This report discusses deployable federal assets, which generally refers to specially-trained federal employees whose mission is to provide on-scene assistance to communities by supporting disaster response.

May 16, 2014

U.S. Foreign Trade in Services: Trends and U.S. Policy Challenges

May 15, 2014

How Social Security Benefits Are Computed: In Brief

This report discusses how Social Security benefits are currently computed, including information about eligibility, earnings, cost-of-living adjustments, factors that can affect benefit levels, and benefits for dependents.

May 12, 2014

Community Development Block Grants and Related Programs: A Primer

The Community Development Block Grant (CDBG) program, administered by the Department of Housing and Urban Development (HUD), was first authorized by Title I of the Housing and Community Development Act of 1974, P.L. 93-383 (42 U.S.C. 5301, et seq.). The program is one of the largest and longest-standing federal block grants in existence, annually allocating billions of dollars in federal assistance to state and local governments in support of local neighborhood revitalization, housing rehabilitation, and community and economic development efforts. During the program’s 40-year existence, Congress has allocated approximately $145 billion in CDBG formula grants to help state and local governments undertake these activities. The block grant nature of the program provides recipient jurisdictions fairly substantial administrative discretion. Funds are awarded by formula to so-called “entitlement communities” and states, who act as pass-through agents awarding funds to small communities unable to meet the minimum population threshold for entitlement status. During FY2013, approximately 1,237 entitlement communities and states qualified for a direct allocation of funds. Grant funds may be used to undertake any of 27 categories of eligible activities, including the acquisition, demolition, and sale of real property; the construction of public facilities; the undertaking of public services; historic preservation; energy conservation; and the provision of assistance to for-profit and not-for-profit entities in support of private-sector job creation. Although communities and states are given great discretion and flexibility in the selection of activities to be funded, the program’s governing statute requires that all activities meet one of three national objectives. Eligible activities must: principally benefit low or moderate income persons; aid in preventing or eliminating slums or blight; or address an imminent threat to the health and safety of residents. In addition, the act quantifies the “principally low and moderate income persons” (LMI) benefits national objective by requiring each entitlement community and state to expend in the aggregate, over a one-, two-, or three-year period, at least 70% of its CDBG allocation on activities that principally benefit low and moderate income persons. Before undertaking program activities, a recipient of funds must develop a consolidated plan assessing its current housing and non-housing community development conditions and it must propose a plan to address the community’s housing and community development needs. Grant recipients are also required to submit to HUD an annual performance report detailing progress that has been made in achieving proposed outcomes and identifying the status of activities identified in its annual plan. In addition to the CDBG formula portion of the program, HUD administers a number of smaller grant and loan guarantee programs intended to support or augment the activities and objectives of the larger CDBG formula grant program. These programs support regional planning, the reclamation of brownfields, rural housing, and the provision of technical assistance to community development corporations and community housing development organizations. Critics have contended that many of these programs duplicate the activities of the CDBG formula grant program. This report is intended as a primer to acquaint the reader with a basic understanding of CDBG and related programs. In-depth policy discussions and funding history may be found in other CRS products, including CRS Report R43208, Community Development Block Grants: Funding Issues in the 113th Congress, and CRS Report R43394, Community Development Block Grants: Recent Funding History. This report will be updated as events warrant.

Apr 30, 2014

Navy TAO(X) Oiler Shipbuilding Program: Background and Issues for Congress

This report provides background information and issues for Congress on the TAO(X) oiler shipbuilding program, a program to build a new class of fleet oilers for the Navy. The report discusses the issue for Congress which is whether to approve, reject, or modify the Navy's funding requests and acquisition strategy for the TAO(X) program.

Apr 25, 2014

National Special Security Events: Fact Sheet

Major federal government or public events that are considered to be nationally significant may be designated by the President—or his representative, the Secretary of the Department of Homeland Security—as National Special Security Events (NSSEs). These events include presidential inaugurations, presidential nominating conventions, major sporting events, and major international meetings. The U.S. Secret Service was designated as the lead federal agency responsible for coordinating, planning, exercising, and implementing security for National Special Security Events by P.L. 106-544, December 19, 2000.

Apr 24, 2014