CRS Reports

Nuclear Negotiations with North Korea: In Brief

Some analysts have suggested that, in response to the accelerated pace of North Korea’s nuclear and missile testing programs and its continued threats against the United States and U.S. allies, the United States might engage in an aggressive negotiation strategy. Since the early 1990s, successive U.S. Presidents have faced the question of whether to negotiate with the North Korean government to halt Pyongyang’s nuclear program and ambitions. Questions for policymakers include the utility, timing, scope, and goals of diplomatic talks with Pyongyang. The United States has engaged in four major sets of formal nuclear and missile negotiations with North Korea: the bilateral Agreed Framework (1994-2002), the bilateral missile negotiations (1996-2000), the multilateral Six-Party Talks (2003-2009), and the bilateral Leap Day Deal (2012). In general, the formula for these negotiations has been for North Korea to halt, and in some cases disable, its nuclear or missile programs in return for economic and diplomatic incentives. While some of the negotiations have shown progress, North Korea has continued to advance its nuclear and missile programs. Congress possesses a number of tools to influence whether and how intensely the Administration pursues negotiations with North Korea. The tools include oversight hearings, resolutions expressing congressional sentiment, restrictions on the use of funds for negotiations and the required diplomatic team through the appropriations process, and legislation that attaches or relaxes conditions and requirements for implementation of agreements. Past Congresses have influenced U.S.-DPRK talks and in several cases affected the implementation of the negotiated agreements. Congress’s role has been particularly significant in negotiations over the provision of U.S. energy and humanitarian assistance to North Korea through the appropriations process. This report summarizes past nuclear and missile negotiations between the United States and North Korea, also known by its formal name, the Democratic People’s Republic of Korea (DPRK), and highlights some of the lessons and implications that can be drawn from these efforts. Other CRS products address various aspects of U.S. policy toward North Korea, including those listed below. CRS Report R41259, North Korea: U.S. Relations, Nuclear Diplomacy, and Internal Situation, coordinated by Emma Chanlett-Avery CRS In Focus IF10467, Possible U.S. Policy Approaches to North Korea, by Emma Chanlett-Avery and Mark E. Manyin CRS Report R41438, North Korea: Legislative Basis for U.S. Economic Sanctions, by Dianne E. Rennack CRS Report R40095, Foreign Assistance to North Korea, by Mark E. Manyin and Mary Beth D. Nikitin CRS Report R44994, The North Korean Nuclear Challenge: Military Options and Issues for Congress, coordinated by Kathleen J. McInnis CRS Report R44912, North Korean Cyber Capabilities: In Brief, by Emma Chanlett-Avery et al. CRS In Focus IF10472, North Korea’s Nuclear and Ballistic Missile Programs, by Steven A. Hildreth and Mary Beth D. Nikitin

Dec 4, 2017

The Foreign Agents Registration Act (FARA): A Legal Overview

In the wake of the 2016 election, concerns have been raised with respect to the legal regime governing foreign influence in domestic politics. The central law concerning the activities of the agents of foreign entities acting in the United States is the Foreign Agents Registration Act (FARA or Act). Enacted in 1938 to promote transparency with respect to foreign influence in the political process, FARA generally requires “agents of foreign principals” undertaking certain activities on behalf of foreign interests to register with and file regular reports with the U.S. Department of Justice (DOJ). FARA also requires agents of foreign principals to file copies of informational materials that they distribute for a foreign principal and to maintain records of their activities on behalf of their principal. The Act contains several exemptions, including exemptions for news organizations, foreign officials, and agents who register under domestic lobbying disclosure laws. Failure to comply with FARA may subject agents to criminal and civil penalties. Although FARA has not been litigated extensively, courts have recognized a compelling governmental interest in requiring agents of foreign principals to register and disclose foreign influence in the domestic political process, resulting in a number of constitutional challenges being rejected over the decades since FARA’s initial enactment. In 2016, the Office of the Inspector General at DOJ issued a report on DOJ’s enforcement of FARA, finding that the department lacked a comprehensive strategy for enforcement. Among the criticisms highlighted in that report were the lack of enforcement actions brought by DOJ, as well as issues of vagueness in the terms and breadth of the statute. Some Members of Congress have introduced legislation to amend FARA following the Inspector General’s report and other allegations that potential misconduct by foreign agents is not currently policed under the statute. For example, the Disclosing Foreign Influence Act (H.R. 4170; S. 2039) would repeal the FARA exemption that allows foreign agents to file under domestic lobbying regulations in lieu of the Act; would provide DOJ with authority to make civil investigative demands to investigate potential FARA violations; and would require DOJ to develop a comprehensive enforcement strategy for FARA, with review of its effects by the agency’s Inspector General and the Government Accountability Office. The bills’ sponsors have explained that the bills are intended to address “ambiguous requirements for those lobbying on behalf of foreign governments,” which “has, over the years, led to a sharp drop in the number of registrations and the prospect of widespread abuses.” This report examines the nature and scope of the current regulatory scheme, including the scope of FARA’s application to agents of foreign principals; what the statute requires of those covered under the Act; exemptions available under the statute; and methods of enforcement. The report concludes by discussing various legislative proposals to amend FARA in the 115th Congress.

Dec 4, 2017

WaterSense®: Water-Efficiency Label and Partnership Program

Dec 4, 2017

Haiti’s Political and Economic Conditions: In Brief

Haiti shares the island of Hispaniola with the Dominican Republic; Haiti occupies the western third of the island. Since the fall of the Duvalier dictatorship in 1986, Haiti has struggled to overcome its centuries-long legacy of authoritarianism, extreme poverty, and underdevelopment. Although significant progress has been made in improving governance, democratic institutions remain weak. Poverty remains massive and deep, and economic disparity is wide. In proximity to the United States, and with a chronically unstable political environment and fragile economy, Haiti has been an ongoing policy issue for the United States. Many in the U.S. Congress view the stability of the nation with great concern and have evidenced a commitment to improving conditions there. Haiti returned to constitutional order in February 2017, with the inauguration of President Jovenel Moïse, after almost a year without an elected president because of political gridlock and delayed elections. Hopes for a more functional and transparent government are tempered by the political newcomer’s lack of experience and ongoing investigations into Moïse’s possible involvement in money laundering and irregular loan arrangements, which the president denies. Widespread corruption has been an impediment to good governance and respect for human rights throughout much of Haiti’s history. The Haitian Senate’s Special Commission of Investigation released a report in November alleging embezzlement and fraud by current and former Haitian officials managing $2 billion in loans from Venezuela’s PetroCaribe discounted oil program. The commission accuses 15 former government officials, including two former prime ministers, and President Moïse’s chief of staff of corruption and poor management. Haiti is the poorest country in the Western Hemisphere. Its poverty is massive and deep, exacerbated by chronic political instability and frequent natural disasters. Almost 60% of the country’s 10 million people live in poverty, and almost a quarter of them live in extreme poverty. Haiti is still recovering from the devastating earthquake in 2010, as well as Hurricane Matthew, which hit the island in 2016. The latter worsened a process begun by a two-year drought, destroying Haiti’s food supply and creating a humanitarian disaster. In addition, Haiti continues to struggle against a cholera epidemic inadvertently introduced by United Nations peacekeepers the same year as the earthquake. Nonetheless, according to the State Department, Haiti is transitioning from a postdisaster era to one of reconstruction and long-term development. The United Nations Stabilization Mission in Haiti (MINUSTAH) was in Haiti to help restore order from 2004 until October 2017. The mission helped facilitate elections, combated gangs and drug trafficking with the Haitian National Police, and responded to natural disasters. MINUSTAH was criticized because of sexual abuse by some of its forces and scientific findings that its troops introduced cholera to the country. The U.N. maintains it has diplomatic immunity, but after years of international pressure said that it had a “moral responsibility” to the epidemic’s victims. The U.N. announced a new $400 million plan to fight cholera in Haiti, and its intention to support cholera victims; neither program has been fully funded or implemented. MINUSTAH has been succeeded by a smaller mission, the U.N. Mission for Justice Support in Haiti (MINUJUSTH), which is to focus on rule of law, development of the Haitian National Police force, and human rights. The Haitian National Police now have primary responsibility for domestic security. Haiti was a key foreign assistance priority for the Obama Administration in Latin America and the Caribbean. According to the State Department, the main priorities for current U.S. policy regarding Haiti are to strengthen fragile democratic institutions and foster sustainable development. Other policy priorities include support for economic growth and poverty reduction, including through bilateral trade and investment to promote job creation; improved health care and food security; promoting respect for human rights; and strengthening the Haitian National Police. The Trump Administration’s proposed FY2018 budget of $156 million for aid to Haiti was a 30% reduction from the FY2017 request. The Administration has also announced that Temporary Protected Status for Haitians is to be terminated as of July 22, 2019.

Dec 1, 2017

Understanding the Speech or Debate Clause

The Speech or Debate Clause (Clause) of the U.S. Constitution states that “[F]or any Speech or Debate in either House,” Members of Congress (Members) “shall not be questioned in any other Place.” The Clause serves various purposes: principally to protect the independence and integrity of the legislative branch by protecting against executive or judicial intrusions into the protected legislative sphere, but also to bar judicial or executive processes that may constitute a “distraction” or “disruption” to a Member’s representative or legislative role. Despite the literal text, protected acts under the Clause extend beyond “speeches” or “debates” undertaken by Members of Congress, and have also been interpreted to include all “legislative acts” undertaken by Members or their aides. Judicial interpretations of the Clause have developed along several strains. First and foremost, the Clause has been interpreted as providing Members with general criminal and civil immunity for all “legislative acts” taken in the course of their official responsibilities. This immunity principle protects Members from “intimidation by the executive” or a “hostile judiciary” by prohibiting both the executive and judicial powers from being used to improperly influence or harass legislators. Second, the Clause appears to provide complementary evidentiary and testimonial privileges. Although not explicitly articulated by the Supreme Court, lower federal courts have generally viewed these component privileges as a means of effectuating the purposes of the Clause by barring evidence of protected legislative acts from being used against a Member, and protecting a Member from compelled questioning about such acts. The testimonial privilege component of the Clause has given rise to significant disagreement in the lower courts. The U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) has held that the Clause’s testimonial privilege encompasses a general documentary nondisclosure privilege that applies regardless of the purposes for which disclosure is sought. To the contrary, the U.S. Court of Appeals for the Third Circuit and the U.S. Court of Appeals for the Ninth Circuit have rejected that position, holding instead that, at least in criminal cases, the Clause prohibits only the evidentiary use of privileged documents, not their mere disclosure to the government for review as part of an investigation.

Dec 1, 2017

Proposed Offsets Exceed Spending for Agriculture in the Administration’s Disaster Assistance Request

On November 17, 2017, the Office of Management and Budget (OMB) released the Administration’s request for a third round of supplemental funding in response to natural disasters in 2017. The total request includes $44 billion of additional appropriations for disasters during 2017, offset by $59 billion of reductions to budget authority for previous appropriations ($15 billion) and a two-year extension of sequestration on mandatory spending ($44 billion) from FY2025 to FY2027. Accounts in the jurisdiction of Agriculture appropriations would receive an additional of $992 million for disaster recovery but be reduced over time by $5.6 billion. Proposed reductions include $3 billion through rescissions of prior appropriations and an estimated $2.6 billion share from extending sequestration on mandatory spending in the jurisdiction of Agriculture appropriations (Table 1). The result, therefore, would be a net $4.6 billion reduction from agriculture accounts. Disaster Assistance Accounts in the jurisdiction of Agriculture appropriations would receive $992 million in the Administration’s supplemental request. This is the first time in 2017 that agriculture accounts would be included in supplemental appropriations. The assistance is primarily for two agricultural land rehabilitation programs—the Emergency Watershed Protection Program ($500 million) and the Emergency Conservation Program ($375 million). Other agricultural disaster assistance programs would receive supplemental funding in lower amounts, including the Emergency Forest Restoration Program for private lands ($50 million) and the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish program ($40 million). The request would also target funding to repair U.S. Department of Agriculture research buildings damaged by recent hurricanes and provide additional authority for multifamily housing loan programs in rural areas. Stakeholders have called for other types of agricultural assistance, but these programs were not included in the Administration’s request. These include amounts for citrus and specialty crop production damaged by Hurricane Irma and livestock and cotton production damaged by Hurricane Harvey, particularly for losses not covered by existing agriculture disaster assistance programs. Offsets The Administration proposes to offset the additional spending on supplemental appropriations with cancellations of unobligated balances from prior appropriations and by extending by two years to FY2027 the sequestration on mandatory spending as part of the Budget Control Act of 2011 (P.L. 112-25). Thus, for agriculture, offsets would exceed supplemental assistance. Cancellations of unobligated balances from prior appropriations affecting agriculture total $3 billion, of which about $1.4 billion come from conservation programs. The offsets also include an $800 million rescission from the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and a $196 million rescission from the rural development cushion of credit account, which contains advance payments by borrowers that earns interest to fund Rural Economic Development loans. The WIC and cushion of credit rescissions are also proposed in the FY2018 Agriculture appropriations bills (H.R. 3268, S. 1603). Using offsets in supplemental appropriations that are proposed for the FY2018 appropriation may make the latter more challenging, since those offsets would no longer be available. The proposed cancellation of $212 million from Agricultural Research Service (ARS) buildings and facilities was in the Administration’s FY2018 budget request, but appropriators chose not to include it in their bills. Because agriculture spending relies heavily on mandatory spending, and mandatory spending continues to have annual sequestration from the Budget Control Act, agriculture is particularly affected by extending sequestration as an offset to pay for current spending. To date, sequestration on mandatory spending has been extended by four years from its original FY2021 sunset. The Administration’s current proposal to extend sequestration does not mention the effect on program areas. A CRS tabulation of sequestration in FY2018 on accounts in the jurisdiction of Agriculture appropriations is $1.3 billion. With this as an annual estimate of the agriculture share in sequestration, the proposal to extend sequestration by two more years could result in an estimated $2.6 billion of additional sequestration from mandatory agriculture accounts in FY2026 and FY2027, assuming program and funding continuity. As noted, these offsets ($5.6 billion) from agriculture would exceed the addition ($992 million) to agricultural accounts for disaster assistance by more than $4.6 billion. Table 1. Effect on Agriculture from Administration’s Request for Disaster Assistance (million dollars; accounts in the jurisdiction of Agriculture appropriations) Program Amount Disaster Assistance Watershed and Flood Prevention Operations (hurricane debris removal and repairs) +500.0 Emergency Conservation Program (hurricane damage repairs) +375.0 Emergency Forest Restoration Program (hurricane damage restoration) +50.0 Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish program +40.0 ARS Buildings and Facilities (hurricane damage repairs) +21.7 Rural Housing Service Multifamily Housing (supports $20 million of direct loans) +4.3 Office of Inspector General (oversight) +1.0 Subtotal +992.0 Offsets Extend Joint Committee sequestration on mandatory programs two more years through FY2027 -2,600.0a Conservation programs (unobligated, $400 million pre-2014, $230 million CSP, $551 million RCPP) -1,419.0 WIC (as proposed in Agriculture appropriations) -800.0 ARS Buildings and Facilities (delay modernization, as proposed in Administration’s budget) -212.0 Emergency Watershed Program (unobligated balances) -204.0 Rural Economic Development Grants (cushion of credit, as proposed in Agriculture appropriations) -196.0 Watershed and Flood Prevention Operations (unobligated balances) -90.0 APHIS (unobligated balances from emergency preparedness and health programs) -72.0 Rural Business Program (unobligated balances in Business and Industry loans and other grants) -25.0 Rural Energy Savings Program (as proposed in Senate Agriculture appropriations) -8.0 Subtotal -5,626.0 Agriculture programs total -4,634.0 Source: CRS, compiled from OMB, “Letter regarding additional funding and reforms to address impacts of recent natural disaster,” November 17, 2017. Notes: WIC = Special Supplemental Nutrition Program for Women, Infants, and Children; CSP = Conservation Stewardship Program; RCPP = Regional Conservation Partnership Program; APHIS = Animal and Plant Health Inspection Service. Accounts with mandatory spending in the jurisdiction of Agriculture appropriations bear $1.3 billion of sequestration in FY2018 (OMB, “Report to the Congress on the Joint Committee Reductions for FY2018,” May 23, 2017). We use this one-year amount to estimate the two-year Agriculture share of the $44.4 billion offset from extending sequestration, assuming program and funding continuity.

Dec 1, 2017

Supplemental Appropriations and the 2017 Hurricane Season

The 2017 hurricane season was the fifth-most active on record in the Atlantic Basin, in terms of accumulated storm strength. Four named storms made landfall on U.S. soil from mid-August to mid-October, causing extensive damage. Concurrently, a series of deadly wildfires struck California. Enacted 2017 Hurricane Season Supplemental Appropriations Congress has passed two supplemental appropriations bills in response to Administration requests made in September and October 2017 in the wake of these incidents. Table 1 outlines the two requests and enacted appropriations. Table 1. Enacted Supplemental Appropriations After 2017 Hurricanes ($millions, rounded, discretionary budget authority) Appropriations Subcommittee FY2017 FY2018 Totals Agency/Bureau Appropriation September 1, 2017 Request P.L. 115-56October 4, 2017 RequestP.L. 115-72RequestedEnacted Agriculture Department of Agriculture Nutrition Assistance Program [Grant]a — — — [1,270]a — [1,270]a Financial Services/General Government Small Business Administration Disaster Loan Program 450 450 — — 450 450 Homeland Security Department of Homeland Security Office of Inspector General Operations and Supportb — — — [10]b — [10]b Federal Emergency Management Agency Disaster Relief Fund (DRF) 7,400 7,400 12,700 18,670 20,100 26,070 DRF after Transfers 7,400 7,400 12,700 13,760 20,100 21,160 Disaster Assistance Direct Loan Programb — [4,900]b — [4,900]b National Flood Insurance Programc — — 16,000c 16,000c 16,000c 16,000c Interior/Environment Forest Service Wildland Fire Management — — — 185 — 185 FLAME Wildfire Suppression Reserve Fund — — — 342 — 342 Department of the Interior Department-wide Programs Wildland Fire Management — — 50 50 Transportation/Housing and Urban Development Department of Housing and Urban Development Community Development Fund — 7,400 — — — 7,400 Source: CRS analysis of OMB requests and enacted legislation. Funding drawn from SNAP contingency reserve funds. Provided as a transfer from the DRF. This is a cancellation of debt owed by the program, rather than an appropriation. Third Supplemental Appropriations Request The Administration made a third supplemental appropriations request on November 17, 2017. Table 2 provides a breakdown of the supplemental appropriations request by subcommittee of jurisdiction. Requests for specific authorities, legislative language, or mandatory spending are not included. Consult CRS appropriations experts for details. Table 2. Third 2017 Hurricane Season Supplemental Appropriations Request ($millions, rounded, discretionary budget authority) Appropriations Subcommittee Department/Agency Bureau Account Request Agriculture 992 Department of Agriculture Office of Inspector General Office of Inspector General (OIG) 1 Agricultural Research Service Buildings and Facilities 22 Farm Service Agency Emergency Conservation Program 375 Emergency Forest Restoration Program 50 Commodity Credit Corporation Fund 40 Natural Resources Conservation Service Watershed and Flood Prevention Operations 500 Rural Housing Service Rural Housing Insurance Fund Program Account 4 Commerce/Justice/Science 494 Department of Commerce Economic Development Administration Economic Development Assistance Programs 300 National Oceanic and Atmospheric Administration Operations, Research, and Facilities 51 Procurement, Acquisition and Construction 29 Department of Justice Federal Bureau of Investigation Salaries and Expenses (S&E) 5 Drug Enforcement Administration S&E 2 Federal Prison System S&E 11 Buildings and Facilities 30 National Aeronautics and Space Administration Construction and Environmental Compliance and Restoration 58 National Science Foundation Research and Related Activities 8 Defense 442 Department of Defense Operation and Maintenance (O&M) O&M, Army 20 O&M, Navy 268 O&M, Marine Corps 18 O&M, Air Force 21 O&M, Defense-wide 3 O&M, Army Reserve 13 O&M, Navy Reserve 3 O&M, Air Force Reserve 6 O&M, Army National Guard 55 Defense Health Program 1 Procurement Other Procurement, Navy 26 Revolving and Management Funds Working Capital Fund, Navy 9 Energy and Water Development 515 Corps of Engineers—Civil Works Construction 15 O&M 323 Flood Control and Coastal Emergencies 162 Department of Energy Energy Programs Electricity Delivery and Energy Reliability 10 Strategic Petroleum Reserve 6 Financial Services and General Government 1,786 General Services Administration Real Property Activities Federal Buildings Fund 122 Judicial Branch Courts of Appeals, District Courts, and Other Judicial Services S&E 5 Small Business Administration Small Business Administration OIG 7 Disaster Loans Program Account 1,652 Homeland Security 24,164 Department of Homeland Security U.S. Customs and Border Protection Operations and Support (O&S) 146 Procurement, Construction, and Improvements (PC&I) 3 U.S. Immigration and Customs Enforcement O&S 36 PC&I 33 Transportation Security Administration O&S 11 United States Coast Guard Operating Expenses 112 Acquisition, Construction, and Improvements 312 Federal Emergency Management Agency Disaster Relief Fund 23,500 Federal Law Enforcement Training Center O&S 5 PC&I 4 Interior/Environment 576 Department of Agriculture Forest Service Capital Improvement and Maintenance 69 National Forest System 21 State and Private Forestry 8 Department of the Interior United States Geological Survey Surveys, Investigations, and Research 33 United States Fish and Wildlife Service Construction 211 National Park Service Operation of the National Park System 25 Construction (and Major Maintenance) 183 Historic Preservation Fund 18 Environmental Protection Agency Hazardous Substance Superfund 3 Leaking Underground Storage Tank Trust Fund 7 Labor/Health and Human Services/ Education 1,518 Department of Education Hurricane Education Recovery Hurricane Education Recovery 1,235 Department of Health and Human Services Departmental Management Public Health and Social Services Emergency Fund 252 Department of Labor Employment and Training Administration Job Corps 31 Military Construction/Veteran Affairs 814 Department of Defense Military Construction Navy and Marine Corps 202 Army National Guard 519 Department of Veterans Affairs Veterans Health Administration Medical Services 11 Medical Support and Compliance 3 Medical Facilities 75 Departmental Administration Construction, Minor Projects 4 Transportation/Housing and Urban Development 12,696 Department of Housing and Urban Development Community Planning And Development Community Development Fund 12,000 Department of Transportation Federal Aviation Administration Facilities and Equipment (Airport and Airway Trust Fund) 72 Federal Highway Administration Emergency Relief Program 416 Federal Transit Administration Public Transportation Emergency Relief Program 199 Maritime Administration Operations and Training 10 TOTAL 43,996 Source: CRS analysis of November 17, 2017, supplemental request letter. Legislative Response to the Third Supplemental Request A supplemental appropriations package may be considered in parallel or in combination with a bill to extend funding for government operations past the expiration of the current continuing resolution (CR) on December 8, 2017. Supplemental (and annual) appropriations have been provided in consolidated appropriations measures with continuing resolutions in the past, including the initial FY2018 CR (P.L. 115-56) and the first two continuing resolutions for FY2017 (P.L. 114-223, P.L. 114-254).

Dec 1, 2017

Third Treasury Report on Regulatory Relief: Asset Management and Insurance

On October 26, 2017, the Department of the Treasury issued a report, “A Financial System That Creates Economic Opportunities: Asset Management and Insurance,” which examines the regulation of those industries. It is the third in a series of reports written in accordance with Executive Order 13772 issued by President Donald Trump on February 3, 2017, which directs the Secretary of the Treasury to report on how the financial system is regulated and how regulation could be improved. The report examines asset management and insurance and makes recommendations for changes to how they are regulated. The recommendations are generally aimed at providing regulatory relief and achieving certain stated goals: appropriately addressing systemic risk and firm solvency, increasing the efficiency of regulation, appropriately engaging in international regulatory forums and bodies, and promoting economic growth and informed choices. This Insight briefly examines the report and selected recommendations made in it. Asset Management Industry Overview The asset management industry is comprised of a diverse range of companies and professionals—including investment companies, mutual funds, and investment advisers—that facilitate the flow of individuals’ and companies’ savings into investments, such as stocks and bonds. Before presenting recommendations, the Treasury provides an overview of the industry, including recent trends (e.g., the amount of assets under management has grown rapidly in recent decades, and in certain cases fees charged to customers have declined) and the regulatory structure for the industry. As part of this overview, the report makes several assertions that provide the rationale for most of its recommendations. First, the report asserts that the industry is not exposed to bank-like “runs” wherein investors, fearing losses, withdraw their money en masse. Next, it notes that funds are regularly terminated and these liquidations generally do not cause market disruptions. Also, it argues that when market events do cause large outflows, the funds typically continue to perform well and again do not result in market disruptions. Finally, the report cites a survey of industry participants that indicates that compliance costs will likely rise significantly in coming years due to increased regulation and regulatory burden. Arguably, these characteristics support the view that certain regulations are overly burdensome. Opponents of deregulation may dispute some of these assertions. For example, some observers argue there is run risk in asset management. When the Reserve Primary Fund—a prominent money market fund (MMF)—fell below its target value of $1 per share in 2008, outflows from certain MMFs surged. While the Securities and Exchange Commission (SEC) has since implemented reforms to MMF regulation, risks may remain. Furthermore, the near failure of Long-Term Capital Management (LTCM)—a $126 billion hedge fund—in 1998 arguably demonstrates that distress at an individual fund can cause market disruptions. Fourteen banks and brokerages saved LTCM from apparent imminent collapse in a deal arranged by the Federal Reserve, because certain participants believed its failure could cause chaos in financial markets. Selected Recommendations The report makes 30 recommendations related to the asset management industry, all of which are listed and summarized in Appendix B of the report. Treasury concludes that risks emanating from the asset management industry should be mitigated through activities- and products-based—not entity-based—regulation and recommends changes to certain rules related to liquidity risk, derivatives, exchange-traded funds, and disclosure requirements. In addition, it recommends that dual agency requirements (wherein an asset manager must meet the requirements of both the SEC and the Commodity Futures Trading Commission) and the Volcker Rule should also be amended to reduce regulatory burden. Treasury also calls for increased transparency and accountability related to international engagement and for the Department of Labor to reexamine the implications of its fiduciary rule. Insurance Industry Overview Insurance is typically divided into property and casualty insurance, life insurance, and health insurance, with a wide spectrum of company sizes and types. The 2016 statistics cited in the Treasury report include a total of 780 insurers offering life and health insurance, 2,655 offering property and casualty insurance, and 1,095 offering health insurance with direct written premiums totaling $1.5 trillion. Regulation of most of the industry, particularly the non-health lines, is primarily at the state level. There is no federal entity chartering insurers akin to the Office of the Comptroller of the Currency for banks. The Dodd-Frank Act, however, increased federal involvement in insurance, particularly by creating the Federal Insurance Office within Treasury and providing for Federal Reserve oversight over some insurers. Selected Recommendations In general, the report is supportive of the primary role the states play in insurance regulation and includes a legislative recommendation to ensure state regulatory primacy by clarifying the insurance exception to Consumer Financial Protection Bureau (CFPB) oversight authority. Furthermore, the report recommends that federal entities improve coordination and harmonization with state regulators on certain issues, including the creation of domestic and international group capital standards and the implementation of financial reporting requirements of the Federal Reserve. The report is also supportive of a new approach regarding systemic risk that focuses on activities rather than the specific entity designations that have been rejected by certain state insurance regulators and insurance industry participants. Several of the issues addressed by the recommendations have drawn recent congressional attention and legislation. Legislative Considerations Regulators could make many of the changes recommended by the Treasury under existing authorities. However, these changes would be made only to the extent that the agencies choose to implement them. Alternatively, Congress could mandate many of the changes through legislative action if it believes the agencies will not implement the appropriate changes or will do so too slowly. In addition, the report identifies four recommendations as requiring congressional action: (1) exempting investment companies and advisers from stress-testing, (2) revising certain definitions in the Volcker Rule so that the rule is not applied to asset management companies, (3) clarifying the “business of insurance” exception to CFPB oversight authority, and (4) passing a law (provided states do not adopt uniform regulations themselves) related to insurance data security.

Nov 30, 2017

The Trump Administration and the Unified Agenda of Federal Regulatory and Deregulatory Actions

Donald J. Trump promised that if he were elected President, he would instruct federal agencies to reduce their regulations significantly. As of late 2017, this deregulation was underway in agencies across the federal government. One way for Congress and the public to be informed about this deregulatory activity is to consult the “Unified Agenda of Federal Regulatory and Deregulatory Actions.” The Unified Agenda is a government-wide publication of rulemaking actions agencies expect to take in the coming months, and it contains both regulatory actions (i.e., new regulations) and deregulatory actions (i.e., reductions in or elimination of current regulations). The Unified Agenda is typically published twice each year by the Regulatory Information Service Center (RISC), a component of the General Services Administration (GSA), for the Office of Management and Budget’s (OMB’s) Office of Information and Regulatory Affairs (OIRA). OIRA is the entity within OMB that has primary oversight responsibilities over most agencies’ rulemaking activities. All entries in the Unified Agenda have uniform data elements that can be searched in an online database. Each entry includes information about the rule, including the department and agency issuing the rule, the title of the rule, the Regulation Identifier Number (RIN), an abstract of the action being taken, a timetable of past actions and a projected date for the next action, and information about the priority of the rule (e.g., whether it is “economically significant” or “major”). The Trump Administration’s first Unified Agenda, which was issued on July 20, 2017, and was referred to by the Administration as the “Update to the 2017 Unified Agenda of Federal Regulatory and Deregulatory Actions,” contains information on many deregulatory actions that the Trump Administration has undertaken so far. For example, the Agenda lists 469 actions that agencies have withdrawn since the previous (Fall 2016) edition of the Unified Agenda and 22 major and/or economically significant actions that were reclassified from “active” under the Barack Obama Administration to “long-term” under the Trump Administration. The 2017 Update lists a total of 58 economically significant “active” actions, as compared to 113 such actions that had been published in the Fall 2016 edition. Notably, it also appears that the Unified Agenda could be an important source of information for another major regulatory development in the Trump Administration: the regulatory budget, which was announced in a memorandum issued by OIRA on September 7, 2017. The Trump Administration’s regulatory budget will require the cost of most agencies’ new regulations to remain below a regulatory cost cap, which OMB will set for each covered agency in each fiscal year. The tracking of agencies’ implementation of this regulatory budget is expected to be tied to future editions of the Unified Agenda, beginning with the next edition. This report provides an overview of the Unified Agenda, discusses the additional significance of the Unified Agenda in the Trump Administration, provides summary information about content of the 2017 Update, and discusses what additional information can be expected in the subsequent edition of the Agenda.

Nov 29, 2017

Federal Role in Voter Registration: The National Voter Registration Act of 1993 and Subsequent Developments

Historically, most aspects of election administration have been left to state and local governments, resulting in a variety of practices across jurisdictions with respect to voter registration. States can vary on a number of elements of the voter registration process, including whether or not to require voter registration; where or when voter registration occurs; and how voters may be removed from registration lists. The right of citizens to vote, however, is presented in the U.S. Constitution in the 15th, 19th, and 26th Amendments. Beginning with the Voting Rights Act (VRA) in 1965, Congress has sometimes passed legislation requiring certain uniform practices for federal elections, intended to prevent any state policies that may result in the disenfranchisement of eligible voters. The National Voter Registration Act (NVRA) was enacted in 1993 and set forth a number of voter registration requirements for states to follow regarding voter registration processes for federal elections. NVRA is commonly referred to as the motor-voter bill, as it required states to provide voter registration opportunities alongside services provided by departments of motor vehicles (DMVs), although NVRA required other state and local offices providing public services to provide voter registration opportunities as well. NVRA also created a federal mail-based voter registration form that all states are required to accept and created criteria for state voter registration forms. Certain procedures states must follow for performing voter registration list maintenance or removing voters from registration lists are also set forth in NVRA. The Federal Election Commission (FEC) provided guidance to state election officials and issued biennial reports to Congress on NVRA implementation and voter registration in each state until these roles were transferred to the Election Assistance Commission (EAC) in 2002. NVRA remains a fundamental component of federal voter registration policy and has not undergone many significant revisions since its enactment, though voter registration remains a subject of interest to Congress. The Help America Vote Act (HAVA) of 2002 enacted a number of election administration measures, several of which were based on recommendations from the FEC’s biennial NVRA reports, and affected federal voter registration. These included the computerization of state voter lists; grants to states for election technology upgrades; changes to the federal mail-based voter registration form; and the transfer of the FEC’s role in administering NVRA to the newly created EAC. More comprehensive information on HAVA can be found in CRS Report RS20898, The Help America Vote Act and Election Administration: Overview and Selected Issues for the 2016 Election. In the 115th Congress to date, 35 bills have been introduced related to federal voter registration or NVRA. Some of these measures are narrow in scope, whereas others are more comprehensive electoral reforms. Many of these bills seek to expand the ways in which states must allow individuals to register to vote. This can include adding other public service agencies to the list of NVRA voter registration agencies, or requiring online voter registration, same-day voter registration, preregistration of teenagers not yet eligible to vote, or automatic voter registration. A number of other bills reflect ongoing concerns about the technology used to maintain voter registration data and about balancing the efficiency technology provides for citizens and election officials with sufficient cybersecurity protections.

Nov 28, 2017

The Supplemental Poverty Measure: Its Core Concepts, Development, and Use

The Supplemental Poverty Measure (SPM) is a measure of economic deprivation—having insufficient financial resources to achieve a specified standard of living. The SPM addresses some of the limitations of the official poverty measure, without supplanting it outright. Both the SPM and the official measure determine the poverty status of people and families by comparing their financial resources against poverty thresholds that are valued in dollars. For both measures, poverty thresholds vary by family size and composition, and families whose resources are lower than the thresholds are considered to be poor. The measures differ in their definitions of need, as it is used in the thresholds (the dollar amounts used to determine poverty status), financial resources that are considered relevant for comparing against the measure of need as specified in the thresholds, and family, for the purpose of assigning thresholds and counting resources. Need The official poverty thresholds measure needs derived from the cost of an austere food budget. The food budget was multiplied by three, based on the finding that food accounted for about one-third of total family expenditures in 1955. Since their original computation, these thresholds have been adjusted annually for price inflation. In contrast, the SPM’s thresholds are based on consumer expenditures for food, clothing, shelter, and utilities, and it uses five years of data from the Consumer Expenditure Survey in calculating needs and thresholds. Developing the SPM thresholds starts with spending data for families with exactly two children. These data are refined by using approximately the 33rd percentile of families’ expenditures on food, clothing, shelter, and utilities. Next, an extra 20% is figured into the thresholds for miscellaneous expenses such as cleaning supplies and personal care items. The thresholds then undergo further adjustment to reflect that housing costs differ between homeowners with mortgages, homeowners without mortgages, and renters; housing costs differ geographically; and costs differ by family size and composition. Financial Resources Financial resources to meet needs, whether in the SPM or the official measure, are based on the sum of income of all family members. While the official measure uses money income before taxes, the SPM makes additional adjustments and considers a wider range of resources. The SPM includes the value of certain in-kind benefits (such as food and housing subsidies), uses income after estimated federal and state taxes, and subtracts some expenses from income. These expenses include medical out-of-pocket costs, such as health insurance premiums, physician co-pays, and over-the-counter medications; child support paid outside of the household; and work expenses, such as child care and the cost of commuting, tools, uniforms, or licensing fees related to a person’s employment. Work expenses, including child care, are capped at the amount of earnings from work of the lowest-earning family member. These expenses are subtracted from family income because they cannot be used to obtain the needs defined in the SPM thresholds. Unlike the official poverty measure, the range of financial resources included in the SPM is defined to be consistent with the types of needs used to compute the SPM poverty thresholds. Family Like the official measure, the SPM family unit definition includes people related by birth, marriage, or adoption living in the same housing unit. However, the SPM additionally includes cohabiting couples and their children, and foster children below age 22. How Does Poverty Look through the Lens of the SPM? The demographic profile of the poverty population is different under the SPM than under the official measure. Children have a comparatively lower poverty rate (percentage in poverty) under the SPM, and the aged (65 and older) and working-age persons (18 to 64) have comparatively higher poverty rates. These differences can be explained by the SPM’s resource definition. The SPM includes tax credits and in-kind benefits that help families with children (in effect, boosting the measure of family income). It subtracts medical out-of-pocket expenses, which disproportionately affects the aged (lowering their measure of income), and subtracts work-related expenses, which disproportionately affects the working-age population (lowering their measure of income). Uses and Limits The SPM can give policymakers the tools to understand how taxes and government programs, including the noncash programs, affect the poor. It also illustrates how medical expenses and work-related expenses such as child care can affect a family’s economic well-being. However, the SPM poverty estimates are derived from household survey data, and hence are affected by issues such as underreporting of income from government benefit programs, limitations on how tax liabilities and tax benefits can be estimated based on survey data, and differences in how noncash benefits and lump-sum tax refunds are “valued” by program recipients versus how they are valued for the purposes of poverty measurement. Additionally, the SPM does not directly value health insurance provided publicly or privately. Further, poverty has historically been measured in the United States as an “absolute” measure, based on how many people fall below a set standard of living. Questions have been raised about whether the SPM continues to measure poverty in that way, or represents a “relative” measure of poverty, based on how the population ranks in terms of well-being relative to each other.

Nov 28, 2017

Iraq: Background and U.S. Policy

The 115th Congress and the Trump Administration are considering options for U.S. engagement with Iraq as Iraqis look beyond the immediate security challenges posed by their intense three-year battle with the insurgent terrorists of the Islamic State organization (IS, aka ISIL/ISIS). While Iraq’s military victory over Islamic State forces is now virtually complete, Iraq’s underlying political and economic challenges are daunting and cooperation among the forces arrayed to defeat IS extremists has already begun to fray. The future of volunteer Popular Mobilization Forces (PMF) and the terms of their integration with Iraq’s security sector are being determined, with some PMF groups maintaining ties to Iran and anti-U.S. Shia Islamist leaders. In September 2017, Iraq’s constitutionally recognized Kurdistan Regional Government held an advisory referendum on independence, in spite of opposition from Iraq’s national government and amid its own internal challenges. More than 90% of participants favored independence. With preparations for national elections in May 2018 underway, Iraqi leaders face the task of governing a politically divided and militarily mobilized country, prosecuting a likely protracted counterterrorism campaign against IS remnants, and tackling a daunting resettlement, reconstruction, and reform agenda. More than 3 million Iraqis have been internally displaced since 2014, and billions of dollars for stabilization and reconstruction efforts have been identified. Iraqi Prime Minister Haider al Abadi is linking his administration’s decisions with gains made to date against the Islamic State, but his broader reform platform has not been enacted by Iraq parliament. Oil exports, the lifeblood of Iraq’s public finances and economy, are bringing diminished revenues relative to 2014 levels, leaving Iraq’s government more dependent on international lenders and donors to meet domestic obligations. The United States has strengthened its ties to Iraq’s security forces and provided needed economic and humanitarian assistance since 2014, but Iraqis continue to disagree over how U.S.-Iraqi relations should evolve. President Trump and Prime Minister Abadi met in Washington, DC, in March 2017 and, according to the White House, “agreed to promote a broad-based political and economic partnership based in the [2008] Strategic Framework Agreement,” including continued security cooperation. Some Iraqis have welcomed U.S. engagement with and assistance to Iraq, whereas other Iraqis view the United States with hostility and suspicion for various reasons. Prime Minister Abadi has expressed the desire for the United States to provide continued support and training for Iraq’s security forces, but some Iraqis—particularly those with close ties to Iran—are deeply critical of proposals for a continued U.S. military presence in the country. U.S. decisions on issues such as policy toward Iran, the conflict in Syria, the Israel-Palestinian conflict, and U.S. relations with Iraqi Kurds and other subnational groups may influence future bilateral negotiations and prospects for cooperation. Congress has authorized a Defense Department train and equip program for Iraqi security forces through December 31, 2019, and has appropriated more than $3.6 billion requested for the program from FY2015 through FY2017, including funds specifically for the equipping and sustainment of Kurdish peshmerga. U.S. military operations against the Islamic State continue with the consent of Iraq’s elected government. Congress has authorized the use of FY2017 funds for sovereign loan guarantees to Iraq and for continued lending for Iraqi arms purchases from the United States. President Trump has requested $1.269 billion to train Iraqis for FY2018 and seeks $347.86 million for foreign aid to Iraq, including $300 million for further U.S. contributions to United Nations-coordinated post-IS stabilization efforts. Appropriations and authorization legislation enacted and under consideration in the 115th Congress generally would provide for the continuation of U.S. assistance and engagement with Iraq on current terms (H.R. 2810, H.R. 3354, S. 1780 and S. 1519).

Nov 21, 2017

The Distribution of the Tax Policy Changes in H.R. 1 and the Senate’s Tax Cuts and Jobs Act

Distributional analysis can be used to illustrate how changes in tax policy would affect the economic well-being of taxpayers. The Joint Committee on Taxation (JCT) regularly prepares distributional analyses of major tax proposals. On November 14, 2017, the JCT released a distributional analysis of the Tax Cuts and Jobs Act (H.R. 1). H.R. 1 passed a vote in the House on November 16, 2017. The JCT has also released a distributional analysis of the Senate’s version of the Tax Cuts and Jobs Act. When the goal of distributional analysis is to look at taxpayers’ economic well-being, one useful metric is the percentage change in after-tax income. Figure 1 illustrates the estimated percentage change in after-tax income that would result from the Tax Cuts and Jobs Act (the House proposal). Several observations can be made examining the distribution in Figure 1, including the following: H.R. 1 would have the largest benefits in 2019 and 2021, in terms of percentage increases to after-tax income, for all income groups. Higher-income taxpayers, and taxpayers with incomes over $1 million, tend to experience the greatest percentage increase in after-tax income under H.R. 1. For low- and moderate-income taxpayers (taxpayers in income groups of $40,000 or less), after-tax income would be expected to fall in 2023 and 2025. Several factors help explain the trends observed in Figure 1. First, the House-passed version of H.R. 1 contains a temporary “family flexibility credit.” The family flexibility credit is a nonrefundable $300 per taxpayer (or $600 in the case of married taxpayers filing a joint return) that phases-out for higher-income taxpayers. The credit would expire at the end of 2022. After this provision expires, the change in after-tax income would be negative, on average, for taxpayers in the lower and into the middle part of the income distribution. The effects can be seen in the middle and upper-middle portions of the income distribution, as the percentage increase in after-tax income under H.R. 1 falls sharply in 2023. Second, using a chained Consumer Price Index (CPI) to adjust parameters in the tax code for inflation would cause tax burdens to increase over time. This effect would be larger for taxpayers in the lower part of the income distribution. A third factor likely contributing to the distributional effects of H.R. 1 is the reduced tax rate (reduced to 25%) on certain pass-through business income. CRS research has shown that pass-through income tends to be earned by taxpayers with higher incomes. Thus, reduced tax rates on pass-through income would tend to increase after-tax incomes for taxpayers in the upper part of the income distribution. Reductions in the corporate tax rate would also tend to benefit higher-income taxpayers. Figure 1. Estimated Percentage Change in After-Tax Income Under H.R. 1, as Reported, by Year and Income Group / Source: CRS calculations based on Joint Committee on Taxation, “Distributional Effects of H.R. 1, As Ordered Reported by the Committee on Ways and Means on November 9, 2017,” JCX-55-17, November 13, 2017. Notes: JCT provided estimates for odd years only. JCT’s distributional analysis does not reflect the increased exemption amounts and later repeal of the estate tax. The percentage change in after-tax income is calculated using JCT’s average tax rate estimates as [(1 – proposal average tax rate) – (1 – present law average tax rate)] / (1 – present law average tax rate). The distributional impacts of the Senate’s version of the Tax Cuts and Jobs Act differ from those of the House proposal, reflecting the differences in each chamber’s legislation. Observations related to the estimated distribution of the Senate proposal, as illustrated in Figure 2, include the following: Like H.R. 1, the Senate proposal is estimated to produce the largest percentage increases in after-tax income in the years following enactment, with the percentage increase in after-tax income tending to decline over time, for all income groups. Similar to H.R. 1, higher-income groups tend to have the largest percentage increase in after-tax income. The group with the largest percentage increase under the Senate proposal is the $500,000 to $1 million income group in most years. For low- and moderate-income taxpayers (taxpayers in income groups of $40,000 or less), after-tax income would generally be estimated to fall in 2023 and later years. Figure 2. Estimated Percentage Change in After-Tax Income Under the Chairman’s Modification to the Chairman’s Mark of the Senate’s Tax Cuts and Jobs Act, by Year and Income Group / Source: CRS calculations based on Joint Committee on Taxation, “Distribution Effects of the Chairman’s Modification to the Chairman’s Mark of the “Tax Cuts and Jobs Act,” Scheduled for Markup by the Committee on Finance on November 15, 2017 (1),” JCX-58R-17, November 17, 2017. Notes: JCT provided estimates for odd years only. JCT’s distributional analysis does not reflect the increased exemption amounts for the estate tax. The percentage change in after-tax income is calculated using JCT’s average tax rate estimates as [(1 – proposal average tax rate) – (1 – present law average tax rate)] / (1 – present law average tax rate). A key difference between the House and Senate proposals is that most of the individual and non-corporate business Senate proposals are scheduled to expire at the end of 2025 (a notable exception is the adoption of chained CPI, which would be permanent). As a result, by 2027, only taxpayers in the $100,000 and above income groups would have estimated increases in after-tax income, and those increases are relatively modest (0.1% to 0.6%). The estimated decline in after-tax income for taxpayers in the $10,000 to $30,000 income range before 2027 is mainly due to provisions in the Senate proposal that eliminate the individual mandate (or more precisely, reduce the fee for not having health insurance to zero). Specifically, these taxpayers would no longer benefit from the premium tax credit.

Nov 21, 2017

TPP Countries Near Agreement without U.S. Participation

On November 11, 2017, the 11 remaining signatories of the Trans-Pacific Partnership (TPP) agreement, excluding the United States, announced the outlines of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with a final deal reportedly possible in 2018. The CPTPP would be a vehicle to enact much of the TPP, signed by these countries and the United States in February 2016. TPP has been stalled since President Trump withdrew from the pact in January 2017. The withdrawal was the first action under the President’s new trade policy approach, which includes a stated preference for bilateral free trade agreement (FTA) negotiations over multiparty agreements like TPP, a critical view of many existing U.S. FTAs, and a prominent focus on bilateral U.S. trade deficits as an indicator of the health of trade relationships. The Trump Administration is now also engaged in a renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico, two TPP signatories and CPTPP participants; it is also seeking potential amendments to the U.S.-South Korea FTA (KORUS). While the United States is not involved in CPTPP, the agreement has the potential to affect the economic well-being of certain U.S. stakeholders, as well as U.S. leadership on international trade issues and long-standing U.S. promotion of an open, rules-based trading system. It also may strengthen perceptions of U.S. disengagement in Asia, which many analysts say could impact the U.S. ability to pursue other goals in the region. Congress, which oversees and sets objectives for the Administration in trade negotiations and passes legislation to implement U.S. FTAs, could play an important role in U.S. trade policy responses to the CPTPP. The United States has existing FTAs with six of the CPTPP members with many provisions similar to those in the new agreement, including near complete tariff elimination. This suggests the most significant economic effects for the United States may relate to the CPTPP members without a U.S. FTA, notably Japan, Malaysia, and Vietnam. The new CPTPP would enter into force 60 days following the ratification of the agreement by 6 of its members. Suspension of TPP Provisions In order to preserve U.S. interest in the TPP, Japan, which is now leading the CPTPP negotiating process, has pushed for the CPTPP to suspend TPP provisions where consensus could not be reached, rather than amend them. The parties agreed to suspend 20 provisions, which primarily were sought by the United States and agreed to by other countries in return for access to U.S. markets. This was especially true in the area of intellectual property rights (IPR) where the CPTPP suspended provisions on patentability for inventions derived from plants; patents for new uses, processes, or methods of existing products (so-called evergreening); patent term adjustment for marketing and patent approval delays; protection of undisclosed test data for chemical and biological drugs; the author/creator life +70 year copyright term; legal liability and safe harbor provisions for internet service providers; circumvention and digital rights management; protections of encryption and satellite program and cable signals. In the investment chapter, investor-state-dispute-settlement (ISDS) is suspended with respect to investment screening (e.g., the criteria by which a party approves an investment), and also with respect to investment agreements between a host state government and an investor. These changes potentially could lead to a requirement to use domestic courts and apply domestic laws to resolve some investment disputes, counter to long-standing U.S. objectives in bilateral investment treaties and FTAs. In e-commerce, the parties suspended the obligation to review de minimis tariff levels on express shipments. The parties also removed a provision to “promote compliance” with local labor laws in the procurement of goods or services, and one section of a provision related to the prohibition against illegal trade in wildlife. In the event of the return of the United States to the agreement, reinstatement of the suspended provisions would require consensus among the existing parties. The parties still must resolve four specific issues, which include Canada’s desire for a blanket cultural exclusion (rather than the narrower chapter-by-chapter exclusions in the TPP) and Malaysia’s exceptions to state-owned enterprise (SOE) commitments. Concerns over Effects on U.S. Export Competitiveness U.S. stakeholders in export-oriented industries have raised concerns that an enacted CPTPP could disadvantage U.S. firms and workers in CPTPP markets. Tariff schedules are expected to remain consistent with the original TPP agreement, which would eventually result in the elimination of duties on more than 99% of tariff lines in each CPTPP country (95% for Japan), and a greater number of tariff reductions. For generally high-tariff products such as agricultural goods, this tariff differential on U.S. versus CPTPP country exports could be a significant factor in market competitiveness. For example, U.S. beef exports to Japan, which totaled more than $1 billion in 2016 face a 38.5% tariff in the Japanese market which eventually would be reduced for CPTPP country exporters to 9%. Table 1 provides examples of high value U.S. exports to the largest three CPTPP markets without an existing U.S. FTA, and the associated tariffs that would be eliminated for CPTPP countries. CPTPP also addresses nontariff barriers and establishes trade rules, but these commitments are typically applied in a nondiscriminatory manner and hence could still benefit U.S. trade even without U.S. participation. Table 1. Selected U.S. Exports to CPTPP Countries without U.S. FTA Country Product U.S. Exports (2016, million $s) Import Tariff Year Tariff Eliminated to CPTPP Japan Beef (Fresh or Frozen) $1,118.1 38.5%* To 9% by Year 16 Frozen Potatoes $271.9 Up to 13.6% Year 6 Walnuts $98.6 10% Year 1 Malaysia Self-adhesive Tape/Sheets $28.7 Up to 20% Year 1 Table and Kitchen Glassware $28.4 30% Year 6 Fresh Grapes $18.8 5% Year 1 Vietnam Cell Phones $74.3 3% Year 1 Soybean Flour/Meal $67.2 8% Year 3 Chicken Cuts $66.0 20% Year 11 Source: CRS analysis using trade data from U.S. Census Bureau and TPP tariff elimination schedules. Notes: Based on original TPP tariff schedules, which may not necessarily reflect final CPTPP tariff elimination. (*) U.S. beef exports to Japan currently face a 50% tariff due to a temporary safeguard measure. Japan’s existing FTA partners, such as Australia, are exempt from the safeguard. In addition to the CPTPP, several TPP countries are also participating in the Regional Comprehensive Economic Partnership (RCEP) (see members in Figure 1). While RCEP negotiations are less comprehensive than the CPTPP, if it were to move forward, RCEP could also potentially disadvantage U.S. exporters as tariffs are reduced among the members, which include all major U.S. trading partners in the region. Figure 1. Total U.S. Trade with RCEP and CPTPP Countries / Source: CRS with data from the Bureau of Economic Analysis (BEA) and U.S. Census Bureau. Note: U.S. services trade data are not available for Laos, Burma, or Cambodia. Outlook and Implications The CPTPP enters the trade landscape at a time of uncertainty in the global trading system. Much of this uncertainty, felt particularly in Asia, reflects ambiguity in the direction of current and future U.S. trade policy goals and U.S. leadership in establishing international trade rules and institutions. Related to this is an ongoing contentious domestic debate over the costs and benefits of international trade and trade agreements. CPTPP has significant policy implications for the United States and Congress. The agreement includes long-standing objectives of U.S. FTAs such as broad tariff elimination and a “negative list” (more liberal) approach to services trade liberalization, as well as newer, largely U.S.-crafted commitments on digital trade and SOEs. The agreement, however, could also make significant changes to the original TPP on issues like IPR and investment that were U.S. priorities. Moving forward, the agreement may raise questions for U.S. policymakers, such as Were the United States to seek entry to the CPTPP, how difficult would it be to reestablish the suspended provisions? Will other countries seek to join the CPTPP? If so, how will this affect U.S. trade patterns with those countries?; and How will U.S. absence from two major potential regional trade initiatives affect broader U.S. influence in the Asia-Pacific region?

Nov 20, 2017

The U.S. Individual Income Tax System, 2017

Nov 20, 2017

End-Year DOD Contract Spending

Nov 17, 2017

Tax Reform: Estate and Gift Tax

Nov 17, 2017

OPEC and Non-OPEC Crude Oil Production Agreement: Compliance Status

On November 30, 2016—in an effort to stabilize declining oil prices—the Organization of the Petroleum Exporting Countries (OPEC) announced an agreement whereby 11 of the then-active 13 members would reduce crude oil production by approximately 1.2 million barrels per day (bpd) for 6 months starting January 1, 2017. On December 10, 2016, OPEC announced that 11 non-OPEC countries, led by Russia, had joined the agreement by pledging to further reduce oil production by 558,000 bpd. This “Declaration of Cooperation” to collectively reduce oil production by approximately 1.8 million bpd was extended for 9 additional months and is currently in effect through March 31, 2018. Congressional interest in OPEC policy dates back to at least 1973 when Arab members of the cartel embargoed oil shipments to the United States. The embargo created perceived shortages and resulted in increased gasoline prices for U.S. consumers. Following a period of increasing oil prices in the early 2000s, the No Oil Producing and Exporting Cartels (NOPEC) Act was introduced in the 110th (H.R. 2264 was passed by the House, and S. 879) and 112th (H.R. 1346 and S. 394) Congresses. The NOPEC Act would have amended the Sherman Act (15 U.S.C. 1 et seq.) by making foreign country oil-producing and exporting cartels illegal. Alternatively, during a period of oversupply and price declines in 2014/2015, non-action by OPEC to increase oil prices was perceived as a targeted effort to harm U.S. oil producers. Subsequently, H.R. 545 was introduced in the 115th Congress to establish a commission to investigate anti-competitive actions taken by OPEC (the bill had been previously introduced as H.R. 4559 in the 114th Congress). Overview of the Agreement Two primary objectives of the OPEC/non-OPEC production agreement are (1) reduce global supply/demand imbalances that had reached surplus levels of 1.5 million bpd in 2015, and (2) reduce resulting global oil stocks that were at record levels. The OPEC portion of the agreement set country-level production quotas for 11 of 13 members that were active at the time of the agreement (Libya and Nigeria are both exempt) that would reduce crude oil production by nearly 1.2 million bpd compared to October 2016 levels. For the 11 non-OPEC countries that committed to reduce oil production, the agreement indicated a cumulative reduction target of 558,000 bpd for the group compared to October 2016 production. Country-specific reduction targets for non-OPEC countries were not indicated. Agreement Compliance For the period January 2017 through September 2017, OPEC and non-OPEC countries party to the production agreement were, as a group, 98% compliant with the production target. During this period the group collectively reduced crude oil production by approximately 1.7 million barrels per day (mbpd) compared to the October 2016 reference level. OPEC member countries subject to the agreement were 107% compliant during the period; 5 of 11 countries (Angola, Kuwait, Qatar, Saudi Arabia, and Venezuela) either met or exceeded their target reductions. Non-OPEC countries were not assigned individual reduction targets; however, the non-OPEC group was 80% compliant with the 558,000 bpd reduction target. With the exception of Kazakhstan, Malaysia, and South Sudan, each non-OPEC country reduced crude oil production during the period. Figure 1 below summarizes crude oil production changes for OPEC and non-OPEC countries. Figure 1. OPEC and Non-OPEC Production Agreement Compliance Crude Oil Production Change from January 2017 through September 2017 / Sources: CRS. OPEC crude oil production from OPEC’s Monthly Oil Market Report. Non-OPEC crude oil production from IEA’s Monthly Oil Data Service. Notes: Compliance calculations are derived by comparing total crude oil production over the period assuming daily production at the reference level, with actual production over the period from monthly reports. OPEC members Libya and Nigeria are not indicated on the map since both countries are exempt from the production agreement. Equatorial Guinea was not an OPEC member when the production agreement started and is therefore listed as a non-OPEC country for the purpose of this analysis. Iran was allowed a 90,000 bpd increase, which it exceeded by 6,000 bpd. Market Impacts and Issues to Watch Generally, compliance with the “Declaration of Cooperation” appears to have achieved the stated goals of normalizing the supply/demand balance as well as reducing global petroleum stocks. Crude oil and petroleum product storage levels in the United States and other Organization for Economic Co-operation and Development (OECD) countries—the benchmark for global petroleum stocks—declined by 69 million barrels during the period January 2017 to August 2017. While petroleum product stocks have declined to levels near the five-year average—a key metric used by OPEC to determine market balance—crude oil stocks remain well above the five-year average, according to IEA’s November oil market report. Crude oil price benchmarks have increased since January 2017. The spot price for Brent crude—a global price benchmark—started 2017 at around $55 per barrel. The Brent spot price was nearly $63 per barrel on November 13th. On November 30, 2017, OPEC is to hold its 173rd meeting in Vienna, Austria. One agenda item being closely monitored by oil market analysts is a potential OPEC/non-OPEC decision to extend, enhance, or unwind the production agreement that is currently set to expire on March 31, 2018. Monthly reports from the U.S. Energy Information Administration (EIA) and IEA project that the oil market will be oversupplied in 2018 even if OPEC maintains production levels set forth in the agreement. Should the agreement expire as scheduled and crude oil production increase, projected oversupply in 2018 could potentially be exacerbated and result in downward pressure on crude prices. However, unforeseen geopolitical and/or weather events could alter this calculus. Additionally, production growth of more than 700,000 bpd (October 2016 to September 2017) from exempt OPEC members Libya and Nigeria has offset more than 40% of production cuts. U.S. crude oil production is projected to increase—mostly driven by tight oil—by 700,000 bpd in 2018 according to EIA. The price-responsive nature of U.S. tight oil further complicates a decision by OPEC/non-OPEC regarding the production agreement.

Nov 16, 2017

Repair or Rebuild: Options for Electric Power in Puerto Rico

On September 20, 2017, Hurricane Maria made landfall in Puerto Rico as a Category 4 storm with sustained wind speeds of over 155 miles per hour. The hurricane also brought torrential rainfall with a range of 15 to 40 inches or more in some places, resulting in widespread flooding across the island. Puerto Rico’s office of emergency management reported that the storm had incapacitated the central electric power system, leaving the entire island without power as the island’s grid was essentially destroyed. Even before the 2017 hurricane season, Puerto Rico’s electric power infrastructure was known to be in poor condition, due largely to underinvestment and the perceived poor maintenance practices of the Puerto Rico Electric Power Authority (PREPA). As of the date of this report, the most urgent need in Puerto Rico remains the restoration of power to the island, where the greatest challenge will likely be access by repair crews to rural areas due to storm-damaged roads and bridges. The government of Puerto Rico was in a fiscal, economic, and social crisis before Hurricane Maria destroyed the electric grid on the island. PREPA’s massive $9 billion debt (incurred before the damage from Hurricanes Irma and Maria) was a particular problem. To address the lack of federal bankruptcy options (due to the island’s special status), Congress established two processes for debt adjustment in the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA; P.L. 114-187), enacted at the end of June 2016. Title VI set out a process for voluntary collective action agreements, similar to those PREPA had been negotiating with creditors since 2014. Title III set out a process that draws on procedures from the U.S. Bankruptcy Code. PROMESA also established a Financial Oversight and Management Board for Puerto Rico (OB) that required PREPA to draw up a fiscal plan. While PROMESA endowed the OB with wide authorities, the governor and legislature of Puerto Rico retained substantial control over public priorities, within constraints of fiscal plans and other provisions of PROMESA. The OB decided to put PREPA into the bankruptcy-like process of Title III on July 2, 2017. While the Federal Emergency Management Agency (FEMA) and the U.S. Army Corps of Engineers (USACE) are focused on simply restoring power, the potential arguably exists under current law for FEMA and USACE to restore the grid meeting existing, modern standards. Longer term, hurricanes and extreme weather will continue to threaten the Caribbean, necessitating consideration of infrastructure hardening and improvements to make the system more resilient. Building a modernized, flexible electric grid, capable of incorporating more renewable sources of electricity, underpinned by more efficient natural gas combined-cycle power plants and energy storage, may help Puerto Rico accomplish these goals. Questions are now being raised as to possible options for rebuilding the electricity grid on the island, given PREPA’s debt problem. The perceived failures of PREPA in managing the existing system, and an apparent lack of transparency with regard to decisions (both before and since Hurricane Maria), have led to calls for a new electricity system regime to lead the rebuilding and modernization effort. Should Congress decide that alternatives to PREPA be considered for this endeavor, the question of what entities could replace PREPA will likely arise. This report explores several alternative electric power structures to PREPA for meeting the electricity services and needs of Puerto Rico. The ability of Puerto Rico and its citizens to assume the burden of paying for a rebuilt (and possibly restructured) electricity system is doubtful. Modernizing Puerto Rico’s grid, and taking the next steps to incorporate resiliency, could be expensive. None of the options discussed provides a silver bullet solution to the issues of the grid in Puerto Rico. Congress may consider whether the efforts to restore electric power in Puerto Rico need to progress beyond simple restoration of electricity, and require new investment and oversight by the federal government.

Nov 16, 2017

Zimbabwe: A Military-Compelled Transition?

Between November 14 and 15, members of the Zimbabwe Defense Forces (ZDF) seized control of the state-owned Zimbabwe Broadcasting Corporation and secured other key political and military facilities, in an action seen by some observers as a coup d’état. The ultimate objective and possible trajectory of their intervention remain unclear, but the move appears to have been sparked by a succession struggle within the ruling Zimbabwe National Union-Patriotic Front (ZANU-PF). Specific triggers were President Robert Mugabe’s November 6 dismissal of one of Zimbabwe’s two vice presidents, Emmerson Mnangagwa, and a purge of Mnangagwa’s supporters. These actions followed signs that Mugabe, age 93, was moving to make Grace Mugabe, his politically ambitious wife, a vice president. This would likely have positioned her to succeed him as president and sidelined her main rival, Mnangagwa, an ex-intelligence chief and Defense Minister. Top security force leaders, many reported allies of Mnangagwa—and, like him, veterans of Zimbabwe’s war of independence, unlike Grace Mugabe—apparently viewed these prospective changes as anathema. The situation in Zimbabwe remains fluid, and what outcomes may result from the military’s intervention are unknown. The ZDF’s action holds the potential to bring about a political transition reversing a years-long trend of undemocratic governance, human rights abuses, and a badly ailing economy. Alternately, it could possibly worsen the security and economic situations. How the United States—and other external actors—might affect the outcome remains to be seen. Talks involving regional actors, the military, Robert Mugabe, and others are under way, but their nature and goals are currently unclear. Intervention The military’s intervention was preceded by an explicit warning on November 13 by ZDF commander Constantino Chiwenga. He demanded an end to the intra-party purge and stated that regarding “matters of protecting our revolution, the military will not hesitate to step in.” The Mugabe administration responded by labeling Chiwenga’s statement “treasonable,” and the next day the military acted. In a live TV statement at dawn on November 15, a military spokesman asserted that the ZDF was acting to “pacify a degenerating political, social and economic situation ... which if not addressed may result in violent conflict.” He averred that the military was not taking over the government and anticipated a “return to normalcy” after “we have accomplished our mission.” He said the ZDF was “targeting criminals around” President Mugabe “who are committing crimes that are causing social and economic suffering ... in order to bring them to justice.” The statement also warned other Zimbabwean security services not to resist the military’s actions. “Criminals” is a likely reference to allies of Grace Mugabe, several of whom have reportedly been arrested. While the statement said that the security of the president and his family was guaranteed, the president is reportedly under house arrest. His wife’s whereabouts remain uncertain. / Mnangagwa’s Ouster Mnangagwa’s removal represented a stunning turnaround for a long-time regime insider, but followed a long-standing pattern in which Mugabe, as head of ZANU-PF and the executive branch, has controlled elites’ elevation to and demotion from key party and state posts. Notably, demotion targets have been those appearing to challenge his leadership or publicly suggest the possibility of a post-Mugabe transition. Mnangagwa himself became vice president in 2014 after his predecessor, opposition figure and ex-ZANU-PF loyalist Joice Mujuru, faced a similar ousting. Mnangagwa’s dismissal was portended by a series of increasingly personalized political attacks on him by Grace Mugabe. She also claimed that Mnangagwa’s allies had planned a coup d’état, and denied reports that Mnangagwa had been targeted in a poisoning plot involving ice cream made by her firm. An official statement explaining Mnangagwa’s ouster accused him of “disloyalty, disrespect, deceitfulness and unreliability.” The president, who had stated his willingness to sack Mnangagwa days earlier, also stripped Mnangagwa of his role as Justice Minister on October 10, 2017. He also reassigned or dismissed several other key ministers, some putative Mnangagwa allies, notably then-Finance Minister Patrick Chinamasa, who became head of a newly created cyber security ministry. ZANU-PF also expelled Mnangagwa from the party. He then fled to South Africa on November 8 after reported death threats. Following these events, a key group of veterans publicly repudiated President Mugabe. Mnangagwa, meanwhile pledged to challenge Robert Mugabe’s leadership. Succession Politics Mnangagwa’s removal generated intense political controversy, as it appeared to presage Grace Mugabe’s possible ascendance to the co-vice-presidency of ZANU-PF during a late-2017 party congress, and then to the national vice presidency. This might have placed Grace Mugabe, her husband’s former secretary, in pole position to temporarily succeed him, were he to resign or die while in office, and then possibly to consolidate power and become president for the longer-term. It would also have signaled a generational transition of power, from a ZANU-PF dominated by independence war veterans and a wing of the party grouped around Mnangagwa and allies in the security services—some of whom oppose any president lacking independence war credentials—to a cohort of politicians who came of age after independence in 1980. This cohort includes Grace Mugabe and is grouped together as a faction known as “Generation 40.” Despite support from many in this group, her relative backing within ZANU-PF more broadly absent her husband was difficult to gauge. Labeled by critics as “Gucci Grace” due to her reported penchant for luxury goods, she has been accused of abusive and “opportunistic” behavior. She has also repeatedly lashed out at perceived enemies since entering politics in 2014, including powerful party figures, and disparaged veterans, historically a core ZANU-PF constituency. Prospects The ZDF intervention is almost certain to fundamentally reshape the political landscape. Whether the military may, however, simply attempt to protect its interests and those of the historically hardline ZANU-PF wing of the party with which it is allied—or whether it facilitates a governance agenda centered on “investment, development and prosperity” (as its intervention statement suggested)—remains to be seen. An alternative option could be a government of national unity akin to one that existed between 2009 and 2013. It ended after procedurally flawed elections in 2013.

Nov 16, 2017

Telehealth Services Proposed for Medicare Part B Reimbursements, 2018: Fact Sheet

Suppress: During the 115th Congress, several bipartisan bills have been introduced that aim to expand the number of telehealth services that are covered under Medicare. Telehealth is the electronic delivery of a health care service via a technological method. Health care providers use telehealth to improve patients’ access to and quality of care. Under Medicare, these patients are likely to live in rural areas, be under the age of 65, and be disabled. The Centers for Medicare and Medicaid Services (CMS) administers the Medicare program and makes decisions on telehealth coverage and payment through its annual physician fee schedule rulemaking process. On November 2, 2017, CMS issued a final rule on the calendar year (CY) 2018 Physician Fee Schedule; however, CMS is still finalizing the list of telehealth services to add to the CY2018 list for Medicare reimbursement. The information in this report is current as of November 15, 2017.

Nov 15, 2017

Key Issues in Tax Reform: Itemized Tax Deductions

Nov 15, 2017

Key Issues in Tax Reform: The Charitable Deduction for Individuals

Nov 15, 2017

In Any Way, Shape, or Form? What Qualifies As “Any Court” under the Gun Control Act?

Nov 14, 2017

A Primer on U.S. Immigration Policy

U.S. immigration policy is governed largely by the Immigration and Nationality Act (INA), which was first codified in 1952 and has been amended significantly several times since. At a fundamental level, U.S. immigration policy can be viewed as two sides of a coin. One side emphasizes the faciliation of migration flows into the United States according to principles of admission that are based upon national interest. These broad principles currently include family reunification, labor market contribution, humanitarian assistance, and origin-country diversity. The United States has long distinguished permanent immigration from temporary migration. Permanent immigration occurs through family and employer-sponsored categories, the diversity immigrant visa lottery, and refugee and asylee admissions. Temporary migration occurs through the admission of visitors for specific purposes and limited periods of time, and encompasses two dozen categories of visitors, including foreign tourists, students, temporary workers, and diplomats. The other side of the immigration policy coin emphasizes the restriction of entry to and removal of persons from the United States who lack authorization to reside in the country, are identified as criminal aliens, or whose presence in the United States is not considered to be in the national interest. Such immigration enforcement is broadly divided between border enforcement—at and between ports of entry—and other enforcement tasks including detention, removal, worksite enforcement, and combatting immigration fraud. The dual role of U.S. immigration policy creates challenges for balancing major policy priorities, such as ensuring national security, facilitating trade and commerce, protecting public safety, and fostering international cooperation.

Nov 14, 2017

Transportation, Housing and Urban Development, and Related Agencies (THUD): FY2018 Appropriations

The House and Senate Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations Subcommittees are charged with providing annual appropriations for the Department of Transportation (DOT), Department of Housing and Urban Development (HUD), and related agencies. THUD programs receive both discretionary and mandatory budget authority; HUD’s budget generally accounts for the largest share of discretionary appropriations in the THUD bill, but when mandatory funding is taken into account, DOT’s budget is larger than HUD’s budget. Mandatory funding typically accounts for around half of the THUD appropriation. The Trump Administration requested net new budget authority of $106.65 billion (after scorekeeping adjustments), including $47.9 billion in discretionary funding, for the departments and agencies funded in the THUD bill for FY2018, $9.65 billion (8%) less than the FY2017 level. The House Appropriations Committee reported its version of an FY2018 THUD appropriations bill on July 17, 2017 (H.R. 3353). It recommended $115.3 billion ($56.5 billion in discretionary funding), less than 1% below the FY2017 level. The text of that bill was incorporated into a consolidated appropriations bill (H.R. 3354), amended (with no change in total funding for THUD, but changes in some accounts within THUD), and passed by the House on September 14, 2017. The Senate Appropriations Committee reported its version of an FY2018 THUD bill on July 27, 2017 (S. 1655). It recommended $119.1 billion ($60.1 billion in discretionary funding), 2.4% more than FY2017. With inflation forecast at 1.9% for FY2018, the House bill would result in a roughly 3% decrease in real THUD funding, while the Senate bill would result in a slight increase in real funding, compared to FY2017. With no agreement on FY2018 funding, Congress passed a continuing resolution (H.R. 601) to provide funding through December 8, 2017, for federal agencies. That act extended FY2017 funding levels for the THUD agencies, less an across-the board rescission 0.6791%. DOT: The Trump Administration requested $75.1 billion in net new budgetary authority for DOT for FY2018. That was about $2 billion less than the comparable figure ($77.1 billion) for FY2016, with significant cuts requested for transit and rail programs. Both the House and Senate bills largely rejected the proposed cuts; the House approved $77.5 billion in new funding, and the Senate Appropriations Committee recommended $78.6 billion. HUD: The Trump Administration requested $31.4 billion in net new budget authority for HUD for FY2018, $7.4 billion less than FY2017 (-19%). It requested no funding for several major grant programs, including the Community Development Block Grant (CDBG) program and the HOME Investment Partnership program. The House bill proposed $38.3 billion, a small increase in overall funding relative to FY2017 (-1.3%), and did not include the proposed eliminations of HOME and CDBG funding. The Senate committee bill recommended $40.2 billion, a 4% increase over FY2017. Related Agencies: The Trump Administration requested $226 million for the agencies in Title III of the THUD bill (the Related Agencies). This was about $113 million less than was provided in FY2017. The major change in funding from FY2017 levels in the request was proposals to terminate funding for the Neighborhood Reinvestment Corporation (NRC) and the Interagency Council on Homelessness (ICH). The President’s budget requested only enough funding to close out the commitments of those two entities. Neither the House nor Senate committee bills included the President’s proposal to wind down funding for the NRC; the House bill, but not the Senate committee-passed bill, would eliminate funding for the ICH.

Nov 14, 2017

Key Issues in Tax Reform: The Mortgage Interest Deduction

Nov 14, 2017

U.S. Circuit and District Court Nominees Who Received a Rating of “Not Qualified” from the American Bar Association: Background and Historical Analysis

The process used by the American Bar Association (ABA) to evaluate judicial nominees has, over the years, remained a topic of ongoing interest among Senators during the judicial confirmation process. This CRS Insight provides background information and historical analysis of U.S. circuit and district court nominees who received, from 1953 to the present, a rating of “not qualified” from the Standing Committee on the Federal Judiciary of the ABA. Since 1953, every presidential Administration, except those of George W. Bush and Donald Trump, has sought ABA prenomination evaluations of its prospective U.S. circuit and district court nominees. During the Bush presidency, as well as during the current Administration, the ABA has provided postnomination evaluations of nominees. The ABA committee, which evaluates all individuals nominated to U.S. circuit and district court judgeships, is made up of 15 lawyers with varied professional experiences and backgrounds. According to the ABA, the evaluation by the committee focuses strictly on a candidate’s professional qualifications—specifically, a candidate’s integrity, professional competence, and judicial temperament—and does not take into account an individual’s philosophy, political affiliation, or ideology (note, however, that some have, at times, disputed this characterization). In evaluating integrity, according to the committee, it “considers the prospective nominee’s character and general reputation in the legal community, as well as the prospective nominee’s industry and diligence.” In evaluating professional competence, it assesses a prospective nominee’s “intellectual capacity, judgment, writing and analytical abilities, knowledge of the law, and breadth of professional experience.” And in evaluating judicial temperament the committee considers “the prospective nominee’s compassion, decisiveness, open-mindedness, courtesy, patience, freedom from bias, and commitment to equal justice under the law.” As stated above, the ABA, at present, provides postnomination evaluations of individuals nominated to U.S. circuit and district court judgeships. At the conclusion of the evaluation process, each member of the ABA committee rates the candidate as “well qualified,” “qualified,” or “not qualified” and independently conveys his or her rating to the chair. If the candidate is found “not qualified” (either unanimously or by a majority of the committee), the committee determined that the nominee does “not meet the committee’s standards with respect to one or more of its evaluation criteria—integrity, professional competence, or judicial temperament.” There are instances when the committee is not unanimous in its rating of a nominee. When this happens, “the majority rating represents the committee’s official rating of the prospective nominee.” The data provided in this Insight include only those nominees whose official rating from the ABA was “not qualified” (i.e., they do not include nominees who a minority of committee members evaluated as not qualified). The evaluations of judicial candidates are provided by the ABA on an advisory basis. It is solely in a President’s discretion, for example, as to how much weight to place on a judicial candidate’s ABA rating. Hence, a “not qualified” ABA rating of a judicial candidate in some instances may dissuade a President from nominating an individual, while in other instances the President may nominate regardless of the rating. As shown by Figure 1, the number of nominees who received a “not qualified” rating has varied across presidencies (ranging from a high of nine nominees during the Eisenhower presidency to no nominees who received such a rating during the Nixon, Reagan, George H. W. Bush, and Obama presidencies). Overall, of the approximately 2,950 individuals nominated to U.S. circuit and district court judgeships from 1953 through November 12, 2017, 40 (or 1.4%) received a rating of not qualified. Of the 40 nominees who received a not qualified rating, 6 (15.0%) were nominated to be circuit court judges and 34 (85.0%) were nominated to be district court judges. Of the 40 total nominees who received such a rating, 21 (52.5%) were nominated by a Republican President and 19 (47.5%) were nominated by a Democratic President. Among recent presidencies, the George W. Bush presidency had the greatest number of nominees, seven, who received a rating of not qualified. The seven nominees represented approximately 2% of all the individuals he nominated to circuit and district court judgeships. As discussed above, the ABA was not asked during the Bush presidency to provide prenomination evaluations of prospective U.S. circuit and district court nominees. This might explain, in part, the relatively greater number of nominees who were known to have received a not qualified rating since prior Presidents might have chosen not to nominate such individuals when confidentially informed by the ABA of its rating. As of this writing, 49 individuals have been nominated by President Trump to U.S. circuit and district court judgeships and have also received a rating from the ABA. Of the 49, 4 (8.2%) received a rating of “not qualified,” 17 (34.7%) received a rating of “qualified,” and 28 (57.1%) received a rating of “well qualified” (including 11, or 78.6%, of 14 circuit court nominees who received a well qualified rating). The number of nominees, as of this writing, who have received a not qualified rating during the Trump presidency is not notably high (when compared to the number of nominees who received such a rating over the entirety of each of the previous 11 presidencies). What is distinctive, however, at least when compared to other presidencies, is that both a U.S. circuit court nominee and at least one district court nominee have received a rating of not qualified during President Trump’s first year in office (which last occurred in 1961 during the first year of the Kennedy presidency). Note that a previous version of this Insight was published on November 9, 2017; this version provides updated data current as of November 12, 2017. Figure 1. Number of U.S. Circuit and District Court Nominees Who Received a “Not Qualified” Rating from the American Bar Association (Updated on November 12, 2017) / Source: Congressional Research Service.

Nov 13, 2017

Flood-Risk Reduction and Resilience: Federal Assistance and Programs

Recent flood disasters have raised congressional and public interest in not only reducing flood risks, but also improving flood resilience, which is the ability to adapt to, withstand, and rapidly recover from floods. In the United States, flood-related responsibilities are shared. States and local governments have significant discretion in land-use and development decisions, which can be major factors in determining the vulnerability to and consequence of hurricanes, storms, extreme rainfall, and other flood events. Congress has established various federal programs that may be available to assist U.S. state, local, and territorial entities and tribes in reducing flood risks. Among the most significant federal activities to reduce communities’ flood risks and improve flood resilience are assistance with infrastructure projects (e.g., levees, shore protection) and other flood mitigation activities that save lives and reduce property damage; and mitigation incentives for communities that participate in the National Flood Insurance Program (NFIP). This report provides an overview of these assistance programs and the NFIP-related mitigation incentives; it also raises flood-related policy considerations associated with federal programs and practices. Assistance Programs Each federal program that provides flood-related assistance has its own focus, statutory limitations, and way of operating. Some programs are triggered by certain declarations or actions and may be available only to areas or states subject to recent disasters. These programs include the Hazard Mitigation Grant Program (HMGP) administered by the Federal Emergency Management Agency (FEMA), which is triggered by a Stafford Act disaster declaration; and Community Development Block GrantDisaster Recovery (CDBGDR) assistance administered by the Department of Housing and Urban Development (HUD), which may be available if Congress provides supplemental appropriations. Although subject to available appropriations, other federal assistance may be more broadly accessible. These assistance programs include FEMA’s Pre-Disaster Mitigation (PDM) grant program and the Flood Mitigation Assistance (FMA) grant program; U.S. Army Corps of Engineers (USACE) risk-reduction projects; U.S. Department of Agriculture (USDA) acquisition of floodplain easements and flood-risk-reduction project grants; National Oceanic and Atmospheric Administration (NOAA) coastal resilience grants; U.S. Environmental Protection Agency (EPA) support for state-administered loan programs and direct credit assistance for stormwater management; and HUD’s Community Development Block Grant (CDBG) programs. Flood Insurance In order for federal flood insurance to be available to homeowners and business owners in a community, the NFIP requires participating communities to develop and adopt flood maps and enact minimum floodplain standards based on those flood maps. The NFIP encourages communities to adopt and enforce floodplain management regulations such as zoning codes, building codes, subdivision ordinances, and rebuilding restrictions. The NFIP also encourages communities to reduce flood risk through three programs: the FMA, Community Rating System, and Increased Cost of Compliance (ICC) coverage. Context for Federal Activities and Policy Considerations Since the 1960s, the federal role in responding to catastrophic and regional flooding has expanded both through the NFIP and federal disaster response and recovery efforts. Hurricane Katrina and subsequent events have generated concern about the nation’s and the federal government’s financial exposure to flood losses and floods’ economic, social, and public health impacts on individuals and communities. Members of Congress and other decisionmakers are faced with numerous policy questions, including whether federal programs provide incentives or disincentives for state and local entities to prepare for floods and manage their flood risks, and whether changes to how federal assistance programs and the NFIP are implemented and funded could result in long-term resilience benefits.

Nov 13, 2017

Potential Effects of a U.S. NAFTA Withdrawal: Agricultural Markets

The North American Free Trade Agreement (NAFTA) entered into force on January 1, 1994, establishing a free trade area as part of a comprehensive economic and trade agreement among the United States, Canada, and Mexico. Currently, the United States is renegotiating the agreement. However, repeated threats by President Trump to abandon NAFTA and other actions by the Administration as part of ongoing efforts to “modernize” NAFTA have raised concerns that the United States could withdraw from NAFTA. Although some U.S. agricultural sectors support NAFTA renegotiation and efforts to address certain outstanding trade disputes—regarding milk and dairy products, potatoes, some fruits and vegetables, and wine—many continue to express strong support for NAFTA and oppose outright withdrawal. Possible disruptions in U.S. export markets and general uncertainty in U.S. trade policy also continue to be a concern for U.S. food and agricultural producers. Similar concerns have been raised by some in Congress who have oversight authority on industry and trade activities and who continue to monitor and conduct hearings on the ongoing NAFTA renegotiations. Trade under NAFTA provides an important market for U.S. agricultural producers and a broader choice of food products for U.S. food processors and consumers. Canada and Mexico are the two largest U.S. agricultural trading partners (combining imports and exports), accounting for 28% of the total value of U.S. agricultural exports and 39% of U.S. imports in 2016. Under NAFTA, U.S. agricultural trade with Canada and Mexico has increased significantly. Agricultural exports rose from $8.7 billion in 1992 to $38.1 billion in 2016, while imports rose from $6.5 billion to $44.5 billion over the same period. Adjusted for inflation, growth in the value of total U.S. agricultural exports and imports with its NAFTA partners has increased roughly threefold, growing at an average rate of 5-6% annually. To date, comprehensive quantitative analysis of a possible U.S. NAFTA withdrawal focused exclusively on agricultural markets is not yet available. This report looks at the potential economic effects to agricultural markets of a possible U.S. NAFTA withdrawal assuming the application of most-favored-nation (MFN) tariffs on traded agricultural products instead of the current zero tariff (i.e., duty-free trade) for selected agricultural products. MFN rates generally reflect the highest (most restrictive) rates that World Trade Organization (WTO) members can charge each other on imported goods and services. In general, the application of MFN tariffs on U.S. agricultural imports would likely raise prices both to U.S. consumers and other end-users, such as manufacturers of value-added food products. MFN tariffs on U.S. agricultural exports would, in turn, likely make U.S. products in those markets less price-competitive and more costly to foreign buyers, which could result in reduced quantities sold. Given that certain agricultural products dominate U.S. trade with Canada and Mexico—such as meat products, grains and feed, and processed foods—these products could become more costly and less competitive as MFN tariffs are imposed and other trade preferences are removed under a NAFTA withdrawal. This could result in reduced market share for U.S. products in these markets. Other potential trade impacts under a U.S. withdrawal from NAFTA could include (but are not limited to) higher prices for imported products from Canada and Mexico, reductions in agricultural imports that compete with U.S. products, disruption of integrated supply chains, general market disruption and uncertainty, economic impacts to some agricultural-producing states (both positive and negative), and a decrease of future negotiating leverage of the United States (e.g., to review and resolve disputes regarding a range of non-tariff barriers to trade).

Nov 13, 2017

Diversity Immigrant Visa Program

On October 31, 2017, a resident of Patterson, NJ, reportedly drove a truck onto a bicycle path in New York City, killing 8 and injuring 11. Authorities have described the incident as a terrorist attack, and the suspect has been identified as an immigrant from Uzbekistan. Given that the suspect reportedly entered the country on an immigrant visa obtained through the Diversity Visa program (DV program), this incident has renewed interest in the DV program and its associated “lottery.” What is the DV program? The DV program was established to increase U.S. immigrant diversity by admitting individuals from countries from which relatively few immigrants arrive. The Diversity Immigrant category was added to the Immigration and Nationality Act (INA) by the Immigration Act of 1990 (P.L. 101-649). The DV program makes 50,000 immigrant visas available annually. The formula for allocating visas is defined by statute: visas are divided among six geographic regions according to their relative populations, with their allocation weighted in favor of countries in regions that were under-represented among immigrant admissions during the past five years. The INA also limits each country to 7% of the total. An alien wishing to obtain an immigrant visa through the program must first register for the diversity visa lottery (DV lottery) with the Department of State (DOS). At the end of the registration period, a lottery randomly selects individuals who may apply for a visa. Those approved become lawful permanent residents (LPRs) upon admission to the United States. Who is eligible? To be eligible for the DV program, the INA requires that a foreign national have a high school education or two years’ experience in an occupation that requires at least two years of training or experience. The foreign national or the foreign national’s spouse must be a native of one of the countries that qualified for the DV lottery. DOS updates annually the list of eligible and ineligible countries based on the statutory formula. For FY2019, the ineligible countries (i.e., those that sent at least 50,000 immigrants to the United States over the last five years combined) are Bangladesh, Brazil, Canada, China, Colombia, Dominican Republic, El Salvador, Haiti, India, Jamaica, Mexico, Nigeria, Pakistan, Peru, Philippines, South Korea, United Kingdom (except Northern Ireland) and its dependent territories, and Vietnam. What is the process for selecting applicants and issuing diversity visas? Individuals who meet the above qualifications may register, at no charge, for the DV lottery. In FY2015, 9 million individuals registered. Those selected (also known as “lottery winners”) may then apply for an immigrant visa. DV applicants, like all other aliens wishing to come to the United States, must undergo reviews and biometric background checks performed by DOS consular officers abroad and Customs and Border Protection (CBP) immigration officers upon entry to the United States. Individuals selected for a diversity visa who are residing in the United States as nonimmigrants must undergo reviews by U.S. Citizenship and Immigration Services (USCIS) prior to adjusting to LPR status. These reviews, which include an in-person interview, are intended to ensure that the aliens are not inadmissible under the grounds spelled out in §212(a) of the INA. Grounds for inadmissibility include health, criminal history, security and terrorist concerns, public charge, illegal entry, and previous removal. Individuals outside the United States must pay $330 to DOS to apply for their immigrant visa and $220 to USCIS to receive their LPR status. DV applicants who are already present in the United States on a nonimmigrant visa and who do not wish to leave and re-enter the United States using their diversity visa must pay $1,140 (plus an $85 biometrics fee) to USCIS to adjust their status from nonimmigrant to LPR. Trends in Source Regions The origins of diversity immigrants have shifted over time (Figure 1). Foreign nationals from Europe garnered the most diversity visas in FY1995 and maintained a plurality share in FY2000. By FY2005, the African share (35%) was on par with Europe’s (38%). By FY2010, foreign nationals from Africa had gained the plurality share (48%), and Asians accounted for 30%. In FY2015, those from Africa and Asia received the largest share of diversity visas. Individuals from South America, Oceania, and North America combined accounted for no more than 7% in any of the years shown in Figure 1. Figure 1. Regions of Birth for Diversity Immigrants, FY1995-FY2015 / Source: Department of Homeland Security, Yearbook of Immigration Statistics, multiple fiscal years. Legislative Issues There have been several legislative proposals to modify or eliminate the DV program. During the 113th Congress, provisions eliminating the DV program were incorporated into the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744), which the Senate passed. Legislation introduced in the 114th Congress represented opposing aims, with at least one bill that would have doubled the number of visas and at least two that would have eliminated the program. In the 115th Congress, at least five bills have been introduced with provisions to eliminate the DV program. Those arguing against the DV program on fairness grounds cite the 4.4 million individuals with approved immigrant visa petitions who are still waiting for a visa to become available. They suggest that the 50,000 visas allocated to the DV program could be used to reduce these wait times. Ongoing debates over the priorities of the U.S. immigration system have included calls to eliminate the DV program in favor of “merit-based” immigrants with relatively high education and job skills. Concerns have also been raised over fraud and abuse associated with the DV program, including claims of human trafficking and duplicate lottery registrations. DOS and the Department of Homeland Security have revised their procedures to address these vulnerabilities. For example, DOS’s electronic registration process increases its ability to screen for duplicate and fraudulent entries. Supporters of the DV program argue that it increases fairness and promotes American goodwill by providing an avenue for individuals from under-represented parts of the world—particularly Africa—who may otherwise have no opportunity to immigrate to the United States.

Nov 9, 2017

Government Printing, Publications, and Digital Information Management: Issues and Challenges

In the past half-century, in government and beyond, information creation, distribution, retention, and preservation activities have transitioned from a tangible, paper-based process to digital processes managed through computerized information technologies. Information is created as a digital object which then may be rendered as a text, image, or video file. Those files are then distributed through a myriad of outlets ranging from particular software applications and websites to social media platforms. The material may be produced in tangible, printed form, but typically remains in digital formats. The Government Publishing Office (GPO) is a legislative branch agency that serves all three branches of the national government as a centralized resource for gathering, cataloging, producing, providing, authenticating, and preserving published information. The agency is overseen by the Joint Committee on Printing (JCP), which in 1895 was charged with overseeing and regulating U.S. government printing. GPO operates on the basis of a number of statutory authorities first granted in the 19th and 20th centuries that presume the existence of government information in an ink-on-paper format, because no other format existed when those authorities were enacted. GPO’s activities include the Federal Depository Library Program (FDLP), which provides permanent public access to published federal government information, and which last received legislative consideration in 1962. In light of the governance and technological changes of the past four decades, a relevant question for Congress might arise: To what extent can decades-old authorities and work patterns meet the challenges of digital government information? For example, the widespread availability of government information in digital form has led some to question whether paper versions of some publications might be eliminated in favor of digital versions, but others note that paper versions are still required for a variety of reasons. Another area of concern focuses on questions about the capacity of current information dissemination authorities to enable the provision of digital government information in an effective and efficient manner. With regard to information retention, the emergence of a predominantly digital FDLP may raise questions about the capacity of GPO to manage the program given its existing statutory authorities. These questions are further complicated by the lack of a stable, robust set of digital information resources and management practices like those that were in place when Congress last considered current government information policies. The 1895 printing act was arguably an expression of the state-of-the-art standard of printing technology and provided a foundation which supported government information distribution for more than a century. By contrast, in the fourth or fifth decade of transitioning from the tangible written word to ubiquitous digital creation and distribution, the way ahead is not as clear, due in part to a lack of widely understood and accepted standards for managing digital information. This report examines three areas related to the production, distribution, retention, and management of government information in a primarily digital environment. These areas include the Joint Committee on Printing; the Federal Depository Library Program; and government information management in the future.

Nov 8, 2017

The Rohingya Crises in Bangladesh and Burma

A series of interrelated humanitarian crises, stemming from more than 600,000 ethnic Rohingya who have fled Burma into neighboring Bangladesh in less than 10 weeks, pose challenges for the Trump Administration and Congress on how best to respond. The flight of refugees came following attacks on security outposts in Burma’s Rakhine State, reportedly by the Arakan Rohingya Salvation Army (ARSA), an armed organization claiming it is defending the rights of the region’s predominately Muslim Rohingya minority, and an allegedly excessive military response by Burma’s military. Some of the displaced Rohingya report that Burmese soldiers systematically killed civilians, sexually assaulted women and girls, and burned down their homes. The Burmese government and military have denied the veracity of these reports. An unknown number of Rohingya, Rakhine, and other ethnic minorities have been forced out of their villages into temporary camps within Rakhine State, while others remain isolated in their home villages under a government-imposed curfew. In Bangladesh, an estimated 700,000-900,000 Rohingya—including people who fled Burma during earlier instances of violence—require urgent humanitarian assistance. In Burma, tens of thousands are in need of humanitarian assistance, but the Burmese government and military have restricted access to the affected areas. Efforts to facilitate the voluntary and safe return of the displaced Rohingya and other ethnic minorities to their original villages face several problems. Bangladesh and Burma have been unable to agree to terms for repatriation. Many of the villages have been destroyed, raising questions about when the people can return and where they will go. It is also uncertain how many of the displaced Rohingya are willing to return to Burma, given the nation’s history of discriminatory policies and practices, including a 1982 law that effectively stripped them of their citizenship. The crises raise questions about U.S. policy toward Burma, following its transition to a civilian/military government after six decades of military rule. The day before the August 2017 attacks, a special commission established by Burma’s de facto leader, State Counsellor Aung San Suu Kyi, and headed by former U.N. Secretary General Kofi Annan, made a series of recommendations on how to end ethnic tensions in Rakhine State, including calling for the repeal of the anti-Rohingya laws and regulations. While Aung San Suu Kyi accepted most of those recommendations, it is unclear how soon and to what extent they will be implemented. The human rights allegations have led some observers to say the Burmese military is guilty of crimes against humanity, ethnic cleansing, and genocide. The Burmese government and others assert that ARSA is a terrorist organization. The United Nations Human Rights Council has created a special, fact-finding mission to investigate human rights violations in Burma, but the Burmese government and military have dismissed the allegations of widespread human rights violations and have refused to allow the fact-finding mission into Burma. The displaced Rohingya in Bangladesh may also pose a serious radicalization risk. Some Rohingya may be recruited by ARSA or Islamist extremist groups. Some Rakhine may choose to join the Arakan Army, a Rakhine-based ethnic armed organization involved in active resistance against the Burmese government. The Trump Administration and the State Department have adopted a measured approach to the emerging challenges presented by the crises in Bangladesh and Burma. The initial response was to increase humanitarian assistance to both nations by a total of $32 million, raising the amount of assistance provided since October 2016 to $95 million. New restrictions on relations with senior Burmese military officers have been imposed using existing authority. Two bills have been introduced in the 115th Congress since the August attacks and the Burmese military’s “clearance operations”—the Burma Unified through Rigorous Military Accountability Act of 2017 (BURMA Act; H.R. 4223) and the Burma Human Rights and Freedom Act of 2017 (S. 2060). Both bills would impose a visa ban on senior military officers responsible for human rights abuses in Burma, place new restrictions on security assistance and military cooperation, reinstate jadeite and ruby import bans, and require U.S opposition to international financial institution loans to Burma if the project involves an enterprise owned or directly or indirectly controlled by the military. S. 2060 also would provide an additional $104 million in humanitarian assistance, and would require the President to review Burma’s eligibility for the Generalized System of Preferences (GSP) program. This report will be updated as circumstances require.

Nov 8, 2017

Division A of H.R. 3922: The CHAMPIONING HEALTHY KIDS Act

On October 30, 2017, the House Rules Committee posted an amendment in the nature of a substitute for the Community Health And Medical Professionals Improve Our Nation Act of 2017 (CHAMPION Act, H.R. 3922). The amendment considered by the House struck the text of the CHAMPION Act and replaced it with the text of the amendment in the nature of the substitute. The amendment in the nature of a substitute is entitled the Continuing Community Health And Medical Professional Programs to Improve Our Nation, Increase National Gains, and Help Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable Act of 2017 (CHAMPIONING HEALTHY KIDS Act). In revising the language of the CHAMPION Act, the CHAMPIONING HEALTHY KIDS Act includes revised language for the CHAMPION Act in Division A. Division A would extend funding for several public health programs that had received directed appropriations through FY2017. It would also make a number of changes to these programs and would provide offsets for the proposed funding extensions. Division B of this act would, among other things, extend funding for the State Children’s Health Insurance Program (CHIP). On November 1, 2017, the House Rules Committee adopted an amendment (H.Res. 601) to this bill that would lessen the amount that would be reduced from the Public Health and Prevention Fund (PPHF), one of the offsets included in Division A. The House passed the CHAMPIONING HEALTHY KIDS Act on November 3, 2017, by a vote of 242 to 174. This report summarizes provisions in Division A of the CHAMPIONING HEALTHY KIDS Act. CRS Report R44989, Comparison of the Bills to Extend State Children’s Health Insurance Program (CHIP) Funding, summarizes provisions in Division B.

Nov 7, 2017

Public-Private Partnerships (P3s) in Transportation

Public-private partnerships (P3s) in transportation are contractual relationships typically between a state or local government, who are the owners of most transportation infrastructure, and a private company. P3s provide a mechanism for greater private-sector participation in all phases of the development, operation, and financing of transportation projects. Although there are many different forms P3s can take, this report focuses on the two types of agreements that generate the most interest and discussion: (1) design-build-finance-operate-maintain (DBFOM); and (2) long-term lease. P3s have emerged, in part, because of the growing demands on the transportation system and constraints on public resources. To date, however, the number of transportation P3s in the United States is relatively small, as is the amount of long-term private financing provided. Among the reasons for this are the availability to state and local governments of tax-preferred municipal bonds; the need for some kind of revenue stream, such as a toll, fare, or tax, to provide funding; and the fact that many states have very limited experience with P3s. Most transportation P3s to date have been in highways or marine cargo terminals; only a few have involved public transportation, intercity passenger rail, or airports. There are three main potential benefits of P3s: (1) P3s are a way to attract private capital to invest in transportation infrastructure; (2) P3s may be able to build and operate transportation facilities more efficiently than the public sector through better management and innovation in construction, maintenance, and operation; and (3) the public sector can transfer to the private-sector partner many of the risks of building, maintaining, and operating transportation infrastructure. Concerns with P3s include the types of projects involved, the risks retained by the public sector, and transportation planning. P3s that are reliant on tolls or other user fees are unlikely to address transportation issues in rural areas or on lightly traveled routes. However, P3s in these areas may be viable if based on state and local government availability payments. Although some risks are typically transferred to the private sector in a P3, the public sector may retain significant risk. P3s may have longer-term effects on the transportation system because they influence decisions about what to build and where, and can limit what other projects the government can pursue. The federal government exerts influence over the prevalence and structure of P3s through its transportation programs, funding, and regulatory oversight, but is usually not a party to a P3 agreement. The current federal role in P3s includes project loans through the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program, the authorization of private activity bonds (PABs), certain tax provisions such as depreciation schedules, state infrastructure banks, and the provision of technical advice through the U.S. Department of Transportation (DOT). Limiting the formation of P3s would predominantly entail restricting federal benefits to such projects. Two broad policy options for expanding use of P3s would be to actively encourage P3s with program incentives, but with regulatory controls to protect the public interest, or to aggressively encourage the use of P3s through program incentives and deregulation. This report discusses several possible issues and policy options that Congress may want to consider. These include P3 project evaluation and transparency, asset recycling, incentive grants, a national infrastructure bank, equity investment tax credits, and deregulation of Interstate highway tolling. The report also discusses changes to the existing TIFIA and PABs programs.

Nov 2, 2017

Natural Disasters of 2017: Congressional Considerations Related to FEMA Assistance

This Insight provides a short overview of issues Congress may consider in its oversight of the Federal Emergency Management Agency’s (FEMA’s) federal assistance during the 2017 hurricane season (e.g., Harvey, Irma, and Maria) and other disasters (e.g., fires in California). For the current status of response efforts, see official government sources and news media. For additional support, please contact available CRS experts in disaster-related issue areas. Stafford Act Declarations and Response Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act), the President may declare an emergency or major disaster to authorize federal assistance, if the capacities of state and tribal governments are overwhelmed. Generally, emergency declarations help avert further catastrophes, whereas major disaster declarations address significant needs following eligible disasters. For example, in 2017, emergency declarations were made prior to the landfall of hurricanes, as well as to address the emerging threats of a possible dam failure in California. Major disaster declarations have been made for a wide range of disasters. As authorized by numerous sections of the Stafford Act (e.g., §302) and the Homeland Security Act of 2002 (e.g., §504), FEMA is responsible for coordinating the federal disaster response, as guided by the National Response Framework and subcomponent policies. Many deployable federal assets have been used in responding to the 2017 disasters. Other federal agencies are frequently incorporated by, and compensated for, their federal response through Mission Assignments. Congress may evaluate whether the federal response support for the 2017 disasters has been effectively led by FEMA and supported by other federal agencies, and if not, use forthcoming after-action reports (similar to those following previous disasters, such as Hurricane Sandy) to inform congressional oversight and possible reforms. Federal Financial Assistance from FEMA FEMA has multiple disaster assistance programs, including: The Individual Assistance (IA) Program comprised of: (1) Mass Care and Emergency Assistance, (2) Crisis Counseling Assistance and Training Program, (3) Disaster Unemployment Assistance, (4) Disaster Legal Services, (5) Disaster Case Management, and (6) the Individuals and Households Program. IA can include some or all of these programs, depending on what is requested by the governor of the affected state or the tribal leader and approved by FEMA. Congress may evaluate the numerous factors FEMA considers when it decides whether to recommend that IA be provided following a major disaster. The Public Assistance (PA) Grant Program provides grants to tribal, state, local governments, and certain private nonprofit organizations to fund emergency protective services, conduct debris removal operations, and repair or replace damaged public facilities. Congress may consider the cost-share required for this assistance, how the PA Program complements other federal assistance, and whether FEMA’s recent minimum standards policy provides sufficient mitigation against future disasters on PA-funded replacement projects. Hazard Mitigation Assistance (HMA) Programs encompass three separately authorized programs: the Hazard Mitigation Grant Program (HMGP); the Pre-Disaster Mitigation program; and the Flood Mitigation Assistance program. HMGP receives significantly more funding following major disaster declarations than the other two programs. Congress may consider if these HMA programs are sufficiently coordinated with other federal mitigation programs (e.g., from HUD and the U.S. Army Corps of Engineers), and resourced to adequately reduce future risk to disasters. Fire Mitigation Assistance Grants (FMAGs) provide various forms of federal fire suppression assistance for “declared” fires on certain public or private forest land or grassland that might become a major disaster. Congress may consider whether this assistance, coupled with other federal fire assistance, is sufficient to address a perceived increase in wildfire risk, and whether federal wildfire funding mechanisms should be reformed. The above FEMA grant programs all have state cost-share requirements. PA cost-shares can be adjusted by the Administration, but IA and HMGP cost-shares are set in law. Congress has occasionally adjusted cost-shares for specific states and disasters, such as after the 2005 Gulf Coast hurricanes. Major disaster declarations for Florida, Puerto Rico, Texas, and U.S. Virgin Islands related to hurricanes in 2017 have all had cost-share adjustments for PA. FEMA also administers non-grant financial assistance: The National Flood Insurance Program (NFIP) is the primary source of flood insurance coverage for residential properties in the United States. The NFIP has implemented temporary changes to the claims process to allow policyholders to receive funds more quickly in some of the areas affected by floods in 2017. However, past data on participation rates suggest that many properties in the Special Flood Hazard Areas (SFHAs) that have been affected by the hurricanes may not have flood insurance. By law, federal assistance to the owners of these uninsured properties is more restricted than to the owners of properties with insurance or those living outside the SFHA. Key provisions of the NFIP were reauthorized through December 8, 2017 (P.L. 115-56, Division D, §130). OMB has requested revisions to the NFIP. These and other reform ideas may be considered by Congress before expiration of these authorities. The Community Disaster Loan (CDL) Program provides loan assistance to governments to compensate for the loss of tax and other revenues following disasters. Recent provisos in appropriations for CDLs afford discretion to the Trump Administration in providing these loans, so past guidance on CDLs may not apply to future loans. Historically, these loans have frequently been forgiven. Funding for FEMA Assistance FEMA’s Disaster Relief Fund (DRF) is the primary funding source for immediate response and relief provided by FEMA in the wake of disasters. As Hurricane Harvey approached the Texas coast on August 25, 2017, the DRF had approximately $3.5 billion on hand. On August 28, FEMA implemented an “immediate needs funding restriction,” limiting obligations from the DRF for some longer-term recovery and mitigation projects to preserve DRF balances for immediate response needs. $7.4 billion in supplemental appropriations for the DRF were provided through P.L. 115-56, and the continuing resolution in the act provided additional resources. As a result, the funding restriction was lifted on October 2, 2017. $18.67 billion more was appropriated for the DRF in P.L. 115-72, although a $4.9 billion transfer to the Disaster Assistance Direct Loan Program account (which funds CDLs) and a $10 million transfer to the DHS Office of Inspector General reduced the effective appropriation to $13.76 billion. A third supplemental appropriations request is expected from the White House in November. The NFIP was not designed to retain funding to cover claims for truly extreme events; instead, the law allows the Program to borrow money from the Treasury for such events. FEMA borrowed $5.285 billion from the Treasury to meet initial claims from Hurricane Harvey, which reached the borrowing limit of $30.425 billion. As requested by the Administration, P.L. 115-72 will cancel $16 billion of NFIP debt, reducing the NFIP debt to $14.425 billion.

Nov 2, 2017

Coverage in the Private Health Insurance Market

Nov 2, 2017

The National Science Foundation: FY2018 Appropriations and Funding History

The National Science Foundation (NSF) supports basic research and education in the non-medical sciences and engineering. NSF is a major source of federal support for U.S. university research, especially in certain fields such as computer science. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support. Overall, the Trump Administration is seeking $6.653 billion for NSF in FY2018, an $819 million decrease (-11%) from the FY2017 enacted level of $7.472 billion. NSF has six appropriations accounts: Research and Related Activities (RRA), Education and Human Resources (EHR), Major Research Equipment and Facilities Construction (MREFC), Agency Operations and Award Management (AOAM), National Science Board (NSB), and Office of Inspector General (OIG). The FY2018 request would decrease total budget authority primarily in three accounts relative to FY2017 enacted funding: RRA by $672 million (-11%), EHR by $119 million (-14%), and MREFC by $26 million (-12%). The request would provide slight decreases to AOAM ($1.5 million decrease, -0.5%) and OIG ($200,000 decrease, -1.3%), and no change for NSB. As reported by the House Committee on Appropriations, H.R. 3267 would provide a total of $7.340 billion to NSF for FY2018. This amount is $133 million below (-1.8%) the FY2017 enacted funding level and $687 million (10.3%) above President Trump’s FY2018 request. The bill would keep funding for the RRA, EHR, NSB, and OIG accounts the same as the FY2017 enacted amounts and decrease the MREFC and AOAM accounts by $131 million (-62.8%) and $1.5 million (-0.5%), respectively. The text of H.R. 3267 was incorporated into the omnibus appropriations bill, the Make America Secure and Prosperous Appropriations Act, 2018 (H.R. 3354, Division C), and passed, as amended, by the House on September 14, 2017. H.R. 3354 would provide the same total funding amounts for NSF accounts as provided in H.R. 3267. As reported by the Senate Committee on Appropriations, S. 1662 would provide a total of $7.311 billion to NSF for FY2018. This amount is $161 million below (-2.2%) the FY2017 enacted funding level, and $658 million above (9.9%) President Trump’s FY2018 funding request. Compared to the FY2017 enacted level, this bill would keep funding for the NSB and OIG accounts the same and decrease funding for four accounts: RRA by $116 million (-1.9%), MREFC by $26.2 million (-12.5%), EHR by $17.6 million (-2%), and AOAM by $1.5 million (-0.5%). The Continuing Appropriations Act, 2018 (P.L. 115-56, Division D), signed by the President on September 8, 2017, provides funding for NSF through December 8, 2017, at the FY2017 level, subject to a 0.6791% across-the-board decrease. Overall growth in the NSF budget has slowed since FY2003. Average annual growth in NSF appropriations was 8% between FY1997 and FY2003, 4% from FY2004 to FY2010, and 1% between FY2011 and FY2017. Among NSF’s appropriations accounts, RRA has accounted for the lion’s share of growth in obligations since FY2003. Agency appropriations levels were last authorized in FY2010 and expired in FY2013. Various reauthorization measures were introduced in the 114th Congress that included proposed funding levels; none were enacted. In the 115th Congress, the American Innovation Act (H.R. 1569 and S. 641), introduced as companion bills in March 2017, would authorize increasing appropriations for NSF through FY2021 and adjust the discretionary spending limits to accommodate those increases.

Nov 2, 2017

Ukraine: Background and U.S. Policy

In February 2014, protests over the Ukrainian government’s decision to postpone concluding an association agreement that would lead to closer relations with the European Union (EU) culminated in violence and the collapse of then-President Viktor Yanukovych’s government. The government that followed pledged to embrace pro-Western reforms, and an energized civil society supported its efforts. Within weeks, the new government was forced to confront Russian armed interventions in southern and eastern Ukraine. These culminated in Russia’s occupation of Ukraine’s Crimea region in March 2014 and a protracted conflict in eastern Ukraine, where observers consider that the Russian government has fostered and supported pro-Russian separatists. Even while waging a defensive conflict, Ukraine’s government under President Petro Poroshenko has professed a commitment to economic reform, Western integration, and democratic norms. At the same time, many observers consider that Ukraine’s reforms remain fragile and that the government has progressed slowly in certain areas. International donors and domestic civil society organizations continue to encourage the Ukrainian government to implement necessary measures, including with regard to fighting corruption. After an economic decline in 2014-2015, some signs of financial and economic stabilization have emerged, due in part to international assistance including a multibillion dollar International Monetary Fund (IMF) loan package. Observers caution, however, that economic growth depends on continuation of critical reforms. The United States has long supported Ukraine’s pro-Western orientation and reform efforts. It supports the restoration of Ukraine’s territorial integrity, including with respect to Crimea, as well as implementation of the Minsk agreements that would establish a cease-fire and conflict settlement in eastern Ukraine. In 2014, the United States, in coordination with the European Union and others, imposed sanctions on Russia for its actions in Ukraine. The United States is a leading contributor of foreign assistance to Ukraine, including over $300 million a year since FY2015 in nonmilitary, nonhumanitarian assistance. The United States also provides substantial military assistance to Ukraine, including via a newly established Ukraine Security Assistance Initiative that provides “appropriate security assistance and intelligence support” to help Ukraine defend against aggression and support its sovereignty and territorial integrity. The Trump Administration has continued a policy of support to Ukraine. President Donald Trump and Ukrainian President Poroshenko have met twice, in June and September 2017. The Administration requested relatively substantial economic and military assistance to Ukraine for FY2018. In July 2017, Secretary of State Rex Tillerson announced the appointment of a new U.S. Special Representative for Ukraine Negotiations, elevating the U.S. role in the conflict settlement process. Secretary Tillerson has stated repeatedly that Ukraine-related sanctions on Russia will remain in place “until Moscow reverses the actions that triggered” them. The U.S. Congress has actively participated in efforts to address the Ukraine conflict since its onset. Many Members have condemned Russia’s annexation of Crimea and support for separatists in eastern Ukraine and pushed to impose and retain sanctions against Russia for its actions. Congress has also supported substantial economic and security assistance for Ukraine. Key legislation includes the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 (P.L. 113-95), the Ukraine Freedom Support Act (P.L. 113-272), and the Countering Russian Influence in Europe and Eurasia Act of 2017 (P.L. 115-44, Title II).

Nov 1, 2017

U.S. Liquefied Natural Gas (LNG) Exports: Prospects for the Caribbean

With the advent of shale gas, the United States has transformed from a growing importer of natural gas to a burgeoning exporter. Exports by pipeline and ship have grown in the last couple of years. Liquefied natural gas (LNG) exports in 2013 were about 13 billion cubic feet (bcf), while in 2016 that figure jumped to almost 184 bcf. This increase can mostly be attributed to the opening of the Sabine Pass Liquefaction facility in Louisiana in February 2016. Despite the large volumes associated with the large-scale U.S. LNG export terminals, like Sabine Pass Liquefaction, there has also been a growing interest in small-scale LNG exports, mainly in cryogenic containers, to the Caribbean. Currently, the U.S. Department of Energy (DOE), which permits the export of natural gas as a commodity, has received 13 applications (four to export exclusively to free trade agreement (FTA) countries, two exclusively to non-FTA countries, and seven to either FTA or non-FTA countries) from companies seeking approval to export relatively small quantities of LNG primarily to destinations in the Caribbean, Central America, and South America. Of the 13, 11 applications are to export natural gas to FTA countries, and all have been approved. Seven of the nine applications to export to non-FTA countries have been approved, with two non-FTA applications under review. Globally, large quantities of LNG liquefaction capacity are projected to come into operation within the next decade. Most of those projected projects, including those in the United States, are large-capacity facilities targeting the biggest LNG importers, like Japan and South Korea. However, there is a subset of the U.S. projects that are small-scale in capacity and targeting a small market—the Caribbean. In 2016, three Caribbean countries—Barbados (0.10 bcf), the Dominican Republic (41.32 bcf), and Jamaica (0.35 bcf)—imported LNG. Puerto Rico was the largest importer of LNG in the region, with 57.56 bcf in 2016, predominantly on tankers. Barbados and Dominican Republic imported LNG from the United States. Puerto Rico, in part because of the Jones Act, is not able to import LNG on LNG tankers, but has imported LNG from the continental United States in cryogenic containers. The United States has not made an LNG tanker in almost 40 years. On September 1, 2017, the DOE announced a proposed rule intended to speed up the approval process for small-scale exports of LNG from U.S. export facilities. To obtain the DOE expedited process for small-scale natural gas exports under the proposed rule, projects must meet two criteria: (1) the proposed facility cannot export more than 0.14 bcf per day (bcfd) or 51.10 bcf per year, and (2) the proposed facility must qualify for a categorical exclusion under DOE’s National Environmental Policy Act (NEPA) regulations. On October 18, 2017, S. 1981 was introduced to amend the Natural Gas Act (NGA) to provide an expedited approval process for small-scale LNG projects. Similar to the DOE’s proposed rule, projects with a capacity of 0.14 bcfd or 51.1 bcf per year would be “deemed to be consistent with the public interest,” and the permit would be “granted without modification or delay.”

Nov 1, 2017

Federal Crop Insurance: Fruits, Vegetables and Specialty Crops

Nov 1, 2017

Wildfire Management Funding: Background, Issues, and FY2018 Appropriations

The federal government’s wildfire (or wildland fire) management responsibilities are fulfilled primarily by the Forest Service (FS, in the U.S. Department of Agriculture) and the Department of the Interior (DOI). These responsibilities include prevention, detection, response, and recovery related to fires that begin on federal lands. These responsibilities are accomplished through activities such as preparedness, suppression, fuel reduction, and site rehabilitation, among others. There are several ongoing concerns regarding federal wildfire management. These concerns include the total federal costs of wildfire management, the strategies and resources used for wildfire management, and the impact of wildfire on both the quality of life and the economy of communities surrounding wildfire activity. Many of these issues are of perennial interest to Congress, with annual wildfire management appropriations being one indicator of how Congress prioritizes and addresses certain wildfire management concerns. Congress provides annual appropriations to both FS and DOI for these activities through the Interior, Environment, and Related Agencies appropriations bill, although the bulk of the appropriations go to FS. Wildfire activities are funded in two accounts for each agency: Wildland Fire Management (WFM) and Federal Land Assistance, Management, and Enhancement Act (FLAME) reserve accounts. Over the past 10 years (FY2008-FY2017), Congress has appropriated an average of $3.72 billion annually, with $4.18 billion combined to both FS and DOI in FY2017. The Administration requested a combined $3.72 billion in FY2018, a 12% decrease from FY2017 enacted levels. On September 14, 2017, the Housed passed H.R. 3354, an omnibus measure covering all 12 appropriations bills, including the FY2018 Interior, Environment, and Related Agencies bill. This bill would provide $3.85 billion combined for wildfire purposes, an 8% decrease from FY2017 enacted levels and 3% above the Administration’s requested levels. The Administration’s FY2018 request also proposed restructuring FS and DOI’s appropriations accounts, in some identical ways (e.g., eliminating funding for both the FLAME suppression accounts) but also in some different ways (e.g., moving funding for hazardous fuels management). These budget restructuring proposals may provide some benefits for FS or DOI, such as providing agency funds designated for the same activity in one account each instead of across two accounts. Restructuring the budget may have some potential drawback as well. For example, changing accounts may complicate analysis to inform future appropriations decisions or hinder the ability to evaluate FS and DOI’s performance. Congress is debating several issues related to federal funding for wildfire management. They include the level of federal spending on wildland fire management as well as the effectiveness of that spending (e.g., whether the funding is allowing agencies to meet wildfire management targets). Congress also faces in some years requests from the agencies for additional appropriations during severe fire activity. Congress has frequently provided additional funding for wildfire management above the level in the annual appropriations bill, usually for suppression purposes. The recurring need for supplemental funds raises questions about the accuracy of the budgeting process for wildfire funding and how the agencies estimate wildfire suppression funding requirements, among other issues. This report provides an overview of the accounts that fund wildfire management activities and historical wildfire management appropriations data, as well as information on FY2018 appropriations.

Oct 31, 2017

Overtime Exemptions in the Fair Labor Standards Act for Executive, Administrative, and Professional Employees

The Fair Labor Standards Act (FLSA) is the primary federal statute providing labor standards for most, but not all, private and public sector employees. The FLSA standards require that “non-exempt” employees working excess hours in a workweek receive pay at the rate of one-and-a-half times their regular rate for hours worked over 40 hours. The requirements in the FLSA for overtime pay beyond this threshold refer to the “maximum hours,” but the FLSA does not actually limit the number of hours that may be worked. Instead, it establishes standards for the pay required for hours beyond 40 hours in a workweek. The FLSA also provides several exemptions to the maximum hours requirement, some of the largest of which are the EAP (executive, administrative, and professional employees, or “white collar”) exemptions. In effect, these exempt employers from overtime pay requirements for certain employees. The FLSA authorizes the U.S. Department of Labor (DOL) to “define and delimit” the EAP exemptions, rather than setting the specific parameters of the exemptions in the law itself. Since defining and delimiting the EAP exemptions upon the enactment of the FLSA in 1938, DOL has adjusted their parameters eight additional times, most recently in a 2016 rule. In August 2017, a U.S. District Court invalidated the 2016 rule and DOL has subsequently indicated that it is in the process of formulating a new proposal on the EAP exemptions. As will be discussed in detail in the remainder of this report, the major features of DOL’s rulemaking on the EAP exemptions are as follows: In every rulemaking since 1938, DOL has required that EAP employees meet three tests to qualify for exemption from overtime pay (i.e., when employees are exempt, employers are not required to pay them for work in excess of 40 hours): (1) exempt employees must perform certain EAP duties (“duties” test), (2) exempt employees must be salaried (“salary basis” test), and (3) exempt employees must earn a salary in excess of the level set by DOL (“salary level” test). From 1949 to 2004, DOL used a “long” duties test paired with a relatively lower salary level along with a “short” duties test paired with a relatively higher salary level to determine exemption for EAP employees. The main difference between the long and short duties tests was a quantitative limit in the long test on the amount of time an EAP employee could spend performing nonexempt work (no more than 20% in a workweek). During this 55-year period of using long and short tests, the salary level for the short test averaged 149% of the salary for the long test. The logic of using the two approaches was that higher-salaried employees were more likely to meet all requirements for exemption, while lower-salaried employees needed a more-stringent duties test to qualify for exemption. In the 2004 rulemaking, DOL switched from the long and short tests to a standard duties test and salary level test for exemption. The standard duties test did not include a quantitative limit on the percentage of time performing nonexempt work, making it closer in nature to the defunct short duties test. In addition, the new standard salary level test was lower than the inflation-adjusted salary levels used in the previous short tests. In other words, the 2004 rule generally paired a short duties test with a salary level below the short test levels used in the past. The 2016 rule, which was subsequently invalidated, increased the standard salary level and left the standard duties test unchanged. Compared to the six previous rulemakings using the short and/or standard tests for exemption, the salary level in the 2016 rule ($913 per week) is below the inflation-adjusted levels in all but the 2004 rule. In addition, the ratio of the salary level test to the weekly minimum wage equivalent (40 hours per week at the prevailing minimum wage) in the 2016 rule is 3.15. The average ratio at the time of enactment of each new EAP salary threshold from 1949 through 2016 is 2.99, with a high of 3.33 (1949) and a low of 2.21 (2004). Since 1938, measures of the salary level have fluctuated according to DOL’s identification of data sources most suitable for studying wage distributions and the department’s determinations of the proportion and types of workers who should be below salary thresholds, as well as its determinations of whether regional, industry, or cost-of-living considerations should be factored into salary tests.

Oct 31, 2017

The Federal Assets Sale and Transfer Act of 2016: Background and Key Provisions

Real property disposal is the process by which federal agencies identify and then transfer, donate, or sell real property they no longer need. Disposition is an important asset management function because the costs of maintaining unneeded properties can be substantial. Moreover, properties the government no longer needs may be used by state or local governments, nonprofits, or businesses to provide benefits to the public. Finally, the government loses potential revenue when it holds onto certain unneeded properties that might be sold for a profit. Despite these drawbacks, federal agencies hold thousands of unneeded and underutilized properties. Agencies have argued that they are unable to dispose of these properties for several reasons. First, there are statutorily prescribed steps in the disposal process that can take months to complete. Second, properties may not be appealing to potential buyers or lessees if they require major repairs or environmental remediation—steps for which agencies lack funding to complete before bringing a property to market. Third, key stakeholders in the disposal process—including local governments, nonprofit organizations, and businesses—are often at odds over how to dispose of properties. In addition, Congress may be limited in its capacity to conduct oversight of the disposal process because it currently lacks access to reliable, comprehensive real property data. The General Services Administration (GSA) maintains a database with information on most federal buildings, but those data are provided to Congress on a limited basis. Moreover, the quality of the information in the database has been questioned, in part because of inconsistent reporting of key data elements, such as how much space within a given building is unneeded. The lack of data may also hinder congressional oversight on the extent to which agencies enter into leases rather than purchase space. Leasing space is typically more expensive than owning, and the government’s “overreliance on costly leased space” is one of the primary reasons federal real property is designated as a “high risk” issue by the Government Accountability Office (GAO). The Federal Assets Sale and Transfer Act of 2016 (P.L. 114-287) established a new, centralized process for disposing of unneeded space. Under FASTA, agencies are required to develop a list of disposal recommendations, which could include the sale, transfer, conveyance, consolidation, or outlease of any unneeded space, among other options. These recommendations are then to be submitted to the GSA Administrator and the Director of the Office of Management and Budget (OMB) for review and revision. The revised list of recommendations is then vetted by a newly established Public Buildings Reform Board, and returned to the OMB Director for final approval or disapproval. FASTA may address some of the obstacles agencies face when disposing of unneeded space. Properties on the recommendation list are exempt from certain statutory requirements, such as screening for public benefit, and FASTA provides funding for agencies to implement the board’s recommendations. The use of a board to make disposal decisions may also reduce the impact of stakeholder conflict. In addition, FASTA requires GSA to create a public database with information that may enhance congressional oversight. There may be drawbacks to FASTA. The law does not provide Congress with an opportunity to vote for or against the list of recommendations, nor is Congress directly involved in the creation of the list. It is possible that philosophical differences between the board and the OMB Director could lead to an impasse that would effectively shut down the FASTA disposal process. The required database may not include some information that could be useful to Congress, such as the repair needs and condition of each building.

Oct 31, 2017

Taiwan: Issues for Congress

Taiwan, which officially calls itself the Republic of China (ROC), is an island democracy of 23 million people located across the Taiwan Strait from mainland China. It is the United States’ tenth-largest trading partner. Since January 1, 1979, the U.S. relationship with Taiwan has been unofficial, a consequence of the Carter Administration’s decision to establish diplomatic relations with the People’s Republic of China (PRC) and break formal diplomatic ties with self-ruled Taiwan, over which the PRC claims sovereignty. The Taiwan Relations Act (TRA, P.L. 96-8; 22 U.S.C. 3301 et seq.), enacted on April 10, 1979, provides a legal basis for the unofficial U.S.-Taiwan relationship. It also includes commitments related to Taiwan’s security. The PRC considers unofficiality in the U.S.-Taiwan relationship to be the basis for the U.S.-PRC relationship. Some Members of Congress have urged the executive branch to re-visit rules intended to distinguish the unofficial U.S.-Taiwan relationship from official U.S. relationships with diplomatic partners, in order to accord Taiwan greater dignity and respect. The PRC continues to threaten the use of force to bring about Taiwan’s unification with mainland China. Beijing codified that threat in 2005, in the form of an Anti-Secession Law. The United States terminated its Treaty of Mutual Defense with Taiwan as of January 1, 1980, but on the basis of the Taiwan Relations Act, it has remained involved in supporting Taiwan’s military. Initially, support was focused on arms sales, which Taiwan Relations Act calls for “to enable Taiwan to maintain a sufficient self-defense capability.” Starting in 1997, the security relationship broadened to include dialogues, training and military education opportunities for Taiwan military personnel, and support for other “non-hardware aspects of military capability.” After eight years of relative stability in the cross-Strait relationship during the administration of former Taiwan President Ma Ying-jeou (2008-2016), tensions between Taiwan and the PRC leadership have risen under current President Tsai Ing-wen of Taiwan’s Democratic Progressive Party (DPP). The main point of disagreement is the long-standing issue of Taiwan’s sovereignty. Beijing insists that President Tsai commit to the notion that Taiwan and mainland China are parts of “one China.” President Tsai has been unwilling to make such a commitment. Since President Tsai’s election in January 2016, Beijing has progressively increased pressure on her government. Among other moves, it has established diplomatic relations with three countries that previously recognized Taiwan, pressured host countries to force Taiwan’s unofficial representative offices to change their names, blocked Taiwan’s participation as an observer at international meetings, stepped up deployments of the PRC military near Taiwan, reduced the number of mainland Chinese tourists visiting Taiwan, demanded that other countries return Taiwan citizens accused of crimes to the PRC, rather than Taiwan, and, for the first time, tried a Taiwan activist on charges of attempted subversion of the PRC state. Questions for Congress include whether the U.S. government should seek to support Taiwan in the face of mounting pressure from the PRC, and if so, how to balance such support with the U.S. interest in peace and stability across the Taiwan Strait and the desire for constructive relations with the PRC The 115th Congress passed FY2017 appropriations legislation (P.L. 115-31) to fund the American Institute in Taiwan, through which the United States conducts relations with Taiwan. FY2018 appropriations legislation (H.R. 3354 and S. 1780) is pending. Other pending legislation includes the National Defense Authorization Act for FY2018 (H.R. 2810 and S. 1519), the Taiwan Security Act of 2017 (S. 1620), the Strengthening Security in the Indo-Asia-Pacific Act (H.R. 2621), the Taiwan Travel Act (S. 1051 and H.R. 535), a bill “To direct the Secretary of State to regain observer status for Taiwan in the World Health Organization” (H.R. 3320), and a resolution calling for negotiations to enter into a bilateral trade agreement with Taiwan (H.Res. 271).

Oct 30, 2017

Renegotiating NAFTA and U.S. Textile Manufacturing

When the North American Free Trade Agreement (NAFTA) was negotiated more than two decades ago, textiles and apparel were among the industrial sectors most sensitive to the agreement’s terms. NAFTA, which was implemented on January 1, 1994, has encouraged the integration of textile and apparel production in the United States, Canada, and Mexico. For example, under NAFTA’s “yarn-forward” rule of origin, textiles and apparel benefit from tariff-free treatment in all three countries if the production of yarn, fabric, and apparel, with some exceptions, is done within North America. The United States maintains a bilateral trade surplus in yarns and fabrics with its NAFTA partners. In 2016, the United States had a $4.1 billion surplus in yarns and fabrics and a positive balance of around $720 million in made-up textile products (such as home textiles and furnishings) with Canada and Mexico. U.S. exports of yarns and fabrics shipped to Mexico and Canada were valued at close to $6 billion last year. In apparel, the United States had a trade surplus with Canada of $1.4 billion and a trade deficit with Mexico of $2.7 billion in 2016. On May 18, 2017, the Trump Administration notified Congress of its intent to renegotiate the agreement. In July 2017, the Administration announced specific goals for textiles and apparel among its renegotiating objectives, which include improving competitive opportunities for U.S. textile and apparel products, but also taking into account U.S. import sensitivities. Also germane to textiles and apparel are several other renegotiating objectives, such as enhancing customs enforcement to prevent unlawful transshipment of these goods from outside the region and ensuring that requirements for use of domestic textiles and apparel in U.S. government purchases primarily benefit producers located in the United States. NAFTA renegotiation started in August 2017. There is widespread support for continuation of the agreement among U.S. textile and apparel producers, although there are significant differences of opinion with respect to certain provisions. In particular, U.S. textile manufacturers generally favor eliminating all exceptions to NAFTA’s yarn-forward rule, whereas U.S. retailers and apparel groups oppose tightening the rule. If the United States were to exit NAFTA, imports of textiles from Mexico and Canada would face U.S. tariffs as high as 20%, and imports of apparel would have tariff rates of up to 32%. U.S. exports of textiles and apparel could face higher tariff rates entering Canada and Mexico. One possibility is that U.S. withdrawal from NAFTA could lead U.S. retailers and apparel brands to source more of their goods from Asia, which could reduce demand for U.S.-made yarns and fabrics within the NAFTA region.

Oct 30, 2017

The North Korean Nuclear Challenge: Military Options and Issues for Congress

North Korea’s apparently successful July 2017 tests of its intercontinental ballistic missile capabilities, along with the possibility that North Korea (DPRK) may have successfully miniaturized a nuclear warhead, have led analysts and policymakers to conclude that the window for preventing the DPRK from acquiring a nuclear missile capable of reaching the United States is closing. These events appear to have fundamentally altered U.S. perceptions of the threat the Kim Jong-un regime poses to the continental United States and the international community, and escalated the standoff on the Korean Peninsula to levels that have arguably not been seen since 1994. A key issue is whether or not the United States could manage and deter a nuclear-armed North Korea if it were to become capable of attacking targets in the U.S. homeland, and whether taking decisive military action to prevent the emergence of such a DPRK capability might be necessary. Either choice would bring with it considerable risk for the United States, its allies, regional stability, and global order. Trump Administration officials have stated that “all options are on the table,” to include the use of military force to “denuclearize,”—generally interpreted to mean eliminating nuclear weapons and related capabilities—from that area. One potential question for Congress is whether, and how, to employ the U.S. military to accomplish denuclearization, and whether using the military might result in miscalculation on either side, or perhaps even conflict escalation. Questions also exist as to whether denuclearization is the right strategic goal for the United States. This is perhaps because eliminating DPRK nuclear or intercontinental ballistic missile (ICBM) capabilities outside of voluntary denuclearization, and employing military forces and assets to do so, would likely entail significant risks. In particular, any move involving military forces by either the United States/Republic of Korea (U.S./ROK) or the DPRK might provoke an escalation of conflict that could have catastrophic consequences for the Korean Peninsula, Japan, and the East Asia region. In this report, CRS identifies seven possible options, with their implications and attendant risks, for the employment of the military to denuclearize North Korea. These options are maintaining the military status quo, enhanced containment and deterrence, denying DPRK acquisition of delivery systems capable of threatening the United States, eliminating ICBM facilities and launch pads, eliminating DPRK nuclear facilities, DPRK regime change, and withdrawing U.S. military forces. These options are based entirely on open-source materials, and do not represent a complete list of possibilities. CRS cannot verify whether any of these potential options are currently being considered by U.S. and ROK leaders. CRS does not advocate for or against a military response to the current situation. Conservative estimates anticipate that in the first hours of a renewed military conflict, North Korean conventional artillery situated along the Demilitarized Zone (DMZ) could cause tens of thousands of casualties in South Korea, where at least 100,000 (and possibly as many as 500,000) U.S. soldiers and citizens reside. A protracted conflict—particularly one in which North Korea uses its nuclear, biological, or chemical weapons—could cause enormous casualties on a greater scale, and might expand to include Japan and U.S. territories in the region. Such a conflict could also involve a massive mobilization of U.S. forces onto the Korean Peninsula, and high military casualty rates. Complicating matters, should China choose to join the conflict, those casualty rates could grow further, and could potentially lead to military conflict beyond the peninsula. Some analysts contend, however, that the risk of allowing the Kim Jong-un regime to acquire a nuclear weapon capable of targeting the U.S. homeland is of even greater concern than the risks associated with the outbreak of regional war, especially given Pyongyang’s long history of bombastic threats and aggressive action toward the United States and its allies and the regime’s long-stated interest in unifying the Korean Peninsula on its terms. Estimating the military balance on the peninsula, and how military forces might be employed during wartime, requires accounting for a variety of variables and, as such, is an inherently imprecise endeavor. As an overall approach to building and maintaining its forces, the DPRK has emphasized quantity over quality, and asymmetric capabilities including weapons of mass destruction and its special operations forces. The Republic of Korea, by contrast, has emphasized quality over quantity, and maintains a highly skilled, well-trained, and capable conventional force. Most students of the regional military balance contend that overall advantage is with the U.S./ROK, assuming that neither China nor Russia become involved militarily. Should they do so, the conflict would likely become exponentially more complicated. As the situation on the Korean Peninsula continues to evolve, Congress may consider whether, and if so under what circumstances, it might support U.S. military action. Congress could also consider the risks associated with the possible employment of military force on the Korean Peninsula against North Korea; the efficacy of the use of force to accomplish the Trump Administration’s strategic goals; whether and when a statutory authorization for the use of U.S. forces might be necessary, and whether to support such an authorization; what the costs might be of conducting military operations and post-conflict reconstruction operations, particularly should a conflict on the Korean Peninsula escalate significantly; the consequences for regional security, regional alliances, and U.S. security presence in the region more broadly; and the impact that renewed hostilities on the Korean Peninsula might have for the availability of forces for other theaters and contingencies.

Oct 27, 2017

Niger: Frequently Asked Questions About the October 2017 Attack on U.S. Soldiers

A deadly attack on U.S. soldiers in Niger and their local counterparts on October 4, 2017, has prompted many questions from Members of Congress about the incident. It has also highlighted a range of broader issues for Congress pertaining to oversight and authorization of U.S. military deployments, evolving U.S. global counterterrorism activities and strategy, interagency security assistance and cooperation efforts, and U.S. engagement with countries historically considered peripheral to core U.S. national security interests. This report provides background information in response to the following frequently asked questions: What is the security situation in Niger? How big is the U.S. military presence in Niger? For what purposes are U.S. military personnel in Niger, and what role has Congress played in the U.S. military presence there? Is the U.S. military presence in Niger related to the 2001 Authorization for Use of Military Force (AUMF)? What is the state of U.S.-Niger relations and aid? Where else in Africa are U.S. military personnel deployed? Medical evacuation: What is the “golden hour” and does it apply to troop deployments in Africa? What are the broader implications of building partner capacity in Niger for DOD? Who were the four U.S. soldiers killed in Niger on October 4? What do we know about the alleged perpetrators of the October 4 attack? It also identifies potential issues for Congress as Members look ahead to ongoing and future authorization, appropriations, and oversight activities. A chronology of terrorist attacks in the Sahel and related developments is provided in an Appendix. Additional details surrounding the October 4 ambush and its aftermath may continue to emerge as information becomes available. The following CRS products provide additional analysis of issues discussed in this report: CRS In Focus IF10172, Al Qaeda in the Islamic Maghreb (AQIM) and Related Groups, by Alexis Arieff; CRS Report R44563, Terrorism and Violent Extremism in Africa, by Lauren Ploch Blanchard and Alexis Arieff; CRS Report R42699, The War Powers Resolution: Concepts and Practice, by Matthew C. Weed; CRS Report R43983, 2001 Authorization for Use of Military Force: Issues Concerning Its Continued Application, by Matthew C. Weed; CRS Report R44313, What Is “Building Partner Capacity?” Issues for Congress, coordinated by Kathleen J. McInnis; CRS Report R44602, DOD Security Cooperation: An Overview of Authorities and Issues, by Bolko J. Skorupski and Nina M. Serafino; CRS Report RS21048, U.S. Special Operations Forces (SOF): Background and Issues for Congress, by Andrew Feickert.

Oct 27, 2017

Child and Dependent Care Tax Benefits: How They Work and Who Receives Them

Two tax provisions subsidize the child and dependent care expenses of working parents: the child and dependent care tax credit (CDCTC) and the exclusion for employer-sponsored child and dependent care. The child and dependent care tax credit is a nonrefundable tax credit that reduces a taxpayer’s federal income tax liability based on child and dependent care expenses incurred. The policy objective is to assist taxpayers who work or who are looking for work. A taxpayer must meet a variety of eligibility criteria including incurring qualifying child and dependent care expenses for a qualifying individual and have earned income. These three terms are defined below: Qualifying expenses: Qualifying expenses for the credit are generally defined as expenses incurred for the care of a qualifying individual so that a taxpayer (and their spouse, if filing jointly) can work or look for work. (Married taxpayers who do not file a joint return are ineligible for the credit). Qualifying individual: A qualifying individual for the CDCTC is either (1) the taxpayer’s dependent child under 13 years of age or (2) the taxpayer’s spouse or dependent who is incapable of caring for himself or herself. Earned income: A taxpayer must have earned income to claim the credit. For married couples, both spouses must have earnings unless one is a student or incapable of self-care. The CDCTC is calculated by multiplying the amount of qualifying expenses—a maximum of $3,000 if the taxpayer has one qualifying individual, and up to $6,000 if the taxpayer has two or more qualifying individuals—by the appropriate credit rate. The credit rate depends on the taxpayer’s adjusted gross income (AGI), with a maximum credit rate of 35% declining, as AGI increases, to 20% for taxpayers with AGI above $43,000. Even though the credit formula—due to the higher credit rate—is more generous toward lower-income taxpayers, many lower-income taxpayers receive little or no credit since the credit is nonrefundable. In addition to the CDCTC, taxpayers can exclude from their income up to $5,000 of employer-sponsored child and dependent care benefits, often as a flexible spending account (FSA). Eligibility rules and definitions of the exclusion are virtually identical to those of the credit. However, this is one major difference—the $5,000 limit applies irrespective of the number of qualifying individuals. Taxpayers can claim both the exclusion and the tax credit but not for the same out of pocket child and dependent care expenses. In addition, for every dollar of employer-sponsored child and dependent care excluded from income, the taxpayer must reduce the maximum amount of qualifying expenses claimed for the CDCTC. The aggregate data for the CDCTC indicate several key aspects of this tax benefit. First, middle- and upper-middle-income taxpayers claim the majority of tax credit dollars. Second, at most income levels the average credit amount is between $500 and $600. Lower-income taxpayers receive less than the average amount. Third, the credit is used almost exclusively for the care of children under 13 years old (as opposed to older dependents). On average 13% of taxpayers with children claim the credit. This participation rate is significantly lower for lower-income taxpayers. Data from the Bureau of Labor Statistics indicate that about 40% of employees have access to a child and dependent care flexible spending account, while 11% have access to other types of employer-sponsored childcare. Overall, these data indicate that these benefits are more widely available to higher-compensated employees at larger establishments.

Oct 26, 2017

Reconsidering the Clean Power Plan

On October 10, 2017, the U.S. Environmental Protection Agency (EPA) proposed to repeal the Clean Power Plan (CPP), an Obama Administration rule that would limit carbon dioxide (CO2) emissions from existing fossil-fuel-fired power plants. Because power plant CO2 emissions account for about 30% of total U.S. anthropogenic emissions of greenhouse gases (GHGs), the CPP has been seen as the most important U.S. regulation addressing climate change. The CPP has not gone into effect: In February 2016, the U.S. Supreme Court stayed its implementation pending the completion of judicial review. Even had it not been stayed, the rule’s limits on CO2 emissions were not scheduled to begin taking effect until 2022. The Court’s action delayed various planning requirements that would have determined how states intended to structure compliance with the rule’s overall objectives. Unlike the suspension of the CPP that is currently in place due to the Supreme Court’s stay, repealing a promulgated rule requires that the promulgating agency go through the same steps as the original rulemaking, a process governed in this case by Section 307(d) of the Clean Air Act. The first step in the repeal process is a 60-day comment period following publication of the proposed repeal in the Federal Register. Ultimately, EPA will need to address all significant comments and criticisms that it receives during the public comment period when it promulgates a final decision on the proposed repeal. The agency’s decision could then be subject to judicial review. Although the agency is proposing to repeal the CPP, it did not propose repeal of the GHG “endangerment finding,” the 2009 agency finding that emissions of CO2 and other GHGs endanger public health and welfare. Without addressing the finding, the agency appears to have a continuing obligation to limit emissions of CO2 from power plants. Thus, in addition to the proposed repeal of the CPP, EPA has prepared and sent for interagency review an Advance Notice of Proposed Rulemaking (ANPRM) to solicit information on systems of emission reduction that it might require in a future rule to replace the CPP. The net effect of EPA’s repeal and the ANPRM may be a continuing period of regulatory uncertainty for the states and industry. In the meantime, the electric power industry is changing rapidly as a result of several factors, including market forces, state and federal regulations, technological innovation, and federal tax incentives. Many coal-fired power plants are being retired, and the new electric generation replacing those plants is overwhelmingly powered by natural gas or renewable power. Because coal-fired plants emit far more CO2 per unit of power than their replacements, total emissions of CO2 from electric power generation declined almost 25% between 2005 and 2016, while gross domestic product grew and the amount of power generated remained essentially unchanged. This observed decline in annual CO2 emissions from the electric power sector is 77% of the reductions that EPA projected would occur as a result of the CPP. Members of Congress may have an interest—for legislative and oversight purposes, as potential commenters, and in responding to constituents—in understanding what it is that EPA has proposed to do with regard to the CPP. This report provides background on the CPP and its proposed repeal, describes the administrative steps that are required to repeal or amend a rule, and discusses how the CPP and its proposed repeal fit into the context of recent and projected power sector evolution.

Oct 25, 2017