CRS Reports

On July 9, 2018, President Donald J. Trump announced the nomination of Judge Brett M. Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) to fill retiring Justice Anthony M. Kennedy’s seat on the Supreme Court of the United States. Nominated to the D.C. Circuit by President George W. Bush, Judge Kavanaugh has served on that court for more than twelve years. In his role as a Circuit Judge, the nominee has authored roughly three hundred opinions (including majority opinions, concurrences, and dissents) and adjudicated numerous high-profile cases concerning, among other things, the status of wartime detainees held by the United States at Guantanamo Bay, Cuba; the constitutionality of the current structure of the Consumer Financial Protection Bureau; the validity of rules issued by the Environmental Protection Agency under the Clean Air Act; and the legality of the Federal Communications Commission’s net neutrality rule. Since joining the D.C. Circuit, Judge Kavanaugh has also taught courses on the separation of powers, national security law, and constitutional interpretation at Harvard Law School, Yale Law School, and the Georgetown University Law Center. Prior to his appointment to the federal bench in 2006, Judge Kavanaugh served in the George W. Bush White House, first as associate and then senior associate counsel, before becoming assistant and staff secretary to the President. Before his service in the Bush Administration, the nominee worked in private practice at the law firm of Kirkland & Ellis, LLP for three years and served in the Office of the Independent Counsel and the Office of the Solicitor General. Judge Kavanaugh began his legal career with three federal clerkships—two for judges on the federal courts of appeals and one for the jurist he is nominated to succeed, Justice Kennedy. Judge Kavanaugh is a graduate of Yale College and Yale Law School. Judge Kavanaugh’s nomination to the High Court is particularly significant as he would be replacing Justice Kennedy, who was widely recognized as the Roberts Court’s median vote. Justice Kennedy was often at the center of legal debates on the Supreme Court, casting decisive votes on issues ranging from the powers of the federal government vis-à-vis the states, to separation-of-powers disputes, to key civil liberties issues. Accordingly, a critical question now before the Senate as it considers providing its advice and consent to the President’s nomination to the High Court is how Judge Kavanaugh may view the many legal issues in which Justice Kennedy’s vote was often determinative. In this vein, understanding Judge Kavanaugh’s views on the law is one method to gauge how the Supreme Court might be affected by his appointment. In attempting to ascertain how Judge Kavanaugh could influence the High Court, however, it is important to note at the onset that, for various reasons, it often is difficult to predict accurately a nominee’s likely contributions to the Court based on his or her prior experience. That said, the nominee is a well-known jurist with a robust record, composed of both judicial opinions and non-judicial writings, in which he has made his views on the law and the role of the judge fairly clear. Central to the nominee’s judicial philosophy is the concept of judicial formalism and a belief that the “rule of law” must be governed by a “law of rules.” In addition, Judge Kavanaugh has endorsed the concept of the judge as a neutral “umpire.” In order to achieve this vision of neutrality, the nominee’s legal writings have emphasized (1) the primacy of the text of the law being interpreted, (2) an awareness of history and tradition, and (3) adherence to precedent. Applying these principles, Judge Kavanaugh’s views on several discrete legal issues are readily apparent, including administrative law, environmental law, freedom of speech, national security, the Second Amendment, and separation of powers. At the same time, perhaps because of the nature of the D.C. Circuit’s docket, less is known about the nominee’s views on other legal issues, including business law, civil rights, substantive due process, and takings law. This report provides an overview of Judge Kavanaugh’s jurisprudence and discusses his potential impact on the Court if he were to be confirmed to succeed Justice Kennedy. In particular, the report focuses upon those areas of law where Justice Kennedy can be seen to have influenced the High Court’s approach to certain issues or served as a fifth and deciding vote on the Court, with a view toward how Judge Kavanaugh might approach these same issues if he were to be elevated to the High Court. Of particular note, the report includes an Appendix with several tables that summarize the nominee’s rate of authoring concurring and dissenting opinions relative to his colleagues on the D.C. Circuit, and how Judge Kavanaugh’s opinions as an appellate judge have fared upon review by the Supreme Court.

Aug 21, 2018

IF10951

Substance Abuse Prevention, Treatment, and Research Efforts in the Military

Aug 17, 2018

IF10950Intelligence and National Security

Toward the Creation of a U.S. “Space Force”

Aug 16, 2018

LSB10188

When Does Double Prosecution Count as Double Jeopardy?

Aug 16, 2018

R45290Health Policy

Medicare Coverage of End-Stage Renal Disease (ESRD)

End-stage renal disease (ESRD) is the last stage of chronic kidney disease (CKD), which is the gradual decrease of kidney function over time. Individuals with ESRD have substantial and permanent loss of kidney function and require either a regular course of dialysis (a process that removes harmful waste products from an individual’s bloodstream) or a kidney transplant to survive. In 1972, Congress enacted legislation allowing qualified individuals with ESRD under the age of 65 to enroll in the federal Medicare health care program (Social Security Amendments of 1972; P.L. 92-603). The legislation marked the first time that individuals were allowed to enroll in Medicare based on a specific medical condition rather than on age. Medicare benefits for ESRD beneficiaries, including those under the age of 65 who qualify based on the disease, include a thrice-weekly dialysis treatment and coverage for kidney transplant. There is an initial waiting period for coverage for ESRD patients under the age of 65, and coverage for such enrollees terminates 12 months after a patient ends dialysis or after 36 months of follow-up care (including immunosuppressive medications) after a kidney transplant. Many beneficiaries with ESRD also require Medicare services to treat related, chronic health conditions, such as diabetes or heart disease. Because Medicare beneficiaries with ESRD have higher-than-average health care costs, they account for about 7% of Medicare fee-for-service (FFS) spending, while making up about 1% of total program enrollment (FFS and managed care combined). In total, FFS Medicare covers about three-fourths of all U.S. medical spending to treat ESRD. Over the years, Congress has enacted a number of changes to Medicare ESRD-related benefits in an effort to improve the quality of services and control program costs. For example, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA; P.L. 110-275) instituted a “bundled” payment system for ESRD dialysis providers, which took effect in 2011. The 21st Century Cures Act (CURES; P.L. 114-255) will allow Medicare-eligible individuals with ESRD to enroll in Medicare Part C Medicare Advantage (MA) managed care plans, beginning in 2021. Currently, ESRD patients are not allowed to enroll in most MA plans, with the exception of some special-needs plans. As a result, ESRD patients do not have access to some of the enhanced benefits offered by MA providers. This report provides background on the ESRD Medicare benefit, including information about the disease, Medicare enrollment criteria, covered services, other health care coverage for ESRD, and the Medicare reimbursement policy. The report concludes with a discussion of outstanding payment and coverage issues in ESRD care.

Aug 16, 2018

IF10745Health Policy

Emergency Use Authorization and FDA’s Related Authorities

Aug 13, 2018

R45288Economic Policy

Military Child Development Program: Background and Issues

The Department of Defense (DOD) operates the largest employer-sponsored childcare program in the United States, serving approximately 200,000 children of uniformed servicemembers and DOD civilians, and employing over 23,000 childcare workers, at an annual cost of over $800 million. DOD’s child development program (CDP) includes a combination of accredited, installation-based, government-run, full-time pre-school and school-aged care in Child Development Centers (CDCs) and subsidized care in Family Care Centers (FCCs) or through private providers under the Fee Assistance program. Childcare services are part of a broader set of quality of life benefits that make up the total compensation package for military personnel and certain DOD civilians. The Department has argued that these childcare benefits help support their recruiting, retention, and readiness goals and that there is generally a high level of satisfaction among servicemembers who use DOD childcare services. Moreover, military family advocacy groups have largely supported existing childcare benefits and have also called for expanding awareness of, access to, operating hours for, and improving or enhancing other aspects of military childcare services. While there has been broad support for DOD’s CDP since its inception, the questions of what benefits should be provided to military servicemembers and their families, how these benefits should be structured, and what resources should be directed to these benefits are issues for Congress when considering the annual defense budget authorization and appropriation.

Aug 10, 2018

R45286Economic Policy

Glider Kit, Engine, and Vehicle Regulations

On October 25, 2016, the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration jointly published the second phase of greenhouse gas (GHG) emissions and fuel efficiency standards for medium- and heavy-duty vehicles and engines. The Phase 2 rule affects commercial long-haul tractor-trailers, vocational vehicles, and heavy-duty pickup trucks and vans. It phases in between model years 2018 and 2027. Under the rulemaking, EPA proposed a number of changes and clarifications for standards respecting “glider kits” and “glider vehicles.” A glider kit is a chassis for a tractor-trailer with a frame, front axle, interior and exterior cab, and brakes. It becomes a glider vehicle when an engine, transmission, and rear axle are added. Engines are often salvaged from earlier model year vehicles, remanufactured, and installed in the glider kit. The final manufacturer of the glider vehicle (i.e., the entity that assembles the parts) is typically a different entity than the original manufacturer of the glider kit. Glider kits and glider vehicles are produced arguably for purposes such as allowing the reuse of relatively new powertrains from damaged vehicles. The Phase 2 rule contains GHG and criteria air pollution emission standards for glider vehicles. The rule sets limits for glider vehicles similar to those for new trucks, with some exemptions. Under the rulemaking, EPA and various commentators argued that glider vehicles should be considered new because the glider market had recently become distorted. In the decade leading up to the rulemaking, sales of glider vehicles increased by an order of magnitude—from several hundred annually to several thousand or more. EPA and various commentators interpreted this change to be more than an attempt to replace damaged chassis, seeing it instead as an attempt by glider vehicle assemblers to circumvent various federal regulations. At the time, the older model year engines being used in glider vehicles were not required to meet current EPA emission standards for nitrogen oxide and particulate matter (which began in 2007 and took full effect in 2010), nor did they need to abide by some other federal regulations, including the Department of Transportation’s requirements on electronic logging devices and electronic stability control and the Internal Revenue Service’s excise taxes. With respect to pollution requirements, the Phase 2 rulemaking had estimated that NOx and PM emissions from glider vehicles using pre-2002 engines (prior to exhaust aftertreatment requirements) were 20-40 times higher than current engines. Subsequent to the Phase 2 rulemaking, EPA received petitions for reconsideration for, among other provisions, the glider requirements. On November 16, 2017, EPA (under Administrator Scott Pruitt) proposed to repeal the emission standards and other requirements for heavy-duty glider vehicles, glider engines, and glider kits, arguing that EPA lacks the authority to regulate them under the Clean Air Act. On July 26, 2018, EPA (under acting Administrator Andrew Wheeler) stated that it would “move as expeditiously as possible on a regulatory revision regarding the requirements that apply to the introduction of glider vehicles into commerce to the extent consistent with statutory requirements and due consideration of air quality impacts.” A rule has not been finalized. Some in Congress have supported the Trump Administration’s efforts to reverse the standards and provide relief to the affected glider vehicle assembler industry. However, EPA’s efforts to delay and repeal the rule have prompted criticism from other trucking industry officials, some state air agencies, environmentalists, and other lawmakers who fear that increasing production of glider vehicles could result in a fractured vehicle market and significantly higher in-use emissions of air pollutants associated with a host of adverse human health effects, including premature mortality.

Aug 10, 2018

R45287Foreign Affairs

Private Bills: Procedure in the House

A private bill is one that provides benefits to specified individuals (including corporate bodies). Individuals sometimes request relief through private law when administrative or legal remedies are exhausted, but Congress seems more often to view private legislation as appropriate when no other remedy is available and when enactment would, in a broad sense, afford equity. From 1817 through 1971, most Congresses enacted hundreds of private laws, but since then, the number has declined significantly as Congress has expanded administrative discretion to deal with many of the situations that tended to give rise to private bills. Since 2007, four private laws have been enacted. Private provisions are also occasionally included in public legislation. The Senate considers private bills using the same procedures that are used to consider other legislation.

Aug 10, 2018

IF10400

Illicit Fentanyl and Mexico’s Role

Aug 9, 2018

IF10946European Affairs

The European Deterrence Initiative: A Budgetary Overview

Aug 8, 2018

R45284Health Policy

Title X Family Planning: Proposed Rule on Statutory Compliance Requirements

The Title X Family Planning Program (Title X), enacted in 1970, is the only domestic federal program devoted solely to family planning and related preventive health services. All 50 states, the District of Columbia, and the U.S. territories and Freely Associated States (collectively referred to as states) are eligible to apply for Title X grants, as are other public agencies and nonprofit organizations. Title X grants enable grantees to establish and operate family planning projects. A family planning project refers to a set of activities that a Title X grantee undertakes under its grant agreement to provide a broad range of family planning methods and services to Title X clients. (In 2016, Title X-funded clinics served 4 million clients.) Examples of Title X activities include provider-to-patient counseling, dissemination of educational materials, and the delivery of clinical services. Clinical services provided through Title X projects include contraceptive services and supplies, sexually transmitted disease testing and treatment, and preconception health care services. All services are confidential. Title X is administered through the Office of Population Affairs (OPA) in the Department of Health and Human Services (HHS). The program was appropriated $286.5 million for FY2018. Federal law (42 U.S.C. §300a-6) prohibits the use of Title X funds in projects “where abortion is a method of family planning.” According to OPA, family planning projects that receive Title X funds are closely monitored to ensure that federal funds are used appropriately and that funds are not used for prohibited activities such as for performing surgical abortion procedures. Under current program guidance, the abortion prohibition does not apply to all Title X grantees’ activities; instead, the prohibition applies only to activities that are part of the Title X project. A grantee’s abortion activities must be “separate and distinct” from the Title X project activities. On June 1, 2018, OPA published a proposed rule in the Federal Register, “Compliance with Statutory Program Integrity Requirements,” that would make several changes to federal Title X family planning regulations, including the following: Title X projects would no longer be required to offer pregnant clients the opportunity to receive abortion information, counseling, and referral upon request. Title X projects would be prohibited from referring patients to abortion services. Title X projects would be required to maintain physical and financial separation between their Title X projects and abortion-related activities. Several terms, including “family planning” and “low-income family,” would have new definitions. Criteria for awarding Title X Family Planning Services grants would be revised. Title X grant applicants and grantees would be subject to new reporting requirements. This proposed rule has sparked a congressional debate about the scope of Title X. The 115th Congress is debating the scope of Title X to determine whether providing an abortion-related service, such as referring a pregnant client to an abortion provider, should be a family planning service under Title X. In addition, Members of Congress are debating whether this proposed rule is a “gag rule”: an attempt to prevent some Title X clients from receiving adequate information that would permit them to make an informed decision about their health care treatment. This report summarizes the proposed rule’s major elements and explains how the proposed rule differs from current Title X rules and guidance. In addition, CRS provides HHS’s rationale for the components of the proposed rule, as well as selected commentary from key stakeholders in reaction to the proposed rule.

Aug 8, 2018

IF10633Aging Policy

Older Americans Act: Nutrition Services Program

Aug 7, 2018

IN10950Appropriations

Financial Services and General Government (FSGG) FY2019 Appropriations and Financial Regulatory Reform

Background On July 19, 2018, the House passed H.R. 6147, which included an FY2019 Financial Services and General Government (FSGG) appropriations bill (originally H.R. 6258) as Division B. The Senate passed a substitute version of H.R. 6147 on August 1, 2018, with the Senate FY2019 FSGG bill (originally S. 3107) as Division B. Although financial services are a focus of the FSGG bill, the bill does not include funding for most of the financial service regulators. Instead, this funding comes through a variety of sources, including fees or assessments on regulated institutions. (See CRS Report R43391, Independence of Federal Financial Regulators: Structure, Funding, and Other Issues.) Federal regulation of the banking industry is divided among the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of Comptroller of the Currency (OCC), and the Bureau of Consumer Financial Protection (CFPB or BCFP). Credit unions are regulated by the National Credit Union Administration (NCUA), and the housing government-sponsored enterprises are regulated by the Federal Housing Finance Agency (FHFA). None of these agencies receive their primary funding through the appropriations process. Federal securities regulation is divided between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), both of which are funded through appropriations bills. CFTC funding is appropriated from the general fund, whereas the SEC funding is offset through fees collected by the SEC. FSGG Financial Regulatory Legislative Provisions Although most funding is not provided by the FSGG bill, legislative provisions affecting financial regulation in general and some financial regulatory agencies specifically have often been included in past FSGG bills. Most of the provisions in Title IX of the House-passed FSGG bill (H.R. 6258/H.R. 6147, Division B) are similar or identical to provisions in other legislation that has passed the House both individually and as part of broader bills, particularly the Financial CHOICE Act (H.R. 10) and the JOBS and Investor Confidence Act of 2018 (S. 488 as amended by the House). Some of these provisions would amend the 2010 Dodd-Frank Act. The Senate FSGG bill (S. 3167/H.R. 6147, Division B) does not contain similar legislative provisions. Table 1 contains a full listing of sections from the House-passed FSGG bill Title IX and similar sections of H.R. 10, S. 488, and other individual legislation. Selected policy changes in the House-passed FSGG bill include the following: Capital formation. Some policymakers have concluded that changes in market trends require updated regulations governing capital access to securities markets, particularly for small- to medium-sized companies. The provisions in the FSGG bill generally aim to expand investor access to securities markets, reduce compliance costs, and promote financial intermediation. S. 488, much of which is contained in the FSGG bill, passed the House with close to unanimous support. CFPB structure. The Dodd-Frank Act created the CFPB with structural features that made it more independent than most other agencies. Congress has debated whether the current structure strikes the right balance between the desire for agency independence and accountability to Congress and the Administration. Title IX would reduce the CFPB’s independence by placing the CFPB under congressional appropriations, requiring congressional approval of “major rules” issued by the CFPB, and allowing the President to replace the head of the CFPB at will, in lieu of the current “for cause” removal, among other changes. Enhanced regulation. The Dodd-Frank Act created a new enhanced prudential regulatory regime for large banks and nonbank financial firms designated as systemically important. Title IX would modify the regime’s nonbank designation process, reduce the frequency of “living wills,” and eliminate nonbank stress test requirements, among other changes. Table 1. Financial Regulatory Provisions in the House-Passed FSGG Bill and Other Legislation Topic House-passed H.R. 6147, Division B, Title IX H.R. 10S. 488Individual Legislation Allows general solicitation for angel investorsSubtitle ASection 452Title IH.R.79 Expands information used in credit reporting Subtitle B — Title II H.R.435 Small M&A broker exemption Subtitle C Section 401 Title III H.R.477 Treatment of points and fees in mortgage regulation Subtitle D Section 506 — H.R.1153 Accredited investor definition Subtitle E Section 860 Title IV H.R.1585 Expand audit attestation requirement (SOX 404b) exemption Subtitle F Section 441 Title V H.R.1645 End banking for human traffickers Subtitle G — Title XXIII H.R.6069 Small Business Investment Company funding access Subtitle H — Title VII H.R.2364 Extends annual privacy notification exemption to auto financing companies Subtitle I — — H.R.2396 Limits on deposit account terminations Subtitle J Section 511 — H.R.2706 Expands investor outreach during IPO process Subtitle K Section 499 Title IX H.R.3903 Greater flexibility on rating agency exams Subtitle L Section 851 — H.R.3911 SEC subpoena required for source code disclosure Subtitle M Section 816 — H.R.3948 Family offices deemed accredited investors Subtitle N — Title X H.R.3972 SEC consolidated audit trail data protection Subtitle O Section 813 — H.R.3973 Changes to nonbank systemically important designation process Subtitle P — — H.R. 4061 SEC study of small rural business capital access Subtitle Q — Title XI H.R.4281 Fed-only jurisdiction over Volcker Rule Subtitle R — — H.R.4790 Reduced frequency of living will requirement for large banks Subtitle S Section 151 Title XII H.R.4292 Bank exam appeals expanded Subtitle T Section 536 — H.R.4545 Changes to mortgage settlement statement Subtitle U — — H.R.3978 Delays credit union capital rule Subtitle V — Title XVII H.R.5288 Creates dedicated CFPB Inspector General Subtitle W Section 713 — H.R. 3625 CFPB under appropriationsSubtitle XSection 712—— Nonbank stress test repealSubtitle Y—Title XVH.R.4566 Swaps margin exemption for interaffiliates Subtitle Z — — — Requires consistency in enhanced regulation Subtitle AA — — — Eliminates “for cause” removal protection for CFPB Director Subtitle BB Section 711(a)(1)(D) — — Congressional approval for “major” CFPB rules Subtitle CC Title III, Subtitle Ba — H.R. 26a Source: Congressional Research Service. Notes: M&A=Mergers and Acquisitions; SOX= Sarbanes Oxley Act (P.L. 107-204); IPO=Initial Public Offering. These bills would require congressional approval of major rules for other agencies as well.

Aug 7, 2018

IN10948Appropriations

The Electronic Logging Device (ELD) Controversy

In December 2017, after years of preparation, most commercial trucks were required to be equipped with an electronic logging device (ELD) that would automatically record how long the driver had been driving. There had been little controversy about this requirement during its two-year phase-in period, but after it took effect, portions of the commercial trucking industry began to complain about its impact. Pending legislation would exempt certain drivers from the mandate through FY2019. Most commercial drivers are paid by the mile, and so have an incentive to drive as much as possible. Studies indicate that drivers become less alert and responsive to changing conditions, and thus likelier to be involved in a crash, the more hours they drive in a day. To reduce the risk of driving while fatigued, the federal government has long limited the amount of time a commercial driver can drive in a day and over the course of a week. This Hours of Service (HOS) rule limits commercial truck drivers to 11 hours of driving within a period of 14 consecutive hours spent on-duty (after which the driver must have 10 hours off before returning to duty), and up to 60 hours of driving over the course of a week. The daily driving limit for truck drivers was raised from 10 to 11 hours in 2003 (but remains 10 hours for commercial bus drivers). For decades, the Hours of Service limits were enforced by having drivers fill in paper logs with the amount of time they spent driving each day. Given the incentives to exceed the daily limit on driving hours, and the ease of falsifying such information in paper logs drivers themselves maintained, enforcing the HOS rule was difficult. In anonymous surveys, a majority of commercial drivers admitted to violating the HOS rule at least occasionally. The National Transportation Safety Board and other safety advocates had long called for using an automated method of recording driving time to better enforce the HOS rule. In 2012 Congress mandated that trucks be equipped with ELDs, and in 2015 the Department of Transportation finalized a rule to that effect. Since the rule went into effect, certain sectors of the commercial trucking industry have complained that the new ELD mandate is causing problems. Perhaps the largest source of objection has been the agricultural trucking sector, particularly livestock haulers. Complaints typically point out that agricultural products are perishable, and that limits on the amount of time a driver can drive in a day can create situations in which cargo is put at risk. In hot conditions, having to stop short of a final destination when a driver runs out of driving time can put livestock at risk from heat or from having to be unloaded and reloaded. This can sometimes happen due to factors over which drivers have little or no control, particularly the amount of time spent waiting for a truck to be loaded or unloaded and traffic congestion. Although these complaints have arisen in the wake of the ELD mandate, the concerns pertain to the HOS rule, which was not changed by the ELD mandate. The installation of an electronic logging device merely makes it easier for federal and state inspectors to enforce the long-established HOS rule. Existing law provides agricultural truckers with exemptions from the HOS rules for certain circumstances. For example, when operating within 150 air miles of their origin point, drivers hauling agricultural products are exempt from the HOS rule, meaning there is no limit on how long they can drive in a day. Should they leave that 150 air-mile radius zone, they then become subject to the HOS rule, but the amount of time they spent driving within the 150 air-mile radius zone does not count against their daily driving limit. Drivers of trucks carrying agricultural products are still allowed to record their driving time in paper logs as long as they do not drive outside the 150 air-mile zone more than eight times in a 30-day period. If they drive outside the zone more often than that, they are required to use an ELD. Federal Motor Carrier Safety Administration officials note that many drivers have been unaware of these exemptions, and once informed of them their concerns about complying with the HOS and ELD rules have been greatly reduced. Congress also temporarily exempted livestock haulers from the ELD mandate through September 30, 2018. The FY2019 transportation appropriations bills passed by the Senate (Division D, Title I of H.R. 6147) and pending in the House (H.R. 6072) would extend this exemption through September 2019.

Aug 7, 2018

IN10953CRS Insights

Gun Control: 3D-Printed Firearms

In May 2013, Defense Distributed, a federally licensed firearms manufacturer, posted on its website computer assisted design (CAD) files for three dimensional-printing (3D-printing) of a single-shot, smoothbore, .380 caliber pistol that could be made almost entirely with non-metallic material. The design of this firearm, the “Liberator,” does not appear to violate the Undetectable Firearms Act of 1988 (18 U.S.C. §922(p)), because it includes the requisite amount of steel. This statute prohibits the manufacture, importation, transfer, or possession of any firearm that is [not] detectable to “walk-through metal detector[s]” calibrated to detect a security exemplar that resembles a handgun with the same electromagnetic signature as 3.7 ounces of stainless steel; or includes major components (barrels, slides, cylinders, frames, or receivers) that generate an [in]accurate image when inspected with “x-ray machines commonly used at airports.” The Liberator’s design arguably illustrates a possible shortcoming in this statute. Besides the cartridge casing and projectile (bullet), the only operable metallic part of the firearm is its firing pin. The pistol’s design includes a cavity that holds a steel block that is intended to meet the security exemplar detectability requirement described above; however, it is not an operable part of the firearm. The steel block is actually inserted into the cavity after the pistol frame is printed. In other words, it is not permanently embedded into the firearm. Consequently, it could be removed, perhaps allowing a criminal to evade security with an undetected, but still operable firearm. In May 2013, the Department of State (State) invoked a provision of the Arms Export Control Act (22 U.S.C. §2778) related to technology transfers and ordered Defense Distributed to remove those CAD files from its website. Defense Distributed complied, but it sued State in federal court, arguing that the order violated its First and Second Amendment rights. In April 2018, the parties entered into a settlement that would allow Defense Distributed to upload 3D printer files for firearms and parts, including an AR-15 lower receiver. A federal judge in Seattle, however, granted an emergency motion filed by eight states and the District of Columbia, temporarily blocking making these files available on the internet. Non-metallic firearms and, hence, firearms undetectable to metal detectors or unrecognizable to an inspector under an x-ray machines, could possibly be made from materials that are commonly available in most hardware stores, notwithstanding considerable issues related to performance, durability, and safety. The growing availability of “desktop” 3D printers, however, could make such endeavors more efficient and uniform, but perhaps not less costly. There is also the future possibility that issues related to performance, durability, and safety of non-metallic firearms could be overcome with the use of other non-metallic materials and additional improvements in 3D printers. Also known as additive manufacturing, 3D printers use CAD files to build an object one thin layer at a time, fusing each new layer to the previous layer in an iterative process. While 3D printers have generally become less expensive and commercially accessible, 3D-printer hardware and software capable of fabricating firearms barrels with rifled bores from steel are costly enough that industry experts contend that it is less expensive to produce firearms with computer numerical control (CNC) technology. CNC machines use CAD files to mill, turn, or carve objects from a solid piece of material, as well as drill or punch it, in a subtractive manufacturing process. Under current law, it is legally permissible for any person to build their own firearm, as long as the builder is not prohibited from possessing a firearm and does not build it with intent to sell it. Home-built firearms have been popularly dubbed as “do-it-yourself” (DIY) firearms. DIY firearms are sometimes referred to as “ghost guns,” because unlicensed firearms builders are not required to identify their firearms with a serial number and other markings, whereas licensed manufacturers are required to do so. The Bureau of Alcohol, Tobacco, Firearms and Explosives and others have suggested that the Attorney General might have sufficient authority under the 1934 National Firearms Act to regulate the Liberator under the designation of “any other weapon,” because the pistol is smoothbore. Today, pen, cane, umbrella, and belt buckle guns, as well as certain smoothbore, single-shot handguns, are regulated under this NFA designation. NFA firearms, like machine guns and those discussed above, are more strictly regulated than other firearms under the Gun Control Act of 1968 and must be registered with the Attorney General. Some Members of Congress have expressed concern that undetectable, untraceable firearms could proliferate with the growing availability of 3D printer technology, allowing criminals to circumvent the law and possibly breach security systems. Senators Bill Nelson, Richard Blumenthal, Ed Markey, and Representative Theodore Deutch introduced the 3D Gun Safety Act (S. 3304/H.R. 6649), a bill to prohibit the publication of 3D printer files for firearms. Senator Nelson and Representative Ruben Kihuen introduced the Undetectable Firearms Modernization Act (S. 533/H.R. 2033), a proposal to amend current law with regard to more advanced screening technologies and detection standards. Representative Adriano Espaillat introduced the Ghost Guns are Guns Act (H.R. 1278), a bill to amend the federal statutory definition of a firearm to include firearms parts kits. Senator Richard Blumenthal and Representative David Cicilline introduced the Untraceable Firearms Act of 2018 (S. 3300 and H.R. 6643), a bill to require all firearms be serialized and marked and major firearms components be wholly constructed of a material detectable to a metal detector. As of August 10, 2018, no further action has been taken on these bills. The National Rifle Association and National Shooting Sports Foundation, as well as other gun rights groups, maintain that current law adequately regulates firearms manufacturing, including 3D printing of firearms and parts. They maintain that 3D printing does not present a public safety risk, because criminals are not likely to incur the costs and efforts necessary to build firearms with 3D printer technology.

Aug 7, 2018

R45281National Defense

Iran’s Threats, the Strait of Hormuz, and Oil Markets: In Brief

The exchanges of threats between members of the governments of Iran and the United States, including the presidents of both countries, have again raised the specter of an interruption of shipping through the Strait of Hormuz (the Strait), a key waterway for the transit of oil and natural gas to world markets. In the first half of 2018, approximately 22 million barrels per day (bpd) of crude oil, condensate, and petroleum products, and over 300 million cubic meters per day in liquefied natural gas (LNG) exited the Strait, representing approximately 24% and 3% of global production, respectively. With the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA) on May 8, 2018, there may be increased potential for Congress to consider legislation regarding sanctions on Iran. A number of bills, mostly prior to the May 8 withdrawal, have been introduced in the 115th Congress targeting aspects of Iran’s leadership, military, and economy. It remains uncertain whether reinstated U.S. sanctions based on the U.S. unilateral exit from the JCPOA will damage Iran’s economy to the extent sanctions did during 2012-2015, when the global community was aligned in pressuring Iran.

Aug 6, 2018

IF10945Economic Policy

Maritime Fuel Regulations

Aug 6, 2018

R45279Economic Policy

Buprenorphine and the Opioid Crisis: A Primer for Congress

Buprenorphine is a medication used to treat adults addicted to opioids (it is also used in the treatment of pain). Buprenorphine’s effectiveness, safety, and availability in the treatment of opioid addiction are of considerable interest to policymakers seeking to address the ongoing opioid epidemic in the United States. Congressional actions taken in recent years to address the opioid crisis have included attempts to increase access to buprenorphine. This report addresses questions policymakers may have about the effectiveness of buprenorphine, the demand for buprenorphine, and access to buprenorphine. Effectiveness of Buprenorphine Overall, buprenorphine appears to be an effective medication for treatment of opioid dependence. When compared to other treatments for opioid addiction such as methadone, buprenorphine appeared equally as effective in promoting abstinence from drug use. Buprenorphine does not seem to retain individuals in treatment as well as methadone, however, though the reasons for this remain unclear. The research on buprenorphine suggests that it works better at higher daily doses (16mg or higher). The higher the dose of buprenorphine and the longer people used the drug, the more likely they were to remain in treatment, abstain from opioid use, and successfully complete treatment. Preliminary data suggest that buprenorphine may be safer and more cost effective than methadone; comparison of the safety and costs of buprenorphine with other treatments awaits further research. Demand for Buprenorphine Admissions to substance abuse treatment facilities involving prescription opioids nearly quadrupled between 2002 and 2014; in 2015 18% of individuals in need of treatment for opioid use disorders received it. In 2016, one-fifth (21.1%) of those with any opioid use disorder received specialty treatment, including 37.5% of those with heroin use disorder and 17.5% of those with prescription pain reliever use disorders. Despite marked increases in opioid abuse, deaths attributed to opioids, and related hospital admissions, the majority of individuals in need of treatment do not receive it. Access to Buprenorphine Buprenorphine is regulated differently when used to treat opioid use disorder than when used to treat pain. The Controlled Substances Act (CSA) limits who may prescribe (or administer or dispense) buprenorphine to treat opioid use disorders, and the circumstances under which they may do so. These limits have implications for how patients gain access to buprenorphine and how they pay for buprenorphine. Buprenorphine comes in different formulations, and these modes of administration have implications for how patients gain access to buprenorphine and how they pay for buprenorphine. As of May 1, 2018, the Substance Abuse and Mental Health Services Administration has implemented capacity for health providers to treat with buprenorphine almost 3,000,000 patients. Nonetheless, access to substance abuse treatment such as buprenorphine has not kept pace with the mounting rates of opioid addiction in the United States.

Aug 3, 2018

R45278Agricultural Policy

Chesapeake Bay Restoration: Background and Issues for Congress

The Chesapeake Bay (the Bay) is the largest estuary in the United States. It is recognized as a “Wetlands of International Importance” by the Ramsar Convention, a 1971 treaty about the increasing loss and degradation of wetland habitat for migratory waterbirds. The Chesapeake Bay estuary resides in a more than 64,000-square-mile watershed that extends across parts of Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, and the District of Columbia. The Bay’s watershed is home to more than 18 million people and thousands of species of plants and animals. A combination of factors has caused the ecosystem functions and natural habitat of the Chesapeake Bay and its watershed to deteriorate over time. These factors include centuries of land-use changes, increased sediment loads and nutrient pollution, overfishing and overharvesting, the introduction of invasive species, and the spread of toxic contaminants. In response, the Bay has experienced reductions in economically important fisheries, such as oysters and crabs; the loss of habitat, such as underwater vegetation and sea grass; annual dead zones, as nutrient-driven algal blooms die and decompose; and potential impacts to tourism, recreation, and real estate values. Congress began to address ecosystem degradation in the Chesapeake Bay in 1965, when it authorized the first wide-scale study of water resources of the Bay. Since then, federal restoration activities, conducted by multiple agencies, have focused on reducing pollution entering the Chesapeake Bay, restoring habitat, managing fisheries, protecting sub-watersheds within the larger Bay watershed, and fostering public access and stewardship of the Bay. Congress has authorized various programs and activities to restore the Chesapeake Bay, including the Chesapeake Bay Program (CBP), created in 1983. The CBP implements the Chesapeake Bay Agreement, a periodically renewed agreement between executives in the watershed states, a joint Bay state legislative body, and select federal agencies that aims to coordinate Bay restoration efforts. The most recent agreement was signed in 2014 (known as the 2014 Chesapeake Bay Watershed Agreement) and set a series of restoration goals and actions to be completed by 2025. The 2014 Chesapeake Bay Watershed Agreement, like others in the past, is not binding. Other restoration plans—including the 2010 Chesapeake Bay Strategy for Protecting and Restoring the Chesapeake Bay Watershed (pursuant to President Obama’s 2009 Executive Order 13508), the U.S. Environmental Protection Agency’s 2010 Chesapeake Bay Total Maximum Daily Load, and a draft Comprehensive Plan from the U.S. Army Corps of Engineers—harmonize with the goals of the 2014 Chesapeake Bay Watershed Agreement and contain objectives for federal agencies and states. As work continues toward the 2025 restoration goals set by state and federal plans, Congress may consider what role the federal government plays in Chesapeake Bay restoration, if any. In considering the federal role in Chesapeake Bay restoration, Congress may weigh issues related to coordination of federal activities and federal agency authority, funding and total cost of activities, and the rate of progress toward restoration.

Aug 3, 2018

IF10940

The James Webb Space Telescope

Aug 3, 2018

IF10939Energy Policy

Gas Exporting Countries Forum (GECF): Cartel Lite?

Aug 2, 2018

IF10931Foreign Affairs

U.S.-EU Trade Relations

Aug 1, 2018

IF10937

Artificial Intelligence (AI) and Education

Aug 1, 2018

IF10464Foreign Affairs

United Nations Issues: Congressional Representatives to the UN General Assembly

Aug 1, 2018

R45277Health Policy

Health Savings Accounts (HSAs)

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

Jul 31, 2018

IN10943CRS Insights

Escalating Tariffs: Timeline and Potential Impact

Concerns over the U.S. trade deficit and trading partner trade practices have been a focus of the Trump Administration. Citing these concerns, the President has imposed tariffs under three U.S. laws that allow the Administration to impose trade restrictions based on certain criteria unilaterally: (1) Section 201 (Table 1) on U.S. imports of washing machines and solar products; (2) Section 232 () on U.S. imports of steel and aluminum, and potentially autos and uranium, and (3) Section 301 (Table 3) on U.S. imports from China. In 2017, U.S. imports of goods subject to the additional tariffs, which range from 10%-50%, totaled $80 billion (Table 4), a figure that would increase should additional proposed tariffs go into effect (Figure 1). While the tariffs may benefit some import-competing U.S. producers, they are also likely to increase costs for downstream users of imported products and some consumer prices. The Administration is likely using the tariffs in part to pressure affected countries into broader trade negotiations, such as the recently announced U.S.-EU trade liberalization talks, but it is unclear what specific outcomes the Administration is seeking. Figure 1. Trump Administration Tariffs and Affected Imports / Source: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas. Notes: Based on 2017 import values. Increased U.S. import tariffs may reduce demand for imports lowering annual import values. Congress delegated aspects of its constitutional authority to regulate foreign commerce to the President through these trade laws. These statutory authorities allow presidential action, based on agency investigations and other criteria, to impose import restrictions to address specific concerns (see text box). They have been used infrequently in the past two decades, in part due to the 1995 creation of the World Trade Organization (WTO) and its enforceable dispute settlement system. Prior to this Administration, U.S. import restrictions were last imposed under these trade laws in 1982 for Section 232, 2001 for Section 301, and 2002 for Section 201. U.S. Laws Related To Trump Administration Trade Actions Section 201 of the Trade Act of 1974 – Allows the President to impose temporary duties and other trade measures if the U.S. International Trade Commission (ITC) determines a surge in imports is a substantial cause or threat of serious injury to a U.S. industry. Section 232 of Trade Expansion Act of 1962 – Allows the President to take action to adjust imports of products the Department of Commerce finds to be threatening to impair U.S. national security. Section 301 of Trade Act of 1974 – Allows the United States Trade Representative (USTR) to suspend trade agreement concessions or impose import restrictions if it determines a U.S. trading partner is violating trade agreement commitments or engaging in discriminatory or unreasonable practices that burden or restrict U.S. commerce. Increasing U.S. tariffs or imposing other import restrictions through these laws potentially opens the United States to complaints that it is violating its WTO and free trade agreement (FTA) commitments. Several U.S. trading partners, including Canada, China, Mexico, and the European Union have initiated dispute settlement proceedings and imposed retaliatory tariffs in response. The retaliatory tariffs in effect cover approximately $60 billion of U.S. annual exports, based on 2017 export data (Table 5). Retaliation may be amplifying the potential negative effects of the U.S. tariff measures. Economically, retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Lost market access resulting from the retaliatory tariffs may compound concerns raised by many U.S. exporters that the United States increasingly faces higher tariffs than some competitors in foreign markets as other countries proceed with trade liberalization agreements eliminating tariffs, such as the recently signed EU-Japan FTA. Negative effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. For example, in response to China’s retaliation against U.S. Section 301 tariffs, USTR has proposed counter-retaliation tariffs covering an additional $200 billion of U.S. imports, doubling the current tariff coverage and potentially affecting approximately half of U.S. annual imports from China. Additional actions by the Administration could result in considerably larger potential trade effects. On March 23, 2018, the Commerce Department initiated a new Section 232 investigation on U.S. auto and auto parts imports. Motor vehicles and parts accounted for $361 billion of U.S. imports in 2017. The EU, which accounts for more than $50 billion of U.S. motor vehicle and parts imports, has reportedly threatened comparable retaliatory measures. The globally integrated nature of the industry could complicate the impact of the tariffs. For example, affiliates of foreign motor vehicle firms operating in the United States exported more than $49 billion (nearly $70 billion including wholesale trade) in 2015. Although the auto investigation remains ongoing, the Administration has stated it will not impose tariffs while the recently announced U.S.-EU trade talks are ongoing. On July 18, the Administration began a fourth Section 232 investigation on U.S. uranium imports. Many Members of Congress and U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President’s actions. While some U.S. stakeholders support the President’s use of unilateral trade actions, many have raised concerns, including the Chairs of the Ways and Means and Senate Finance Committees, about potential negative impacts. In July 2017, Congress passed a nonbinding resolution directing appropriations bill conferees to include language giving Congress a role in Section 232 determinations, and several Members have introduced legislation that would constrain the President’s authority (e.g., S. 3013 and S. 3266). As it debates the Administration’s import restrictions, Congress may consider the following: Delegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? Economic Implications and Escalation. The Administration’s tariffs imposed to date cover approximately 3% of annual U.S. goods and services imports; pending investigations and threatened further counter-retaliations could potentially increase this to nearly one-third. While most economists estimate that the current level of tariffs is unlikely to have major effects on the overall U.S. economy, these effects may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. The potential drag on economic growth could also be significant if tit-for-tat action escalates. What are the Administration’s objectives from the tariff increases and do potential benefits justify the potential costs? International Trading System. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing the retaliation violates trade agreement obligations. What are the risks to the international trading system of continued unilateral action? The tables below provide a timeline of key events related to each U.S. trade action, as well as the range of potential trade volumes affected by the U.S. tariffs and U.S. trading partners’ retaliations. In addition to tariffs, the President has imposed quotas, or quantitative limits on U.S. imports of certain goods from specified countries, as well as tariff-rate quotas (TRQs), for which one tariff applies up to a specific quantity of imports and a higher tariff applies above that threshold. Timeline and Status of U.S. Trade Actions Table 1. Section 201 Global Safeguard Investigations Key Dates 5/17/2017 – U.S. industry petition initiates ITC injury investigation on solar cells/modules. 6/5/2017 – U.S. industry petition initiates ITC injury investigation on large residential washers. 9/22/2017 – ITC makes affirmative solar cells/modules injury determination. 10/5/2017 – ITC makes affirmative large residential washers injury determination. 11/13/2017 – ITC submits report and recommended action on solar cells/modules to President. 12/4/2017 – ITC submits report and recommended action on large residential washers to President. 1/23/2018 – President proclaims actions on solar cells/modules and large residential washers, effective February 7, 2018. U.S. Import Restriction Solar Cells: 4-year TRQ with 30% above quota tariff, descending 5% annually. Solar Modules: 4-year 30% tariff, descending 5% annually. Large Residential Washers: 3-year TRQ, 20% in quota tariff descending 2% annually, 50% above quota tariff descending 5% annually. Large Residential Washer Parts: 3-year TRQ, 50% above quota tariff, descending 5% annually. Countries Affected Canada excluded from the duties on washers. Certain developing countries excluded if they account for less than 3% individually or 9% collectively of U.S. imports of solar cells or large residential washers, respectively. All other countries included. Current Status Effective February 7, 2018. Table 2. Section 232 Steel and Aluminum Investigations Key Dates 4/2017 – Commerce initiates investigations on effects on national security of U.S. steel (4/19) and aluminum (4/26) imports. President signs memoranda prioritizing steel and aluminum investigations. 1/2018 – Commerce submits steel (1/11) and aluminum (1/17) findings and recommendations to President. 3/8/2018 – President proclaims steel and aluminum duties, effective March 23, 2018, temporarily exempting Canada and Mexico. 3/22/2018 – President temporarily exempts Argentina, Australia, Brazil, South Korea and the European Union (EU) in addition to Canada and Mexico from steel and aluminum duties. 4/30/2018 – President permanently exempts South Korea from steel duties, based on a quota arrangement. South Korea’s exemption from aluminum duties expires. 5/31/2018 – President permanently exempts Argentina, Australia, and Brazil from steel duties, and Argentina and Australia from aluminum duties, based on quota arrangements. Brazil’s exemption from aluminum duties, and Canada, Mexico, and EU’s exemptions from steel and aluminum duties expire. U.S. Import Restriction Aluminum: 10% tariffs on specified list of aluminum imports effective indefinitely. Steel: 25% tariffs on specified list of steel imports effective indefinitely. Countries Affected Aluminum: Australia and Argentina* permanently exempted. Steel: Australia, Argentina*, Brazil*, and South Korea* permanently exempted. All other countries included. (*) Quantitative import restrictions imposed in place of tariffs. Current Status Effective March 23, 2018. (Retaliation also in effect, see Table 5) Table 3. Section 301 China Trade Barriers Investigation Key Dates 8/14/2017 – President directs USTR to determine whether it should investigate China’s laws, policies, practices, or actions affecting U.S. intellectual property and forced technology transfers. 8/18/2017 – USTR announces it will proceed with Section 301 case against China. 3/22/2018 – USTR releases Section 301 report and finds that China’s policies are “unreasonable or discriminatory, and burden or restrict U.S. commerce.” President signs memorandum proposing to: (1) implement tariffs on certain Chinese imports; (2) initiate a WTO dispute settlement case against China’s discriminatory technology licensing; and (3) propose new investment restrictions on Chinese efforts to acquire sensitive U.S. technology. 4/3/2018 – USTR releases proposed list of 1,300 tariff lines to be subject to 25% import tariff. 4/5/2018 – President directs USTR to consider additional list of Chinese imports to be subject to 25% tariff if China retaliates. 5/29/2018 – President Trump announces U.S. plan to proceed with Section 301 actions, including 25% tariff on $50 billion of U.S. imports from China. 6/15/2018 – USTR releases two-stage plan to impose 25% tariffs on approximately $50 billion of Chinese imports. 6/18/2018 – President directs USTR to propose a list of imports from China valued at $200 billion that would be subject to an additional 10% tariff if China retaliates against Section 301 tariffs, and an additional $200 billion if such retaliation occurs again. 7/10/2018 – USTR releases list of proposed imports subject to additional 10% tariff accounting for approximately $200 billion of U.S. imports in 2017. U.S. Import Restriction Stage 1 – 25% import tariff on 818 U.S. imports (final, approx. $34 billion) Stage 2 – 25% import tariff on 228 U.S. imports (proposed, approx. $16 billion). Stage 3 – 10% import tariff on 6,031 U.S. imports (proposed, approx. $200 billion). Countries Affected China Current Status Stage 1 – Effective July 6, 2018. Stage 2 – Proposed, hearing 7/24 to determine final list. Stage 3 – Proposed, hearing 8/20 to determine final list. (Retaliation also in effect, see Table 5) Potential Trade Affected Table 4. Proposed and Existing U.S. Import Restrictions U.S. Trade Action U.S. Imports (millions, 2017) Additional Tariff Potential Tariff Revenue* (millions, 2017) Effective Date Section 201 Solar Cells/ Modules $5,196 TRQ (0%, 30%)/ 30% $1,559 February 7, 2018 Large Washers/ Washer Parts $1,927 TRQ (20%, 50%)/ TRQ (0%, 50%) $964 February 7, 2018 Total $7,123 $2,523 Section 232 Aluminum $16,643 10% $1,664 March 23, 2018 Steel $23,369 25% $5,842 March 23, 2018 Total $40,012 $7,507 Section 301 China - Stage 1 $32,262 25% $8,066 July 6, 2018 China - Stage 2 $14,116 25% $3,529 TBD China - Stage 3 $197,214 10% $19,721 TBD Total $243,592 $31,316 Total in Effect $79,975 $18,095 Total Formally Proposed $293,421 $41,345 Source: Calculations by CRS based on trade data from U.S. Census Bureau and tariff data from Administration notifications. Notes: (*) Potential tariff revenue estimated using 2017 import values. This does not account for potential fluctuations in demand resulting from the tariffs or other variables. It is useful for comparing the magnitude of the various tariff actions but should not be used to estimate actual tariff collection. TRQ tariff revenue estimated assuming all imports are subject to over quota tariff. Table 5. Proposed and Existing Retaliatory Actions Retaliatory Trade Action U.S. Exports (millions, 2017) Additional Tariff Potential Tariff Revenue* (millions, 2017) Effective Date Section 201 South Korea (Solar and Washers) $1,377** TBD $474** 2021 China (Solar and Washers) $654** TBD $220** 2021 Japan (Solar) $83** TBD $25** 2021 Total $2,114 $719 Section 232 Canada $12,748 10-25% $1,920 July 1, 2018 European Union (EU) – Stage 1 $3,204 10-25% $781 June 25, 2018 EU – Stage 2 $4,239 10-50% $931 2021 Mexico $3,691 7-25% $730 Partial-June 5, Full-July 5, 2018 Russia $3,008** TBD $515** TBD China $2,969 15-25% $645 April 2, 2018 Japan $1,911** TBD $440** TBD Turkey $1,788 5-40% $267 June 21, 2018 India $1,396 10-50% $240 June 21, 2018 Total $33.834 $6,469 Section 301 China – Stage 1 $33,834 25% $8,459 July 6, 2018 China – Stage 2 $14,345 25% $3,586 TBD Total $48,179 $12,045 Total in Effect $59,630 $13,042 Total Formally Proposed $85,247 $19,233 Source: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications. Notes: (*) Potential tariff revenue estimated using 2017 import values. This does not account for potential fluctuations in demand resulting from the tariffs or other variables. It is useful for comparing the magnitude of the various tariff actions but should not be used to estimate actual tariff collection. (**) Retaliation announcements did not include a product list or specific tariff values. Retaliatory export and tariff value estimated based on retaliation commensurate with U.S. tariff actions.

Jul 31, 2018

IN10945CRS Insights

The World Trade Organization (WTO): U.S. Participation at Risk?

Trump Administration Approach to the WTO In a break from past administrations, the Trump Administration has expressed doubt over the value of the World Trade Organization (WTO) to the U.S. economy. The United States was a key architect of the WTO—the 164-member international organization established in 1995 that oversees global trade rules and trade liberalization negotiations, and resolves trade disputes. In late June, media reports suggested that President Trump was considering withdrawing the United States from the WTO; U.S. officials have since said talks of withdrawal are “premature” and an “exaggeration.” Congress has recognized the WTO as the “foundation of the global trading system,” and plays a direct legislative and oversight role over WTO agreements. As a candidate, President Trump asserted that WTO trade deals are a “disaster” and that the U.S. should “renegotiate” or “pull out.” Since taking office, the Administration has continued to express skepticism toward the value of multilateral agreements, preferring bilateral negotiations to address “unfair trading practices” of other countries. In addition, “reform of the multilateral trading system” is a stated trade policy objective. One concern U.S. officials voice is that the WTO is not equipped to deal effectively with the unique, state-driven features of the Chinese economy. In addition, they criticize the ability of emerging markets to claim special treatment under WTO flexibilities for developing countries. The Administration has suggested that the United States might ignore WTO rulings that are not in the U.S. favor, amid concerns that dispute settlement infringes on U.S. sovereignty. The U.S. is currently blocking new appointments to the WTO’s Appellate Body (the seven-member body responsible for appeals)—a practice that began under the Obama Administration; with more judicial terms set to expire, the AB could no longer meet its quorum after December 2019. Some officials have downplayed U.S. retreat from the WTO. In the view of WTO Deputy Director-General Alan Wolff, “the U.S. is actively engaged in a whole panoply of areas.” At the 11th WTO ministerial, U.S. Trade Representative Lighthizer acknowledged the WTO does “an enormous amount of good” and expressed U.S. support for initiatives on e-commerce and fisheries subsidies. Some U.S. frustrations with the WTO are not new and many are shared by other trading partners. But the Administration’s overall approach has spurred new questions regarding the future of U.S. leadership (and participation) in the WTO, as well as the role of Congress in U.S. trade policy. In particular, recent U.S. actions to raise tariffs against major trading partners unilaterally and to potentially obstruct the functioning of the dispute settlement system, have prompted concerns that the United States may undermine the effectiveness and credibility of the institution that it helped to create. WTO Successes and Challenges The WTO succeeded the 1947 General Agreement on Tariffs and Trade (GATT), created out of U.S. post-war efforts with other developed countries to foster an open, rules-based trading system. The GATT was established in part to lessen incentives for countries to resort to tit-for-tat trade protectionism. As the WTO describes itself, it is not simply a “free trade” institution, but “a system of rules dedicated to open, fair, and undistorted competition.” The WTO now covers 98% of global trade. Successive rounds of trade liberalization have supported the significant expansion of trade, with the average most-favored nation (MFN) applied tariff of WTO members falling from 25% in 1994 to less than 10% today (Figure 1). Greater trade openness and investment flows have helped drive economic growth and raise living standards across economies. The WTO also created a binding dispute settlement system, which has processed more than 500 disputes, with the aim of enforcing its rules, managing trade tensions, and ensuring a stable system. Figure 1. Average applied MFN tariffs / Source: Map created by CRS using 2017 WTO data. The WTO has also faced challenges as a consensus-driven organization. With a few exceptions, members have been unable to bridge differences and agree to comprehensive new trade and market opening rules—which require unanimous approval—raising questions over the institution’s relevance as a negotiating body. Countries have increasingly turned to trade deals outside the WTO and plurilaterals to tackle new issues. The dispute settlement system is increasingly under strain due to the growing number and complexity of cases. Perhaps at the root of WTO challenges are questions about its ability to adapt to new realities of the global economy; as the EU put it: “in essence, since 1995 the world has changed; the WTO has not.” These challenges have raised the stakes for members to find new strategies to safeguard and strengthen the trading system. U.S. WTO Participation The United States participates in the WTO for several reasons. Reconsidering U.S. leadership of or membership in the organization would potentially raise a number of issues for congressional consideration. U.S. leadership U.S. historical leadership of the global trading system has ensured a seat at the table to shape the agenda in important areas that both advance and defend U.S. interests. The United States played a major role shaping GATT/WTO negotiations and rulemaking, many of which reflect U.S. laws and norms. It was a leading advocate in the Uruguay Round (1986-1994) for expanding negotiations to include services and intellectual property rights (IPR), key sources of U.S. competitiveness, as well as binding dispute settlement to ensure new rules were enforceable. The U.S. has indicated strong interest in ongoing initiatives that are gaining some momentum, such as new WTO disciplines for e-commerce. A growing question is whether the WTO would flounder for lack of U.S. leadership, or whether other WTO members like the EU and China would step up to greater roles. In an effort to address growing trade tensions, in mid-July, EU and Chinese officials jointly called for new WTO reforms. The EU issued a proposal for WTO modernization, including rules on subsidies, a new approach to development, and dispute settlement reforms. Many of these ideas arguably are in line with current and past U.S. negotiating objectives. Market access and rules WTO membership encourages the United States to maintain an open market, while ensuring access to markets abroad. WTO rules are built on the principle of nondiscrimination: MFN treatment means a member’s lowest tariff or best trade concession must be granted to all members (with some exceptions), and national treatment means domestic products cannot be treated more favorably than foreign products. Absent WTO membership, remaining members would no longer be obligated to grant the U.S. MFN status under WTO agreements. Consequently, the U.S. could face significant disadvantages in other markets, including China, the EU and Japan, as members without bilateral free trade agreements (FTA) with the United States could raise tariffs or other trade barriers at will. Since joining the WTO, China’s average MFN tariff on U.S imports (trade-weighted) fell from 17.1% to 6.3%. More than 60% of U.S. trade is with non-FTA partners and thus relies solely on terms negotiated under the WTO. WTO rules also restrict members’ ability to use quotas, regulations, trade-related investment measures, or subsidies in ways that discriminate or disadvantage U.S. goods and services; as well as require members to respect U.S. IPR. Resolving disputes The WTO has provided the United States a forum for resolving disputes and holding countries accountable for their trading practices. The U.S. has been the largest user of WTO dispute settlement, initiating 122 disputes—with a relatively high success rate—challenging China over several issues including export restrictions, agricultural support, and IPR enforcement. The United States also has had the largest number of cases filed against it, as a respondent in 147 disputes. In particular, one concern of U.S. officials is several WTO findings that certain aspects of U.S. trade remedy measures are inconsistent with U.S. WTO obligations. Adverse rulings cannot compel the U.S. to change its laws, but a panel may authorize countries to retaliate if the U.S. maintains measures in violation of WTO rules. Without recourse to WTO dispute settlement, the United States could face unrestrained retaliation. In turn, the U.S. could potentially pursue more unilateral enforcement outside the WTO—as in the past through mechanisms like Section 301 and again recently. Many argue this approach is less effective at addressing trade barriers and mitigating trade tensions. Role of Congress Many analysts view U.S. withdrawal from the WTO as unlikely, in part given the potential role of Congress, which holds constitutional authority over foreign commerce. There has been broad debate among experts over whether the President has authority to withdraw unilaterally from trade agreements without congressional consent. The agreement establishing the WTO specifies any member may withdraw following six months of written notice. Congress established the statutory basis for U.S. WTO membership in the Uruguay Round Agreements Act (URAA; P.L. 103-465)—WTO agreements take effect in domestic law only through implementing legislation. Congress has also included provisions in trade promotion authority (TPA) setting forth objectives for WTO negotiations. Sec. 125(b) of the URAA sets procedures for congressional disapproval of WTO participation. It specifies that Congress’s approval of the WTO agreement shall cease to be effective only if Congress enacts a joint resolution calling for withdrawal. Congress may vote every five years on withdrawal; resolutions were introduced in 2000 and 2005, however neither passed.

Jul 31, 2018

IN10944Appropriations

Status of FY2019 LHHS Appropriations

Congress has begun consideration of the FY2019 appropriations bill for the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS). This is the largest ($1.0 trillion in FY2018) of the 12 annual appropriations bills, when accounting for both mandatory and discretionary funding. The House and Senate appropriations committees have each reported their respective versions of the FY2019 LHHS bill (H.R. 6470 and S. 3158), but neither bill has received floor consideration as of the date of this report. Scope of the Bill The LHHS bill provides annually appropriated budget authority for the Department of Labor (DOL), the majority of the Department of Health and Human Services (HHS) (except for the Food and Drug Administration, the Indian Health Service, and the Agency for Toxic Substances and Disease Registry, which are funded in other bills), the Department of Education, and more than a dozen related agencies, including the Social Security Administration (SSA). Discretionary appropriations account for about 19% of total funds in the LHHS bill, yet this bill is typically the largest single source of nondefense discretionary funding for the federal government. In general, mandatory funding represents about 81% of the total LHHS bill, supporting annually appropriated entitlements such as Medicaid and Supplemental Security Income. Discretionary spending programs tend to receive the most attention during the appropriations process because this process controls amounts provided to these programs; the authorizing process generally controls amounts needed for mandatory spending programs. FY2019 Congressional Action on LHHS The House Appropriations Committee’s LHHS subcommittee approved its draft bill on June 15. The full committee markup was held on July 11, and the bill was ordered to be reported that same day (30-22). The bill was subsequently reported to the House on July 23 (H.R. 6470). The committee report H.Rept. 115-862) includes a detailed table summarizing the funding provided in the bill and reserved in report language. The Senate Appropriations Committee’s LHHS subcommittee approved its draft bill on June 26. The full committee markup was held on June 28. The committee approved the bill (30-1) and reported the bill that same day (S. 3158). The committee report (S.Rept. 115-289) includes a detailed table summarizing the funding provided in the bill and reserved in report language. Table 1 compares FY2019 LHHS discretionary appropriations proposed by the House and Senate committee bills to FY2018 enacted levels. All the amounts in this table are drawn from Congressional Budget Office estimates and represent current-year budget authority subject to discretionary spending limits. The table displays regular appropriations as well as a funding total that includes the upward adjustments to the spending limits that are allowed under the Budget Control Act (“adjusted appropriations”). (In the case of the LHHS bill, these adjustments may occur for “Program Integrity” and “Emergency Requirements” funding.) Relative to FY2018, discretionary LHHS appropriations (excluding funds provided as an emergency requirement) would be relatively flat under the FY2019 House committee bill (+$5 million). The FY2019 Senate committee bill, meanwhile, would increase regular discretionary LHHS appropriations by roughly $2 billion (+1%). Table 1. FY2018 Enacted and FY2019 Proposed LHHS Discretionary Appropriations Current-Year Discretionary Budget Authority Subject to Spending Limits (in billions of dollars) FY2018 Enacted FY2019 House Cmte. (H.R. 6470)FY2019 Senate Cmte. (S. 3158) Regular Appropriations177.100177.105179.289 Adjustments: Program Integrity1.8961.8971.897 Emergency Requirements3.9870.0000.000 Adjusted Appropriations182.983179.002181.186 Source: Table prepared by CRS based on Congressional Budget Office estimates (see FY2018 Enacted, FY2019 House Committee, and FY2019 Senate Committee). Notes: Regular appropriations reflect current-year discretionary budget authority subject to spending limits. Adjusted appropriations include discretionary funds for which special rules apply with regard to the spending limits, including certain funds for program integrity activities and (where applicable) provided as emergency requirements. Amounts in this table do not include funds provided under certain authorities in the 21st Century Cures Act (P.L. 114-255) that are exempt from discretionary spending limits ($996 million for FY2018 enacted and $711 million for the FY2019 committee bills). Additional Resources For more information on the status of FY2019 appropriations as a whole, see the CRS Appropriations Status Table. Reports addressing key funding questions for the programs and agencies funded by the LHHS appropriations bill are available on the CRS website. Table 2. Selected CRS LHHS Appropriations Contacts Department or Agency Name Phone Email Labor David Bradley 7-7352 [email protected] Health and Human Services Karen Lynch Jessica Tollestrup 7-6899 7-0941 [email protected] [email protected] Education Cassandria Dortch 7-0376 [email protected] Social Security Administration William Morton 7-9453 [email protected]

Jul 31, 2018

LSB10180

Family Separation at the Border and the Ms. L. Litigation

Jul 31, 2018

R45270Appropriations

Child Welfare Funding in FY2018

Child welfare services are intended to prevent the abuse or neglect of children; ensure that children have safe, permanent homes; and promote the well-being of children and their families. For FY2018, an estimated $9.5 billion in federal support was made available for child welfare purposes. Comparable funding for FY2017 is estimated at $9.3 billion. At least $100 million of the FY2018 increase was provided as discretionary appropriations intended to address the impact of parental substance abuse on children and the child welfare system and to help implement the Family First Prevention Services Act (Div. E., Title VII, of P.L. 115-123). About $37 million in additional discretionary funding was provided to enable the U.S. Department of Health and Human Services to provide full incentive payments to states that are increasing the rate at which children who are otherwise expected to remain in temporary foster care are placed in permanent adoptive families or with a legal guardian. Finally, mandatory funding made available under the Title IV-E foster care, prevention, and permanency program is expected to increase by some $111 million in FY2018. The bulk of this increase is expected to provide ongoing assistance to children who leave foster care for permanent adoptive or guardianship families. Spending on foster care is not projected to grow and Title IV-E funding for prevention activities (as provided for by the Family First Prevention Services Act) is not available before FY2020. FY2018 began on October 1, 2017, but full funding levels for it were not determined until enactment, on March 23, 2018, of the Consolidated Appropriations Act, 2018 (P.L. 115-141). In the interim, funding to continue child welfare programs in FY2018 was provided via short-term funding measures, including P.L. 115-56 (through December 8, 2017), P.L. 115-90 (through December 22, 2017), P.L. 115-96 (through January 19, 2018), P.L. 115-120 (through February 8, 2018), and P.L. 115-123 (until March 23, 2018).

Jul 30, 2018

IN10941Appropriations

Commodity Credit Corporation: Q&A

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

Jul 27, 2018

R45275Agricultural Policy

The House and Senate 2018 Farm Bills (H.R. 2): A Side-by-Side Comparison with Current Law

Congress sets national food and agriculture policy through periodic omnibus farm bills that address a broad range of farm and food programs and policies. The 115th Congress has the opportunity to establish the future direction of farm and food policy, because many of the provisions in the current farm bill (the Agricultural Act of 2014, P.L. 113-79) expire in 2018. On June 21, 2018, the House voted 213-211 to approve H.R. 2, the Agriculture and Nutrition Act of 2018, an omnibus farm bill that would authorize farm and food policy for FY2019-FY2023. The Senate passed its version of H.R. 2, the Agriculture Improvement Act of 2018, also a five-year bill, on June 28, 2018, on a vote of 86-11. In terms of cost, the Congressional Budget Office (CBO) score of July 24, 2018, of the programs in both bills with mandatory spending—such as nutrition programs, commodity support programs, major conservation programs, and crop insurance—over a 10-year budget window (FY2019-FY2028) amounts to $867 billion in the Senate-passed bill and $865 billion in the House-passed bill. These cost projections compare with CBO’s baseline scenario of an extension of existing 2014 farm bill programs with no changes of $867 billion. In both the House and Senate versions of H.R. 2, most existing programs would be extended through FY2023. Overall, the bills provide a relatively large measure of continuity with the existing framework of farm and food programs even as they would modify numerous programs, alter the amount and type of program funding that certain programs receive, and exercise discretion not to reauthorize some others. Both bills would extend commodity support programs largely along existing lines while modifying them in different ways. For instance, the House bill could raise the effective reference price for crops enrolled in the Price Loss Coverage program (PLC) under certain market conditions. It would also amend payment limits and the adjusted gross income (AGI) limit for eligibility for farm program payments and increase the number of producer exemptions from payment and income limits. In contrast, the Senate bill would leave payment limits unchanged while lowering the AGI limit for payment eligibility. The Senate would also leave PLC unchanged while adopting changes to the Agricultural Risk Coverage program (ARC) that could enhance its appeal as a program option. Both bills would amend disaster assistance programs but under different approaches. Both bills would also rename the dairy program and expand coverage choices for milk producers, and both bills extend the sugar program with no changes. The House and Senate bills would reauthorize the Supplemental Nutrition Assistance Program (SNAP) for five years, and both bills include polices intended to improve error and fraud detection. Among their differences, the House bill includes multiple changes to who is eligible for SNAP and the calculation of benefits, which are not included in the Senate bill. The House bill includes major changes to work requirements, while the Senate bill would make changes that are minor by comparison. Within the conservation title, the two bills would raise the acreage limit on enrollment in the Conservation Reserve Program (CRP), with the House bill setting a higher limit than the Senate does. Among other differences, the House bill would repeal the Conservation Stewardship Program (CSP), whereas the Senate bill would extend CSP but lower the limit on acreage enrollment. The House bill also increases funding for the Environmental Quality Incentives Program (EQIP), while the Senate bill reduces funding for EQIP. Within the credit title, both bills increase the maximum loan amounts for the U.S. Department of Agriculture’s guaranteed farm ownership loans and guaranteed farm operating loans. The Senate bill would also raise the limits for direct farm ownership loans and direct farm operating loans, whereas the House bill would not. The miscellaneous title of both bills establishes an animal disease preparedness program and a vaccine bank, although they diverge over funding. The Senate bill includes a number of provisions that are intended to facilitate the possible commercial cultivation of industrial hemp, while the House bill would amend certain regulatory requirements that apply to industrial hemp. For rural communities, the House bill would authorize the Secretary of Agriculture to reprioritize certain loan and grant programs and take other actions to respond to specific health emergencies, and it would require the Secretary to promulgate minimum acceptable standards for broadband service. The Senate bill would establish priorities for awarding loans and grains for rural broadband projects and add a new program on substance abuse education and prevention. Both bills extend most bioenergy programs, but the House bill places them within the title on rural development and infrastructure, while the Senate bill maintains a separate energy title. Moreover, while the House bill would provide discretionary funding for these programs but no mandatory funding, the Senate bill would provide both mandatory and discretionary funding.

Jul 27, 2018

IF10935Economic Policy

Technology Service Providers for Banks

Jul 26, 2018

TE10026Energy Policy

Background on Renewable Identification Numbers under the Renewable Fuel Standard

Jul 25, 2018

R45267Agricultural Policy

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

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

Jul 23, 2018

R45269American Law

Judicial Opinions of Judge Brett M. Kavanaugh

On July 9, 2018, President Trump announced the nomination of Judge Brett M. Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) to succeed Supreme Court Justice Anthony M. Kennedy, who is scheduled to retire from active status on July 31, 2018. Judge Kavanaugh has served as a judge on the D.C. Circuit since May 30, 2006. He has also sat, by designation, on judicial panels of the U.S. Court of Appeals for the Eighth Circuit and the U.S. Court of Appeals for the Ninth Circuit, and also served on three-judge panels of the U.S. District Court for the District of Columbia. During his tenure on the bench, Judge Kavanaugh has adjudicated more than 1,500 cases, almost all while a member of either a three-judge or en banc panel of the D.C. Circuit. In part because of the D.C. Circuit’s location in the nation’s capital and the number of statutes providing it with special or even exclusive jurisdiction to review certain agency actions, legal commentators generally agree that the D.C. Circuit’s docket, relative to the dockets of other circuits, contains a greater percentage of nationally significant legal matters. Cases adjudicated by the D.C. Circuit are more likely to concern the review of federal agency action or civil suits involving the federal government than cases adjudicated in other circuits, while the D.C. Circuit docket has a lower percentage of cases involving criminal matters, prisoner petitions, or civil suits between private parties. Arguably, Judge Kavanaugh’s authored opinions provide the greatest insight into the nominee’s judicial approach, as a judge’s vote or decision to join an opinion authored by a colleague may not necessarily represent full agreement with a colleague’s views. This report provides a tabular listing of 306 cases in which Judge Kavanaugh authored a majority, concurring, or dissenting opinion. The opinions are categorized into three tables: Table 1 identifies 148 opinions authored by Judge Kavanaugh on behalf of a unanimous panel; Table 2 contains 47 controlling opinions authored by Judge Kavanaugh in which one or more panelists wrote a separate opinion; and Table 3 lists 111 cases where Judge Kavanaugh wrote a concurring or dissenting opinion (decisions where Judge Kavanaugh wrote both the controlling opinion and a separate concurrence are included in this final table). Opinions are identified and briefly discussed in each table in reverse chronological order based on where the case appears in the Federal Reporter. The opinions are also categorized by their primary legal subjects (e.g., administrative law, criminal law & procedure, environmental law, federal courts & civil procedure, labor & employment law, and national security). While this report identifies and briefly describes judicial opinions authored by Judge Kavanaugh during his time on the federal court, it does not analyze the implications of his judicial opinions or suggest how he might approach legal issues if appointed to the Supreme Court. Those matters will be discussed in a forthcoming CRS report. Key CRS products related to the Supreme Court vacancy and Judge Kavanaugh’s nomination are collected in CRS Legal Sidebar LSB10160, Supreme Court Nomination: CRS Products, by Andrew Nolan.

Jul 23, 2018

R45265Appropriations

U.S. Fish and Wildlife Service: An Overview

The U.S. Fish and Wildlife Service (FWS), an agency within the Department of the Interior (DOI), is the principal federal agency tasked with the conservation, protection, and restoration of fish and wildlife resources across the United States and insular areas. This report summarizes the history, organizational structure, and selected functions of FWS and provides an overview of the agency’s appropriations structure. The report describes the actions Congress has taken to shape FWS’s structure and functions over time and notes selected issues of interest to Congress. The current structure of FWS is the result of more than 150 years of agency and departmental reorganizations. FWS began as two agencies: the Office of the Commission of Fish and Fisheries (established as an independent agency in 1871) and the Bureau of the Biological Survey (established in 1885 as an outgrowth of the U.S. Department of Agriculture’s [USDA’s] Division of Entomology). These two entities evolved into the Bureau of Fisheries (in the Department of Commerce) and the Bureau of Biological Survey in USDA. They were consolidated and established within DOI as the Fish and Wildlife Service in 1939. After that time, the service was further restructured on several occasions through both presidential reorganizations and congressional statutes. The most recent major reorganization took place in 1970, although FWS has continued to evolve pursuant to the passage of additional laws and the addition of new responsibilities. In its current form, FWS contains national, regional, and field offices spread across the United States, including its headquarters in the Washington, DC, metropolitan area, eight regional headquarter offices, and other field and FWS-administered sites. Pursuant to authorizing statutes, FWS is responsible for a multitude of fish- and wildlife-related activities. These activities include administering the National Wildlife Refuge System; managing migratory bird species; protecting endangered and threatened species; restoring fish species and aquatic habitats; enforcing fish, wildlife, and conservation laws; conducting international conservation efforts; and disbursing financial and technical assistance to states, territories, and Indian tribes for wildlife and sport fish restoration and other activities. For example, FWS is responsible for the enforcement of several wildlife-related statutes and international agreements, such as the Endangered Species Act (16 U.S.C. §§1531 et seq.), the Lacey Act (16 U.S.C. §§3371-3378 and 18 U.S.C. §§42-43), and the Migratory Bird Treaty Act (16 U.S.C. §§703-712). The service administers the National Wildlife Refuge System pursuant to the National Wildlife Refuge System Administration Act (16 U.S.C. §§668dd-668ee), as amended, which includes more than 800 million acres of lands and waters that FWS administers through either primary or secondary jurisdiction, including 566 national wildlife refuges as well as other service lands and waters. FWS also manages more than 70 national fish hatcheries, fish health centers, and fish technology centers and oversees the Aquatic Animal Drug Approval Partnership Program. In addition, FWS coordinates both domestic and international conservation activities, including administering multiple international conservation statutes. FWS also is responsible for disbursing financial assistance pursuant to the Federal Aid in Wildlife Restoration Act (known as the Pittman-Robertson Act; 16 U.S.C. §§669 et seq.) and the Federal Aid in Sport Fish Restoration Act (commonly known as the Dingell-Johnson Act; 16 U.S.C. §§777 et seq.), as well as State and Tribal Wildlife grants. From FY2014 through FY2018, Pittman-Robertson and Dingell-Johnson allocations together provided more than $1 billion annually to states, territories, and DC for wildlife and sport fish restoration and hunter education. FWS is funded through a mix of discretionary and mandatory appropriations. Discretionary appropriations, which averaged $1.5 billion annually from FY2009 through FY2018, regularly have been allocated across nine accounts and have supported many of the agency’s essential functions. FWS mandatory funding, which averaged $1.2 billion annually from FY2009 through FY2018, predominately has been derived through revenues generated from excise taxes on hunting- and fishing-related equipment. Mandatory funding supports land acquisition and financial assistance activities, including a significant portion of FWS’s grant-making activities to states and insular areas.

Jul 20, 2018

R45266Foreign Affairs

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

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

Jul 20, 2018

IF10930Foreign Affairs

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

Jul 20, 2018

IN10932CRS Insights

“Duck Boat” Accident Highlights Gap in Regulation

On July 19, 2018, an amphibious vehicle capsized during a sudden storm on a lake in Branson, MO, killing at least 17 passengers. The accident highlights gaps and discrepancies in federal safety regulations affecting amphibious passenger vehicles (APVs), more widely known as “duck boats.” Duck boats are tourist vehicles designed both to drive on roads and operate as boats in the water. These vehicles host thousands of tours for more than 1 million passengers annually. The original vehicles were built during World War II to deliver cargo from ships at sea directly to the shore, and often to evacuate injured military personnel. Some of the vehicles in use today have been refurbished, but others were built more recently. Many duck boats are operated under a license from Ride the Ducks International (RTDI), a private company, but there may be others operated independently as well. These vehicles have been involved in a number of accidents in recent years. In September 2015, a duck boat was involved in a crash with a commercial bus on a bridge in Seattle, killing five passengers. APV accidents occurred in Boston in 2016 and Philadelphia in 2010, and include an earlier incident in Seattle in 2001 and a sinking with 13 fatalities in Arkansas in 1999. These unique vehicles answer to several regulators. Because they operate in the open water of harbors and rivers, they are considered small passenger vessels, and the U.S. Coast Guard must inspect them for seaworthiness and certify the drivers as vessel captains. Since APVs also carry passengers on land, they are subject to federal commercial vehicle regulations enforced by the Federal Motor Carrier Safety Administration. Commercial vehicle inspections typically are conducted by state agencies. In addition, drivers must be certified by state officials as commercial vehicle drivers. And because the vehicles were rebuilt for commercial service, they must comply with certain federal motor vehicle standards established by the National Highway Traffic Safety Administration (NHTSA). After investigating the 2015 APV crash in Seattle, the National Transportation Safety Board (NTSB), an independent federal agency, issued an accident report with recommendations to enhance the safe operation of these vehicles. Among NTSB’s recommendations, NHTSA should classify all APVs as non-over-the-road buses and make newly manufactured APVs subject to applicable federal motor vehicle safety standards; NHTSA should separately adopt Coast Guard rules about cargo loads and passenger seating limits; and the Coast Guard should ensure that APV operators instruct passengers not to wear seat belts when the vehicle is operated in the water. The NTSB report also had specific recommendations for Ride the Ducks International after finding that it had failed to fully address known mechanical defects that resulted in the 2015 crash. It appears that some of the recommended regulatory changes have not been implemented. It is unclear whether implementation of all the NTSB recommendations would have reduced the severity of the accident in Branson. It remains the case that no single state or federal agency has ultimate responsibility for APV safety.

Jul 20, 2018

R45268American Law

Department of Homeland Security Appropriations: FY2019

This report provides an overview and analysis of FY2019 appropriations for the Department of Homeland Security (DHS). The primary focus of this report is on congressional direction and funding provided to DHS through the appropriations process. It includes an Appendix with definitions of key budget terms used throughout the suite of Congressional Research Service reports on homeland security appropriations. It also directs the reader to other reports providing context for specific component appropriations. As part of an overall budget that the Office of Management and Budget (OMB) estimated to be $74.88 billion, the Trump Administration requested $47.43 billion in adjusted net discretionary budget authority through the appropriations process for DHS for FY2018. The request amounted to a $0.29 billion (0.6%) decrease from the $47.72 billion in annual appropriations enacted for FY2018 through the Department of Homeland Security Appropriations Act, 2018 (P.L. 115-141, Division F). The Administration also requested discretionary funding for DHS components that does not count against discretionary spending limits and is not reflected in the adjusted net discretionary budget authority total. The Administration requested an additional $6.65 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the Budget Control Act (P.L. 112-25; BCA), and in the budget request for the Department of Defense (DOD), $165 million in Overseas Contingency Operations designated funding (OCO) from the Operations and Maintenance budget of the U.S. Navy. On June 21, 2018, the Senate Committee on Appropriations reported out S. 3109, the Department of Homeland Security Appropriations Act, 2019, accompanied by S.Rept. 115-283. Committee-reported S. 3109 included $48.33 billion in adjusted net discretionary budget authority for FY2019. This was $901 million (1.9%) above the level requested by the Administration, and $611 million (1.3%) above the enacted level for FY2018. The Senate committee-reported bill included the Administration-requested levels for disaster relief funding, and included the OCO funding in an appropriation to the Coast Guard, rather than as a transfer from the U.S. Navy. This report will be updated as the FY2019 appropriations process continues.

Jul 20, 2018