CRS Reports

The United States Withdraws from the TPP

On January 23, President Trump directed the United States Trade Representative (USTR) to withdraw the United States as a signatory to the Trans-Pacific Partnership (TPP) agreement; the acting USTR gave notification to that effect on January 30. The TPP is a proposed free trade agreement (FTA), signed by the United States and 11 Asia-Pacific countries on February 4, 2016. The agreement requires ratification by the member countries before it can become effective. Implementing legislation, the vehicle for U.S. ratification, was not submitted by the President or considered by Congress, in part due to the contentious debate over the agreement. TPP supporters argue that the withdrawal could damage U.S. negotiating credibility, undermine U.S. economic leadership in the region, hurt U.S. firms’ competitiveness abroad, and give China greater leverage to set regional trade rules. TPP opponents see the withdrawal as preventing greater U.S. import competition and potential job losses. Beyond the trade realm, some analysts also argue the withdrawal may signal declining U.S. engagement in the region and inability to assert leadership at a time when China’s rise and North Korea’s growing nuclear and missile capabilities are testing the U.S.-led rules system and challenging U.S. influence. Because the TPP had not taken effect, U.S. withdrawal does not immediately affect U.S. tariffs or other trade commitments. The United States also has existing FTAs with six of the TPP countries (Australia, Canada, Chile, Mexico, Peru, and Singapore), which this announcement does not affect. However, the withdrawal represents a shift in U.S. trade policy, with implications for U.S. trade relations with the Asia-Pacific region and beyond. In particular, it is the Administration’s first step in its stated movement from multi-party to bilateral FTA negotiations. What happens to the TPP now? As currently written, the TPP cannot take effect without U.S. participation. The TPP requires ratification by at least 6 countries representing 85% of the original 12 members’ collective GDP, requiring both U.S. and Japanese participation to become effective. Given the size of the U.S. market relative to the other TPP countries (U.S. GDP accounts for about 65% of the group’s total), the U.S. withdrawal reduces the economic value of the pact for the other members, especially countries without an existing U.S. FTA, such as Japan. Nonetheless, the remaining TPP countries could move forward with a similar agreement. TPP ratification bills have already passed the Japanese and New Zealand legislatures, and some of the TPP participants, including Australia, would like to move forward with or without U.S. involvement. Chile plans to host a meeting in mid-March to discuss the future of the agreement, and has invited the 12 original signatories, including the United States, as well as China, Colombia, and South Korea. The White House has stated that it may instead explore bilateral deals with the various TPP countries. Japan represents the largest market among the TPP countries without an existing U.S. FTA. At their recent summit, Prime Minister Abe and President Trump announced a new bilateral commercial dialogue, which some argue could be the first step toward FTA negotiations. The U.S.-Japan negotiations were a critical aspect of the TPP, which included provisions on autos, insurance, and other issues applicable only to the two countries. Economically, Malaysia and Vietnam also represent significant candidates for bilateral negotiations given their quickly growing economies and existing trade barriers (e.g., relatively higher average tariffs). How could other regional negotiations impact the United States? The TPP was, in part, a U.S. response to recent growth in regional trade agreement negotiations, many of which do not include the United States and could put U.S. firms at a disadvantage in export markets. The Regional Comprehensive Economic Partnership (RCEP), a trade negotiation among the 10 Association of Southeast Asian Nations, as well as Australia, China, India, Japan, New Zealand, and South Korea, has garnered significant attention, largely because it includes China and several major U.S. trading partners, but not the United States. Should RCEP move forward in its current form, the United States would face higher tariffs in RCEP markets (excluding existing U.S. FTA partners) vis-à-vis other RCEP countries. This tariff disadvantage could spur other nations to seek RCEP membership, and could give RCEP members outsized influence in establishing the region’s trade rules and disciplines. The extent to which those rules align with U.S. interests in the region remains an open question as RCEP negotiations are ongoing, but most analysts expect RCEP to be less comprehensive in its tariff coverage than the TPP and unlikely to include commitments as strong on issues from intellectual property rights to labor and environmental protections. Figure 1. U.S. Trade with RCEP and TPP Countries (2015, billions of dollars) / Source: CRS with data from U.S. Census Bureau. Note: Shapes scaled to reflect the total amount of U.S. trade with each country. What are the implications of the shift to bilateral negotiations? Whether or not bilateral or regional trade deals result in a better outcome for the United States is subject to debate, and likely depends on a number of factors, including the countries involved, the level of trade restrictions, and their existing trade and economic relationship with the United States. The Trump Administration argues that the bilateral approach allows the United States to use its economic leverage and focus on U.S. priorities. Meanwhile, former USTR Michael Froman suggests that multi-party negotiations can provide more options for mutually beneficial tradeoffs and can allow countries to make politically challenging concessions that might not be possible in one-on-one negotiations with the United States. Others contend multi-party agreements are more efficient, helping to avoid more overlapping rules in the increasingly complex web of existing agreements. The United States has negotiated and implemented agreements of both types—of the 14 existing U.S. FTAs, 12 are bilateral, and 2 (NAFTA and DR-CAFTA) are multi-party. What will future U.S. trade negotiations look like? The Trump Administration has said it plans to reexamine existing U.S. FTAs and take a new approach to future negotiations. Congress, however, has set U.S. negotiating objectives under Trade Promotion Authority (TPA). Under TPA, U.S. trade agreements must make progress toward achieving these objectives for their implementing legislation to receive expedited legislative consideration. Based on these objectives, the United States has been negotiating broad-based FTAs since the 1980s to reciprocally reduce and eliminate tariff and nontariff barriers in goods, services, and agriculture and to establish trade rules and disciplines. These commitments expand on WTO obligations and address new issues. For example, the TPP included new provisions on digital trade and state-owned enterprises, viewed by many as critical components of the agreement. Going forward, the Trump Administration’s FTA negotiations may be the primary vehicle through which the United States can address these emerging aspects of trade policy.

Feb 13, 2017

United Nations Issues: U.S. Funding of U.N. Peacekeeping

Feb 9, 2017

Withdrawal from International Agreements: Legal Framework, the Paris Agreement, and the Iran Nuclear Agreement

The legal procedure through which the United States withdraws from treaties and other international agreements has been the subject of long-standing debate between the legislative and executive branches. Recently, questions concerning the role of Congress in the withdrawal process have arisen in response to statements made by President Donald J. Trump that he may consider withdrawing the United States from certain high-profile international commitments. This report outlines the legal framework for withdrawal from international agreements under domestic and international law, and it examines legal issues related to the potential termination of two agreements that may be of significance to the 115th Congress: the Paris Agreement on climate change and the Joint Comprehensive Plan of Action (JCPOA) related to Iran’s nuclear program. Although the Constitution sets forth a definite procedure whereby the Executive has the power to make treaties with the advice and consent of the Senate, it is silent as to how treaties may be terminated. Moreover, not all agreements between the United States and foreign states are made through Senate-approved, ratified treaties. The President also enters into executive agreements, which do not receive the Senate’s advice and consent, and “political commitments,” which are not binding under domestic or international law. The legal procedure for withdrawal often depends on the type of agreement at issue, and the process may be further complicated when Congress has enacted legislation implementing the agreement into domestic law. Historical practice suggests that, because the Obama Administration considered the Paris Agreement to be an executive agreement that did not require the Senate’s advice and consent, a future Executive may unilaterally withdraw from it without seeking approval from the legislative branch. By its terms, however, the Paris Agreement does not allow parties to submit a notice of withdrawal until November 2019. Should a future Executive seek a more expedient method of exit, withdrawal from the 1992 United Nations Framework Convention on Climate Change (UNFCCC)—the parent treaty to the Paris Agreement—would also terminate the United States’ participation in the subsidiary Paris Agreement. Because the UNFCCC received the Senate’s advice and consent in 1992, an effort by the Executive to terminate that treaty unilaterally could invoke the historical and largely unresolved debate over the role of Congress in treaty termination. The Obama Administration treated the JCPOA as a political commitment that is not legally binding. To the extent this understanding is correct, there is no legal prohibition on the President from withdrawing from the plan of action. It is worth noting that the JCPOA was “endorsed” by U.N. Security Council Resolution 2231, and there is disagreement among observers as to whether this resolution may have converted at least some of the voluntary commitments in the JCPOA into obligations that are binding under international law. Both the JCPOA and Resolution 2231 contain what has been called a “snapback” mechanism that may allow the United States to cause the Security Council to reinstate its prior sanctions that had been imposed on Iran.

Feb 9, 2017

State Innovation Waivers: Frequently Asked Questions

Section 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) provides states with the option to waive specified requirements of the ACA. In the absence of these requirements, the state is to implement its own plan to provide health insurance coverage to state residents that meets the ACA’s terms. Under a state innovation waiver, a state can apply to waive ACA requirements related to qualified health plans, health insurance exchanges, premium tax credits, cost-sharing subsidies, the individual mandate, and the employer mandate. The state can apply to waive any or all of these requirements, in part or in their entirety. To obtain approval for a waiver application, a state must show that the plan it will implement in the absence of the waived provision(s) meets certain requirements. The state’s plan must ensure that as many state residents have health insurance coverage under the plan as would have had coverage absent the waiver, and the coverage must be as affordable and comprehensive as it would have been absent the waiver. Additionally, the state’s plan cannot increase the federal deficit. The Secretary of the Department of Health and Human Services (HHS) and the Secretary of the Treasury share responsibility for reviewing state innovation waiver applications and deciding whether to approve applications. The earliest a state innovation waiver could go into effect was January 1, 2017. As of the date of this report, Hawaii is the only state with an approved state innovation waiver. Three other states—Alaska, California, and Vermont—have submitted waiver applications. California has since withdrawn its application, and the Secretaries have not yet issued a decision on Alaska’s or Vermont’s application.

Feb 8, 2017

Farm Bill Programs Without a Budget Baseline Beyond FY2018

The 2014 farm bill (the Agricultural Act of 2014, P.L. 113-79) provided mandatory funding for many programs. Some of these programs have a budget baseline beyond the end of the farm bill in FY2018, while others do not. The Congressional Budget Office (CBO) baseline is a projection at a particular point in time of what future federal spending on mandatory programs would be under current law. This baseline is the benchmark against which proposed changes in law are measured. This report identifies mandatory programs in the 2014 farm bill that lack a budget baseline and explains the significance of this for enacting a successor to the current farm bill. Generally, a program with estimated mandatory spending in the last year of its authorization will be assumed to continue in the baseline as if there were no change in policy and it did not expire. However, some programs may not be assumed to continue in the budget baseline, because the program had estimated mandatory spending less than a minimum $50 million scoring threshold in the last year of the farm bill, or the Budget Committees and/or Agriculture Committees determined that mandatory spending shall not extend beyond expiration. Having a baseline essentially gives programs built-in future funding if policymakers decide that the programs should continue. Programs without a continuing baseline beyond the end of farm bill do not have assured future funding. As such, any extended authorization of these latter programs would be scored as new mandatory spending. The 2014 farm bill contains 37 programs that received mandatory funding that do not have baseline beyond FY2018. These programs had estimated mandatory spending totaling $2.607 billion over the five-year farm bill. While this total may be a relatively small fraction of total farm bill spending (0.5% of the $489 billion five-year total projection), the effect may be particularly important to specific farm bill titles and to the programs’ beneficiaries. Notable programs among this group include certain conservation programs; most of the bioenergy, rural development, and research title programs; various nutrition title pilot programs and studies; organic agriculture and farmers’ market promotion programs; and outreach to socially disadvantaged and military veteran farmers. If policymakers want to continue these programs in the next farm bill, they may need to find budgetary offsets to pay for the costs.

Feb 7, 2017

USDA Releases GIPSA Rules

On December 20, 2016, the U.S. Department of Agriculture’s (USDA’s) Grain Inspection, Packers and Stockyards Administration (GIPSA) released the Farmer Fair Practices Rules consisting of an interim final rule and two proposed rules that address marketing and competition issues for livestock and poultry markets. GIPSA initially proposed these rules in 2010 to implement 2008 farm bill (P.L. 110-246) provisions, and they are commonly referred to as the “GIPSA rule.” The GIPSA rule was intended to ensure fair competition in livestock and poultry markets by clarifying what constituted a violation of the Packers and Stockyards Act (P&S Act; 7 U.S.C. §181 et seq.). However, starting in FY2012, Congress blocked implementation of some provisions in the original proposed rule through the appropriations process. When Congress dropped such a provision in the FY2016 appropriations act (P.L. 114-113), USDA began the process of reissuing parts of the original rule. Section 202 of the P&S Act describes unlawful acts that would cause packers, swine contractors, and live poultry dealers to be in violation of the act. The recently released rules address the scope of Sections 202(a) and 202(b) of the act and provide criteria that may be considered to determine if P&S Act violations have occurred. Sections 202(a) and (b) Section 202(a) states it is unlawful to “[e]ngage in or use any unfair, unjustly discriminatory, or deceptive practice or device.” Section 202(b) says it is unlawful to “[m]ake or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect.” The interim final rule, Scope of Sections 202(a) and (b) of the Packers and Stockyards Act, (81 Federal Register 92566) amends GIPSA regulations (9 C.F.R. 201) governing the applicability of 202(a) and (b) to include conduct or actions that may harm an individual. In short, a violation would not require a finding of harm or likely harm to competition (i.e., conduct or action that hurts the marketplace). Past P&S Act court cases have found that an individual may have been harmed by the conduct or action of packers, contractors, or live poultry dealers, but competition was not harmed and thus there was no P&S Act violation. USDA has argued in the past that conduct or actions may harm individuals and that Sections 202(a) and (b) should apply to individuals. USDA points out in the interim final rule that unlike Section 202(c), (d), and (e), which refer to “restraining commerce,” the term commerce is not used in (a) and (b). USDA also believes that the criteria being proposed in the two proposed rules will provide clarity that would enable courts to find for individuals in P&S Act cases. The first proposed rule, Unfair Practices and Undue Preferences in Violation of the Packers and Stockyards Act (81 Federal Register 92703), includes examples (not all-inclusive) of conduct or action that could be unfair or unjustly discriminatory and criteria to determine what constitutes undue or unreasonable preference. Examples of unfair conduct or action include retaliatory actions, failing to comply with record requirements, and failing to provide reasonable notice to poultry growers before suspending the delivery of birds. Criteria that may be considered include treating producers/growers unfavorably when they have engaged in lawful communication or assert their rights, treating producers/growers unfavorably for arbitrary reasons unrelated to the livestock or poultry operations, and whether or not the conduct or action harms or is likely to harm competition. The second proposed rule, Poultry Grower Ranking System (81 Federal Register 92723), provides guidance that could be used to determine a violation when the tournament ranking system is used in settling poultry contracts. Tournament System Poultry processors use the tournament system to rank the quality of grower flocks. At the end of a growing period, each grower’s flock of birds is ranked against a pool (settlement group) of other growers’ flocks. Depending on growing performance, a discount or a premium may be applied to the base contract pay for each grower. The proposed rule provides four examples of criteria that could be used to determine if conduct or actions are unfair or unjustly discriminatory or whether they provide undue or unreasonable preference to one producer over another: (1) whether poultry companies provide growers sufficient information to make sound business decisions; (2) whether poultry companies provide comparable quality and quantity of inputs (e.g., birds, feed, medication) to growers in the same settlement group; (3) whether companies consider production variables (e.g., bird placement density, age, and target weights) among growers in a settlement group; and (4) that poultry companies must be able to demonstrate a legitimate business reason for varying from the three criteria described above. The recently released rules remain controversial among livestock and poultry producers, industry associations, and advocacy groups. For opponents of the GIPSA rule, the interim final rule is especially of concern because of the belief that it could lead to increased litigation. Proponents continue to support USDA efforts to implement rules that could provide additional protections to contract growers. On January 20, 2017, the Trump Administration issued a memorandum requesting agencies to delay until 60 days after the date of the memorandum any regulations that had not taken effect but were due to go into effect during that period. On February 6, 2017, USDA announced a delay in the effective date of the interim final rule by 60 days to April 22 (originally February 21), and the comment periods for the interim final rule and the proposed rules are extended 30 days until March 24 (originally February 21). This action provides the Trump Administration more time to review these rules and decide whether to proceed with the rulemaking begun under the Obama Administration. The new Administration could still withdraw the interim final rule, likely through the notice and comment process, and decide to not finalize the two proposed rules if it chooses.

Feb 7, 2017

What is the Proposed U.S.-EU Insurance Covered Agreement?

On January 13, 2017, the United States and European Union (EU) concluded negotiations on the first insurance covered agreement. A covered agreement is a relatively new form of international agreement, established along with the Federal Insurance Office (FIO) in Title V of the Dodd-Frank Act (P.L. 111-203). The statute defines a covered agreement as a type of international insurance or reinsurance agreement for recognition of prudential measures that FIO and the United States Trade Representative (USTR) negotiate on a bilateral or multilateral basis. After such an agreement, FIO has relatively narrow authority to preempt state laws that are inconsistent with the agreement and result in less favorable treatment for foreign insurers. Such preemption, however, may not apply to any state insurance measure that “governs any insurer's rates, premiums, underwriting, or sales practices.” Although FIO and USTR must consult with Congress on the negotiations, the statute does not require specific authorization or approval from Congress for a covered agreement. The covered agreement was submitted to the House Committees on Financial Services and Ways and Means and the Senate Committees on Banking, Housing, and Urban Affairs and Finance on January 13, 2017. The committees will now review the agreement over a 90-day layover period mandated in statute, while the EU goes through its own internal process to formally obtain consent from the EU Member States in the European Council and European Parliament to conclude the agreement. A covered agreement can be seen as sharing some aspects of financial regulatory cooperation agreements, such as those entered into by U.S. banking regulators in the Basel Committee on Banking Supervision. Financial regulatory cooperation agreements have been undertaken without direct congressional direction under existing regulatory authorities and are implemented through the regulatory rulemaking process, as are other financial regulations. Such federal financial regulations may, in some cases, preempt state laws and regulations. In contrast, free trade agreements (FTAs) are negotiated under congressionally passed Trade Promotion Authority (TPA), which establishes negotiating objectives, notification, and consultation requirements. If these conditions are met, implementing legislation authorizing changes in U.S. law necessary to meet the new obligations can be considered by Congress under expedited procedures. U.S. FTAs include market access commitments and rules and disciplines governing financial services measures, such as non-discrimination and transparency obligations. Although FTAs customarily establish a Financial Services Committee comprised of each party’s regulators to oversee implementation of the agreement and provide a forum for communication, U.S. FTAs to date exclude regulatory cooperation commitments for the financial services sector. In U.S.-EU negotiations for the Transatlantic Trade and Investment Partnership (T-TIP) under the Obama Administration, the EU sought to include regulatory cooperation issues in the agreement that could have included some of the same matters as the covered agreement. Some Members of Congress supported this position, whereas U.S. regulators opposed the inclusion. The United States and EU did agree to establish the Joint U.S.-EU Financial Regulatory Forum, but T-TIP negotiations are on pause until the Trump Administration decides how it wants to proceed. The Administration notified Congress regarding plans to begin negotiations with the EU on a covered agreement in November 2015 with expressed goals to achieve recognition of the U.S. regulatory system by the EU, particularly through an “equivalency” determination under the EU’s Solvency II that would allow U.S. insurers and reinsurers to operate throughout the EU without increased regulatory burdens, and to obtain uniform treatment of EU-based reinsurers operating in the United States, particularly with respect to collateral requirements. The issue of equivalency for U.S. regulation is a relatively new one as Solvency II has only come into effect at the beginning of 2016, whereas the question of reinsurance collateral has been a concern of the EU for many years. The covered agreement negotiations also sought to facilitate the exchange of confidential information among supervisors across borders. According to the USTR and Treasury, the new bilateral agreement allows U.S. and EU insurers to rely on their home country regulators for worldwide prudential insurance group supervision when operating in either market; eliminates collateral and local presence requirements for reinsurers meeting certain solvency and market conduct conditions; and encourages information sharing between insurance supervisors. The proposal sets timelines for each side to make the necessary changes and allows either side to not apply the agreement if the other side falls short on full implementation. Unlike the goals expressed to Congress when negotiations began, the agreement does not explicitly call for equivalency recognition of the U.S. insurance regulatory system by the EU. However, the agreement’s provisions on group supervision would seem to meet the same goal of reducing the regulatory burden on U.S. insurers operating inside the EU. The proposal goes beyond a previous state-level proposal on reinsurance collateral requirements put forth by the National Association of Insurance Commissioners (NAIC) and adopted by many states, and allows for the possibility of federal preemption if states are not in compliance. Several U.S. industry groups welcomed the agreement, including the American Insurance Association (AIA), the Reinsurance Association of America, and the American Council of Life Insurers (ACLI). The AIA’s President particularly praised it for allowing U.S. insurers to compete in the EU “without the costly and duplicative regulations being imposed on them under Solvency II.” State regulators and state lawmakers, respectively represented by the NAIC and National Council of Insurance Legislators (NCOIL), expressed concern with the agreement due the limited state involvement in the negotiation process and the potential federal preemption of state laws and regulations. Some insurers also question the utility of the agreement, with the President of the National Association of Mutual Insurers (NAMIC) seeing ambiguity that “will result in confusion and potentially endless negotiations with Europe on insurance regulation.”

Feb 7, 2017

Asian Infrastructure Investment Bank (AIIB)

In October 2013, at the Asia-Pacific Economic Cooperation Summit in Bali, Indonesia, China proposed creating a new multilateral development bank (MDB), the Asian Infrastructure Investment Bank (AIIB). As its name suggests, the Bank's stated purpose is to provide financing for infrastructure needs throughout Asia, as well as in neighboring regions. As of January 2017, the AIIB has approved nine projects, investing a total of $1.7 billion. The AIIB was formally established in late 2015 with 57 founding members. Membership in the AIIB is open to all members of the World Bank or the Asian Development Bank (ADB). The AIIB’s Articles of Agreement create two classes of membership: regional and non-regional members. According to the AIIB articles, regional members hold 75% of the total voting power in the Bank. Fourteen of the G-20 nations are AIIB members. The United States is not an AIIB member. The AIIB was initially conceived as a regional financing mechanism for Chinese President Xi Jinping’s “One Belt, One Road (OBOR)” initiative. This initiative is a central component of President Xi’s regional economic and foreign policy and aims to boost economic connectivity from China to Central and South Asia, the Middle East, and Europe (the Silk Road Economic Belt) and, along a maritime route, from Southeast Asia to the Middle East, Africa, and Europe (the 21st Century Maritime Silk Road). President Xi, more so than previous Chinese leaders, has pursued policies to establish new China-led trade and financial institutions, as well as to further integrate China within the existing international financial institutions. President Xi said that the AIIB would “promote interconnectivity and economic integration in the region” and “cooperate with existing multilateral development banks,” including the World Bank and the ADB. As AIIB membership has expanded to include developed countries in Asia and Europe (and possibly Canada), China has since tried to distance the AIIB from the OBOR initiative through co-financing arrangements for its initial loans. It is uncertain how China will balance its stated goal of establishing an independent and high-standard MDB, while pursuing China’s own economic and national security priorities. The AIIB's initial total capital is $100 billion, with 20% paid-in and 80% callable. China is contributing $50 billion, half of the initial subscribed capital. India is the second-largest shareholder, contributing $8.4 billion. The Bank is based in Beijing, China, and headed by Jin Liqun, a former Chinese vice minister of finance, Chinese sovereign wealth fund chairman, and ADB vice president. China's voting share at the AIIB (28.7%) is substantially larger than that of the second-largest AIIB member nation, India (8.3%). This is the largest gap between the first- and second-largest shareholders at any existing MDB. The AIIB has a governance structure similar to other MDBs, with two key differences: (1) it does not have a resident board of executive directors that represents member countries' interests on a day-to-day basis; and (2) the AIIB gives more decisionmaking authority to regional countries and the largest shareholder, China. The AIIB presents several policy issues for Members of Congress to consider, including the future direction of the AIIB and potential U.S. role, including the question of whether the United States should join and U.S. policy toward the new institution; independence, transparency, and governance of the bank and implications for other MDBs, particularly projects that are co-financed with other MDBs; and commercial implications for U.S. firms, including procurement opportunities.

Feb 3, 2017

Why Did March 2016 U.N. Sanctions Not Curb China’s Imports of Coal from North Korea?

On March 2, 2016, the United Nations Security Council adopted Resolution 2270 (UNSCR 2270), imposing new sanctions on North Korea (also known as the Democratic People’s Republic of Korea, or DPRK) in response to the country’s fourth nuclear test. One target of the resolution was North Korea’s income from coal. North Korea’s annual earnings from coal exports were estimated to be “approximately a billion dollars,” according to the U.S. Ambassador to the United Nations at the time, Samantha Power. She said UNSCR 2270’s limits on coal and other North Korean exports would make it “tougher for the [North Korean] government to get the money it needs to keep funding its illicit weapons program.” According to import statistics available through Global Trade Atlas, between 2010 and 2015, China was the destination for between 97% and 98% of North Korea’s coal exports. These shipments of coal to China accounted for an average of approximately one-third of North Korea’s total export revenues per year. China’s implementation of the coal provisions of UNSCR 2270 was therefore critical. The latest trade data indicate, however, that in the months after passage of the resolution, China’s imports of coal from North Korea grew in both volume and value. (See Table 1.) The data show that for the eight months from April 2016, when China issued a detailed implementation notice for the sanctions in UNSCR 2270, to the end of November 2016, China’s imports of coal products from North Korea—captured in the Harmonized System (HS) commodities classification code 2701—rose 6.5% in volume and nearly 5% by value, compared to the same period a year earlier. Table 1. Chinese Imports of North Korean Coal April-November Comparisons, 2014-2016 Unit April-Nov. 2014 April-Nov. 2015 April-Nov 2016 % Change 2016/2015 Metric Tons 10.4 mil. 14.1 mil. 15.0 mil. 6.5% U.S. Dollars $759 mil. $726 mil. $761 mil. 4.8% Source: Chinese Customs. Downloaded from Global Trade Atlas, January 4, 2017. Note: Coal is listed in the Harmonized System as code 2701. Why did UNSCR 2270 not curb China’s imports of coal from North Korea? One reason is language in UNSCR 2270 negotiated by China. The resolution allows exceptions to the ban on imports of coal from North Korea in two circumstances. The first is when transactions are “exclusively for livelihood purposes and unrelated to generating revenue for the DPRK’s nuclear or ballistic missile programs” or other activities prohibited by previous U.N. resolutions on North Korea. The second circumstance is when a third country’s coal is being transshipped through the North Korean Port of Rajin (also known as Rason), an exception intended to allow continued Russian coal exports to China via the North Korean port. In an April 5, 2016, notice providing implementing details for UNSCR 2270, Announcement No. 11, China’s Ministry of Commerce and General Administration of Customs appeared to encourage Chinese businesses to make use of the two exceptions. The notice instructed businesses to submit a simple “letter of commitment” to their local customs authority certifying that their trade was either “for the people’s livelihood,” with the term left undefined, or involved transshipped coal. Asked at a November 2016 press conference about China’s continued coal imports from North Korea, a Chinese Foreign Ministry spokesperson defended them as “legal,” citing the “livelihood” exception. The broader reason why UNSCR 2270 did not curb China’s imports of coal may lie with China’s skepticism about the effectiveness of economic pressure in persuading North Korea to denuclearize. Chinese officials have stated that China is sincere in its opposition to North Korea’s nuclear weapons program. They argue, however, that the best hope for resolving the challenge of North Korea’s nuclear weapons program is through dialogue and negotiations, specifically dual track negotiations on denuclearization and on replacement of the Korean armistice with a peace treaty. Other possible motivations for China’s behavior include a desire to preserve economic opportunities for its businesses in North Korea and to ensure that economic pressure on North Korea is not so great as to cause the regime to act in even more provocative ways, or to collapse. Following North Korea’s fifth nuclear test, in September 2016, the United States, South Korea, and other countries successfully pushed for a new, more stringent UNSCR. Passed on November 30, 2016, UNSCR 2321 limits North Korea’s annual coal exports under the “livelihood” exception to a volume of 7.5 million metric tons or a value of $400.1 million, whichever is lower. As the tables below show, from 2011 to 2016, North Korea’s annual exports of HS Code 2701 coal products exceeded UNSCR 2321’s value cap by well over $500 million. (See Figure 1.) Demonstrating the impact the export cap could have on North Korea’s export earnings, the $649-million gap between North Korea’s coal exports in 2015 and the UNSCR 2321 export cap represents over 20% of North Korea’s total export revenue from all goods in 2015, according to GTA data. After passage of UNSCR 2321, China issued Announcement No. 81, with new instructions for Chinese businesses related to sanctions implementation. It explained the cap on North Korean coal exports and ordered that Chinese businesses halt all coal imports from North Korea as soon as the U.N. issues a notice that 95% of the annual quota has been filled. UNSCR 2321 requires Member States, including China, to report to the U.N. monthly on the volume of coal they procured from North Korea in the previous month, and directs a U.N. Committee to make the reported volumes available in “real-time” on a public website. China’s Announcement No. 81 urged Chinese businesses to monitor the U.N. website to track the status of imports relative to the cap in order “to avoid unnecessary losses.” The public, too, can monitor the website, and by extension, China’s observance of the cap on coal imports in UNSCR 2321. Figure 1. North Korea’s Estimated Coal Exports to China, 2011-2016 vs. UNSC Res. 2321’s Caps on North Korea’s Total Coal Exports (Nov. 2016) / Source: Chinese Customs, Downloaded via Global Trade Atlas, February 2, 2017. Note: Coal is listed in the Harmonized System as code 2701.

Feb 3, 2017

Temporary Assistance for Needy Families (TANF): The Work Participation Standard and Engagement in Welfare-to-Work Activities

The 1996 welfare reform law (P.L. 104-193) created the Temporary Assistance for Needy Families (TANF) block grant. TANF’s predecessor program, Aid to Families with Dependent Children (AFDC), historically assisted non-working single mothers. The debates leading to the 1996 law focused on how to move those single mothers from welfare to work. TANF provides states with flexibility in how they design their programs. It has national goals, one of which is ending dependence of needy parents on government benefits by, in part, promoting job preparation and work. To enforce that goal, TANF requires that 50% of each state’s TANF families with an adult recipient include a member who is either working or engaged in welfare-to-work activities. There are credits that states may receive that lower the 50% goal for states that have reduced caseloads or spend from their own funds more than the amount required under TANF. Thus, there are four different routes for states to meet the work participation standard: (1) caseload reduction (i.e., reducing the number of families receiving TANF assistance); (2) excess state spending; (3) providing assistance to those already working (“unsubsidized employment”); and (4) engaging otherwise non-employed recipients in welfare-to-work activities, such as job search, education and training, community service, work experience, and subsidized employment. The main performance measure for TANF is the work participation rate (WPR), which measures the share of families in the caseload with a member who is either working or engaged in welfare-to-work activities. The WPR is compared annually to the state’s after-credit numerical goal to determine whether it met the work participation standard. The national average WPR fluctuated around 30% from FY2002 through FY2011. Most states met the work participation standard through a combination of caseload reduction, excess spending credits, and a WPR below 50%. Over that period, about half of the national WPR was comprised of recipients in unsubsidized jobs. In recent years, the national TANF average WPR has increased; it approached 50% for the first time in FY2015. This increase is due to states using TANF dollars to implement “earnings supplement” programs, separate from the regular TANF cash assistance programs. Earnings supplement programs provide benefits, usually small ones ($10 to $50 per month), to families with working parents who are not in regular state TANF assistance programs. Some earnings supplement programs provide benefits to those who left regular state TANF cash assistance programs; others provide benefits to families without any necessary connection to regular TANF cash assistance. Despite this, families who receive these TANF-funded benefits are counted toward the WPR. Throughout the history of TANF, participation in welfare-to-work activities has been relatively modest. In FY2015, out of a monthly average of 743,000 non-employed TANF work-eligible individuals, 143,000 (less than 1 in 5) were reported as engaged in welfare-to-work activities. TANF now has a record of 20 years, highlighted by (1) caseload reduction, with particularly large caseload declines in the early years; (2) an increase in the share of families receiving assistance with a parent who is employed; and (3) modest rates of participation in welfare-to-work activities among those who are not otherwise employed. If policymakers wish to increase engagement of non-employed recipients, a number of questions would be raised—including whether TANF’s flexibility with the performance standards structure provides sufficient incentives to increase engagement, or whether other program models, such as a separate program dedicated to work activities for assistance recipients, should be considered.

Feb 1, 2017

Mexican-U.S. Relations: Increased Tensions

On January 26, 2017, Mexican President Enrique Peña Nieto canceled an upcoming meeting with President Donald J. Trump after exchanges between the two leaders over social media concerning U.S. policies toward Mexico. In an address on January 25, President Peña Nieto vowed to protect Mexican migrants in the United States who are vulnerable to deportation and reiterated Mexico’s refusal to pay for a border wall but also stated his “willingness to reach agreements” if they are in Mexico’s interest. Mexicans have strongly supported Peña Nieto’s actions with respect to President Trump. After a phone call on January 27, Presidents Trump and Peña Nieto issued a joint statement in which they agreed to work through differences as part of a “comprehensive discussion on all aspects of the bilateral relationship.” Advances in Bilateral Cooperation Until the 1980s, Mexico had a relatively closed economy and an independent foreign policy that was often at odds with the United States. Those policies gradually shifted, however, as Mexico opened its economy to trade and investment and increased collaboration with the United States. Since President Ronald Reagan, every first-term U.S. President has met with his Mexican counterpart either prior to his inauguration or immediately thereafter. Mexican presidents have emphasized collaboration with their U.S. counterparts, most recently on support for Mexico’s domestic security and antidrug efforts. The bilateral economic relationship is important to both countries because of the high level of trade and strong economic ties that connect them. Mexico is the United States’ third-largest trading partner, and the United States is Mexico’s largest trading partner. Since the North American Free Trade Agreement (NAFTA) entered into force in 1994, North American economies have become more integrated, including through extensive production chains that support thousands of jobs in both the United States and Mexico. U.S. manufacturing industries—including automotive, electronics, appliances, and machinery—all rely on support from Mexican manufacturers. Approximately 40% of the content of imports from Mexico is made in the United States. Some 80% of Mexico’s exports are destined for the United States, making Mexico heavily dependent on the U.S. economy. Many people in the poorer regions of Mexico also rely heavily on worker remittances from the United States ($25 billion in 2015), which mostly or completely cover basic needs and may be used for capital invested in microenterprises. Mexico has become a strategic U.S. ally in regional and global affairs. For example, as apprehensions of Mexicans on the southwestern border have declined to near historic lows, apprehensions of Central Americans have surged. In response, Mexico apprehended more than 150,000 Central American migrants and record numbers of migrants from Africa and Asia in FY2015 and FY2016. To prevent terrorists from transiting its territory, Mexico has imposed strict visa policies and collects and shares fingerprints and other data on all arrivals with U.S. officials. Law enforcement cooperation has led to the arrest and extradition of hundreds of Mexican drug kingpins over the past decade, including Joaquin “El Chapo” Guzmán. Mexico’s Tough Choices President Peña Nieto’s approval rating has remained extremely low (under 25%) since 2014. Low oil prices, currency devaluation, and investors’ unease about U.S. trade policy have hurt the Mexican economy. Peña Nieto’s government has struggled to solve high-profile human rights cases, become embroiled in scandals, and faced security challenges, including the rising violence committed by organized crime groups competing to supply U.S. drug demand. Peña Nieto’s surprise decision to invite then-candidate Trump for a high-profile visit to Mexico in August 2016 proved extremely unpopular in Mexico, as it failed to influence Trump’s rhetoric or positions toward Mexico. Fallout from the visit led to the resignation of Mexico’s Finance Minister, Luis Videgaray (who had organized the visit), although Videgaray is now Minister of Foreign Affairs. Peña Nieto may have limited room to maneuver in future negotiations with the Trump Administration, as Mexican legislators and businesspeople are urging him to more vigorously defend Mexican interests. Mexico’s sovereignty, its economic dependence on the United States, and the desire to preserve advances in bilateral cooperation are influencing Peña Nieto’s decisionmaking. Economic and Political Implications of Tense Relations President Trump has stated his intention to withdraw from or renegotiate NAFTA and potentially tax imports from Mexico to pay for the border wall. Either proposal could have considerable economic consequences. Mexican Economic Minister Ildefonso Guajardo has stated that Mexico would respond “immediately” if the United States were to impose a border tax and that Mexico would consider withdrawing from NAFTA if negotiations were not favorable to the country. The United States could face unfair trade cases under the World Trade Organization or retaliatory tariffs on U.S. exports. A potential trade war could disrupt North American production chains, resulting in job losses in both countries and risking economic instability in Mexico. The Mexican public appears to be behind President Peña Nieto in his stance toward President Trump, but public opinion could turn against him if he fails to work productively with the Trump Administration. Discontent with Peña Nieto could increase voter support for Andrés Manuel López Obrador, a leftist populist who is unafraid to antagonize the United States, in Mexico’s 2018 elections. Outlook The United States benefits when Mexico is stable, prosperous, and secure. U.S. interests likely would be impacted if Mexico slipped into a recession or violence escalated, particularly along the border. Mexican-U.S. relations have generally grown closer over the past two decades. Common interests in encouraging trade flows and energy production, combating illicit flows, and managing environmental resources have been cultivated over many years. As evidenced by recent events, policy changes, or even rhetoric about potential policy changes, that run counter to Mexican national interests can have consequences for bilateral relations. Tensions in these relations could impact Mexico’s willingness to cooperate with the U.S. government on migration enforcement and illicit drug crop reduction, which traditionally have been among many U.S. policymakers’ top concerns.

Feb 1, 2017

Caregiver Support to Veterans

Feb 1, 2017

Present Trends and the Evolution of Mandatory Spending

Federal spending is divided into three broad categories: discretionary spending, mandatory spending, and net interest. Mandatory spending is composed of budget outlays controlled by laws other than appropriation acts, including federal spending on entitlement programs. Entitlement programs such as Social Security, Medicare, and Medicaid make up the bulk of mandatory spending. Other mandatory spending funds various income support programs, including Supplemental Security Income (SSI), unemployment insurance, and the Supplemental Nutrition Assistance Program (SNAP), as well as federal employee and military retirement and some veterans’ benefits. In contrast to mandatory spending, discretionary spending is provided and controlled through appropriations acts. Net interest spending is the government’s interest payments on debt held by the public, offset by interest income that the government receives. In FY2016, mandatory spending accounted for an estimated 63% of total federal spending and over 13% of gross domestic product (GDP). Social Security alone accounted for about 24% of federal spending. Medicare and the federal share of Medicaid together accounted for an estimated 27% of federal spending. Therefore, spending on Social Security, Medicare, and Medicaid now make up about half of total federal spending. In previous decades, mandatory spending accounted for a smaller share of federal outlays. In 1962, before the creation of Medicare and Medicaid, mandatory spending was less than 30% of all federal spending. At that time, Social Security accounted for about 13% of total federal spending or about half of all mandatory spending. Mandatory spending is projected to continue rising over the next decades. Over the next decade, mandatory spending is projected to reach 15% of GDP in FY2026, while discretionary spending is projected to fall to 5% of GDP, its lowest level ever. Much of the projected increase in mandatory spending stems from the demographic effects of an aging population and rising health care costs. Baby Boomers will continue to retire over the coming decade, and the proportion of retirees over age 85 has been rising steadily, thus increasing the expected flow of federal benefits. While health care costs per beneficiary have increased in recent years more slowly than previously expected, concerns remain that health care cost growth could again accelerate. Other countries with advanced economies also face challenges related to rising costs of social insurance programs, although per capita health care costs are generally lower in those countries than in the United States. Some of those countries have more extensive social safety nets. Some in the United States have called for expanding certain social insurance benefits, or for programs that would do more to address challenges faced by non-elderly families, such as expanded options for repayment of student loans or support for child care. Over the long term, projections suggest that if current policies remain unchanged, the United States could face major fiscal imbalances. According to CBO’s extended baseline projections, Social Security would grow from 4.9% of GDP in FY2016 to 5.9% of GDP by FY2026 and 6.4% by FY2036. Federal mandatory spending on health care is projected to expand from about 5.5% of GDP in FY2016 to 6.5% in FY2026 and to 7.9% by FY2036. The share of mandatory spending in total federal spending is also projected to rise. Because costs of mandatory programs account for nearly two-thirds of total federal outlays, some budget experts contend that putting federal finances on a sustainable path would require significant reductions in federal spending, including cuts in entitlement spending. Other budget and social policy experts contend that curtailing entitlement program eligibility or benefits would compromise the goals of improving the economic security of the elderly and the poor, as well as mitigating the financial consequences of adverse events such as unemployment or disability.

Jan 31, 2017

The Airport and Airway Trust Fund (AATF): An Overview

The Airport and Airway Trust Fund (AATF), sometimes referred to as the aviation trust fund, has been the primary funding source for federal aviation programs since 1972. It provides all funding for three major accounts of the Federal Aviation Administration (FAA): the Airport Improvement Program (AIP), Facilities and Equipment (F&E), and Research, Engineering, and Development (RE&D). It also pays for most spending from FAA’s Operations and Maintenance (O&M) account. The trust fund is funded principally by a variety of taxes paid by users of the national aviation system. Revenue sources for the trust fund include taxes on airline passenger ticket sales, the flight segment tax, air cargo taxes, and aviation fuel taxes paid by both commercial and general aviation aircraft. In FY2016, the trust fund received revenues of over $14.4 billion in aviation taxes and fees. Between FY2012 and FY2016, the trust fund provided between 71% and 93% of FAA’s total appropriations, with the remainder coming from the general fund of the U.S. Treasury. In order to avoid disruptions, both the authority to collect aviation excise taxes and to spend from the trust fund must be reauthorized periodically by Congress. The latest such legislation, P.L. 114-190, reauthorized FAA, other civil aviation programs, and the collection of taxes to fund the AATF through FY2017. However, a full FY2017 appropriation has not been enacted. P.L. 114-254 extended funding of FAA programs and activities at the FY2016 annualized level of $16,281 million through April 28, 2017. The balance in the aviation trust fund is projected to increase over the next few years. However, the AATF’s long-term vitality remains subject to a variety of forces. Poor economic conditions or external events could curb demand for air travel, reducing revenue from the ticket taxes that are the main source of AATF funding. Changing airline business practices, particularly unbundling of ancillary fees for particular amenities from airfares, are adversely affecting AATF revenue, as only base airfares are subject to ticket taxes. The financial future of the trust fund also depends on future spending decisions, including FAA plans for substantial investment in the Next Generation Air Transportation System (NextGen) satellite-based air traffic control system. Proposals to shift air traffic control services from FAA to a government-owned corporation with an independent board of directors, which are expected to reemerge, raise a number of issues regarding AATF revenues and expenditures. A version of such a proposal approved by the House Transportation and Infrastructure Committee in 2016 would have allowed the corporation to impose user fees on some flights, principally commercial aviation. If user fees were to fund air traffic services, FAA would no longer require aviation tax revenues for this purpose. Congress might then consider options to restructure FAA’s financing mechanisms, such as lowering the aviation taxes that flow into the AATF or eliminating the general fund component of FAA funding.

Jan 31, 2017

Cross-Border Energy Trade in North America: Present and Potential

The United States, Canada, and Mexico in many ways comprise one large, integrated market for energy commodities. Canada, for example, is the single largest foreign supplier of crude oil to the United States, and the United States is Canada’s sole crude oil customer. Both Mexico and Canada are major buyers of petroleum products refined in the United States. A growing trade in natural gas produced in the United States is also increasingly important to the energy relationship among the three countries. Trade in the other energy commodities—electricity, natural gas liquids, and coal—is comparatively small, but regionally important. Altogether, the value of the energy trade between the United States and its North American neighbors exceeded $140 billion in 2015, with $100 billion in U.S. energy imports and over $40 billion in exports. The United States’ energy trade relationships with Canada and Mexico are increasingly complex. They have been undergoing fundamental change in recent years—largely due to technological advancements in the petroleum and natural gas sectors creating new competition for energy supplies and new market interconnections. Consequently, while energy policies in one country have inevitably affected the others, their cross-cutting effects in the future are difficult to predict. Nonetheless, a review of the recent trade data highlights several key market developments. U.S. crude oil imports from both Canada and Mexico dominate the energy trade, but they support U.S. supplies of refined products to both those countries—by far the United States’ largest energy export commodity to its two neighbors. U.S. development of shale gas resources has been substituting for Canadian natural gas imports and driving a rapid increase in natural gas exports to Mexico, where such supplies are in high demand to fuel that country’s growing electric power sector. Canada and, to a lesser extent, Mexico have potential to provide significant future supplies of renewable electricity to U.S. markets, which could help the United States meet environmental policy objectives. The expansion of cross-border energy transportation infrastructure—pipelines for oil and natural gas, and transmission lines for electricity—has been an ongoing enabler of increased energy trade. A number of new projects are currently under construction or proposed to further expand cross-border capacity, but their completion is not assured. To date, Congress has favored a growing North American energy partnership—but ensuring that this partnership continues to be as mutually beneficial as possible will likely remain a key oversight challenge for the next decades. Congress has been facing important policy questions in the U.S.-Canada and U.S.-Mexico energy contexts on several fronts, including the siting of major cross-border pipelines, increasing petroleum supplies from Canadian oil sands, exporting natural gas production from United States’ shales, and meeting commitments to increase renewable energy supplies and reduce atmospheric emissions of greenhouse gases. Legislative proposals in the 115th Congress could directly influence these developments.

Jan 30, 2017

FDA Medical Product User Fee Reauthorization: In Brief

Suppress; short paragraph provided with key terms to enable searching for this report: The Food and Drug Administration (FDA) regulates human medical products to ensure they are safe and effective for their intended use in patients. Medical products include prescription and nonprescription (over-the-counter) drugs, biologics or biological products, and medical devices. FDA regulation of these products involves both premarket and postmarket regulatory requirements. The four user fee programs discussed in this report are prescription drugs, medical devices, generic drugs, and biosimilars. The Prescription Drug User Fee Act of 1992 (PDUFA, P.L. 102-571); The Medical Device User Fee and Modernization Act of 2002 (MDUFMA, P.L. 107-250) or MDUFA; The Generic Drug User Fee Amendments of 2012 (GDUFA, Title III of FDASIA, P.L. 112-144); The Biosimilar User Fee Act of 2012 (BsUFA, Title IV of the Food and Drug Administration Safety and Innovation Act [FDASIA], P.L. 112-144). Center for Biologics Evaluation and Research (CBER) regulates traditional biologics, such as vaccines. Center for Devices and Radiological Health (CDRH) regulates medical devices. Center for Drug Evaluation and Research (CDER) regulates prescription brand-name and generic drugs, over-the-counter drugs, and most therapeutic biologics.

Jan 30, 2017

Background and Federal Efforts on Summer Youth Employment

Labor force activity for youth ages 16 to 24 has been in decline since the late 1990s. This trend has been consistent even during the summer months, when youth are most likely to be engaged in work. Labor force data from the month of July highlight changes in summer employment over time. For example, the employment rate—known as the employment to population (E/P) ratio—for youth was 64.1% in July 1996 and 53.2% in July 2016. Congress has long been concerned about ensuring that young people have productive pathways to adulthood, particularly for those youth who are low-income and have barriers to employment. One possible policy lever for improving youth employment prospects is providing jobs and supportive activities during the summer months. Generally, cities and other local jurisdictions carry out summer employment programs in which youth are placed in jobs or are otherwise participating in activities to facilitate their eventual entry into the workforce. Summer employment may serve multiple policy goals, including supporting low-income youth and their families, encouraging youth to develop “soft skills” that can help them navigate their environments and work well with others, and deterring youth from activities that could lead to them getting in trouble or being harmed. Data are limited on the number of youth engaged in summer employment. A survey of 40 cities reported that nearly 116,000 youth had summer jobs in 2015. This represents a small portion of the approximately 20 million youth ages 16 to 24 in the U.S. labor force during the summer. Localities fund summer employment activities with public and private dollars. Federal workforce laws since 1964 have authorized funding to local governments for their summer employment activities, primarily for low-income youth with barriers to employment; however, the laws’ provisions about summer employment have shifted over time. The existing federal workforce law, the Workforce Innovation and Opportunities Act (WIOA, P.L. 113-128), was enacted in 2014 and made summer employment an optional activity under the Youth Activities program. This program provides the major federal support for youth employment and job training activities throughout the United States. The Workforce Investment Act (WIA, P.L. 105-220) and other prior laws required localities to use Youth Activities funding for summer youth employment. Other recent federal efforts have sought to bolster the summer employment prospects for young people. Under the Summer Jobs and Beyond grant, the Department of Labor provided $21 million in FY2016 for 11 communities to expand work opportunities for youth during the summer. The executive branch has also encouraged other federal programs, including the Temporary Assistance for Needy Families (TANF) program, to provide employment to eligible youth during the summer. Separately, the Obama Administration forged partnerships with the private and nonprofit sectors to expand summer jobs. For example, the My Brother’s Keeper initiative has engaged the private sector in providing job and other opportunities for young men of color. Summer youth employment is short in duration and can range in intensity for youth participants. Therefore, it may not necessarily lead to changes in behavior or employment outcomes. In considering whether to further support localities in expanding summer employment, Congress may want to examine the efficacy of existing summer employment programs and promising approaches to serving young people in these programs. A small number of rigorously evaluated summer job programs show promise on selected youth outcomes, including programs in Chicago and New York City. A recent study has identified features of high-quality summer employment programs. Such features include a focus on recruiting and supporting youth and employers, a well-trained staff that coordinates with employers and other partners, and technologies to administer the program and facilitate communication with stakeholders.

Jan 25, 2017

Clean Air Act Issues in the 115th Congress: In Brief

In the new Congress, review of regulations issued under the Obama Administration, with the possibility of their modification or repeal, is expected to be a main focus of Congressional action on Clean Air Act issues. Of particular interest are the Clean Power Plan (CPP) and related Environmental Protection Agency (EPA) rules to regulate greenhouse gas (GHG) emissions from power plants, promulgated on August 3, 2015. Other GHG emission standards affecting cars, trucks, and the oil and gas sector may also be reviewed. Reducing GHG emissions to address climate change was a major goal of President Obama, but, for a variety of reasons, many in Congress have been opposed to it. In the absence of congressional action, President Obama directed EPA to promulgate GHG emission standards using existing Clean Air Act authority. This authority has been upheld on three occasions by the Supreme Court, but it remains controversial in Congress and among Cabinet appointees of the Trump Administration. With key figures in Congress and the new Administration having expressed opposition to GHG regulations, major changes in the GHG regulatory structure are possible. The CPP has been a frequent topic in articles discussing the new Congress’s priorities; in the near term, however, the courts seem the more likely venue for action. Implementation of the CPP was stayed by the Supreme Court in February 2016, pending the completion of judicial review. Challenges to the rule had been filed with the D.C. Circuit Court of Appeals by more than 100 parties, including 27 states. These challenges have been consolidated into a single case, West Virginia v. EPA. The D.C. Circuit heard oral argument in the case in September 2016; as of this writing, the court has not issued a decision. There is general agreement that whatever decision the court hands down will be appealed to the Supreme Court, adding more time before completion of the judicial process. EPA, under new leadership, could also take steps to modify the CPP. Like judicial review, this route could be time-consuming. Modifying the rule would likely require the agency to follow the administrative steps involved in proposing and promulgating a new rule. Following promulgation, the new rule would itself be subject to judicial review. A large group of stakeholders, including some states, might oppose major changes to the CPP. The EPA and judicial processes could be short-circuited by Congress, through legislation overturning or modifying the CPP. The threat of a filibuster, requiring 60 votes to proceed, might prevent Senate action, however. By contrast, four other Clean Air Act rules might be more easily overturned by Congress under the Congressional Review Act (CRA). The CRA established a special set of procedures, including fast-track procedures in the Senate available during a limited period of time, under which Congress may consider legislation to overturn regulations following their promulgation and submission to Congress. Rules received by Congress on or after June 13, 2016, including GHG emission standards for medium- and heavy-duty trucks, an update to EPA’s Cross-State Air Pollution Rule, and methane standards for landfills, are potentially eligible for review. If Congress passes a joint resolution disapproving a rule under procedures provided by the CRA, and the resolution becomes law, the rule cannot take effect or continue in effect. Also, the agency may not reissue either that rule or any substantially similar one, except under authority of a subsequently enacted law. In addition to GHG rules, another EPA rule that could be subject to renewed interest in the 115th Congress is the National Ambient Air Quality Standard for ozone, which EPA promulgated in October 2015. Like the CPP, the ozone standard is reported to be a rule that President Trump has identified for repeal. More than a dozen bills to modify the rule or delay its implementation were introduced in the 114th Congress, two of which passed the House.

Jan 24, 2017

Defining “Industrial Hemp”: A Fact Sheet

Botanically, industrial hemp and marijuana are from the same species of plant, Cannabis sativa, but from different varieties or cultivars. However, industrial hemp and marijuana are genetically distinct forms of cannabis that are distinguished by their use and chemical makeup as well as by differing cultivation practices in their production. While marijuana generally refers primarily to the psychotropic drug (whether used for medicinal or recreational purposes), industrial hemp is cultivated for use in the production of a wide range of products, including foods and beverages, personal care products, nutritional supplements, fabrics and textiles, paper, construction materials, and other manufactured goods. Both hemp and marijuana have separate statutory definitions in U.S. law.

Jan 23, 2017

National Fish and Wildlife Foundation (NFWF): History, Function, and Funding

The National Fish and Wildlife Foundation (NFWF) was chartered by Congress in 1984 to aid in the conservation of plants, animals, and ecosystems; many of its projects involve work with federal agencies. By statute, NFWF is a “charitable and nonprofit corporation and is not an agency or establishment of the United States.” Registered under the Internal Revenue Code (IRC) Section 501(c)(3), NFWF is not a part of the Fish and Wildlife Service (FWS, Department of the Interior), though it does have certain links to that agency, as well as to the National Oceanic and Atmospheric Administration (NOAA). NFWF offers opportunities to individuals and corporations to make tax-deductible contributions to promote plant, animal, and ecosystem conservation in peer-reviewed projects. It also allows federal agencies to seek partners who wish to aid in such projects, and it sometimes serves as a conduit for the management of fines or funds resulting from court settlements to mitigate damage to fish and wildlife. NFWF projects may benefit conservation on federal lands, but other ownerships also may receive benefits. NFWF differs from such other federal foundations as the National Park Foundation and the National Forest Foundation in having much more tenuous links to federal agencies; many NFWF projects have no link to any federal agency. If Congress considers legislation to create additional foundations associated with the missions of other federal land agencies, such as the Bureau of Land Management (BLM)—or for other purposes, such as Indian education—NFWF and the two foundations noted above offer three different models for such an effort.

Jan 17, 2017

U.S. Farm Program Eligibility and Payment Limits

Current U.S. farm program participants—whether individuals or multi-person legal entities—must meet specific eligibility requirements to receive benefits under certain farm programs. Some requirements are common across most programs while others are specific to individual programs. In addition, program participants are subject to annual payment limits that vary across different combinations of farm programs. Federal farm support programs, along with their current eligibility requirements and payment limits, are listed in Table 1. Since 1970, Congress has used varying policies to address the issue of who should be eligible for farm payments and how much should an individual recipient be permitted to receive in a single year. In recent years, congressional policy has focused on tracking payments through multi-person entities to individual recipients (referred to as direct attribution); ensuring that payments go to persons or entities actively engaged in farming; capping the amount of payments that a qualifying recipient may receive in any one year; and excluding farmers or farming entities with large average incomes from payment eligibility. Current eligibility requirements that affect multiple programs include identification of every participating person or legal entity—both U.S. and non-U.S. citizens; the nature and extent of an individual’s participation (i.e., actively engaged in farming criteria) including ownership interests in multi-person entities and personal time commitments (whether as labor or management); means testing—persons with combined farm and nonfarm adjusted gross income (AGI) in excess of $900,000 are ineligible for most program benefits; and conservation compliance requirements. In general, if a foreign person or legal entity meets a program’s eligibility requirements, then they are eligible to participate. One exception is the four permanent disaster assistance programs created under the 2014 farm bill (P.L. 113-79) and the noninsured crop disaster assistance program (NAP) whereby non-resident aliens are excluded. The process of tracking payments to an individual through various levels of ownership in single or multi-person legal entities is critical for assessing an individual’s cumulative payments against their annual payment limit. Current law requires direct attribution through four levels of ownership in multi-person legal entities. Current payment limits include a cumulative limit of $125,000 for all covered commodities under major Title I revenue support programs, with the exception of peanuts, which has its own $125,000 limit. The permanent disaster assistance programs also have a $125,000 per crop year limit, with some exceptions. Supporters of payment limits contend that large payments facilitate consolidation of farms into larger units, raise the price of land, and put smaller, family-sized farming operations and beginning farmers at a disadvantage. In addition, they argue that large payments undermine public support for farm subsidies and are costly. Critics of payment limits counter that all farms need support, especially when market prices decline, and that larger farms should not be penalized for the economies of size and efficiencies they have achieved. Further, critics argue that farm payments help U.S. agriculture compete in global markets, and that income testing is at odds with federal farm policies directed toward improving U.S. agriculture and its competitiveness. As part of the next farm bill debate, Congress may again address these concerns, as well as the following questions: How does policy design of payment limits relate to their distributional impact on crops, regions, and farm size? Is there an optimal aggregation of payment limits across commodities or programs? Do unlimited benefits under the marketing assistance loan program’s forfeiture or commodity certificate exchanges reduce the effectiveness of overall payment limits?

Jan 17, 2017

Russia and the U.S. Presidential Election

On January 6, 2016, the Office of the Director of National Intelligence (ODNI) released a declassified report on Russian activities and intentions related to the 2016 U.S. presidential election. The report states that the Central Intelligence Agency (CIA), the Federal Bureau of Investigation (FBI), and the National Security Agency (NSA) have “high confidence” that Russian President Vladimir Putin “ordered an influence campaign in 2016 aimed at the US presidential election” in order to “undermine public faith in the US democratic process, denigrate [Hillary] Clinton, and harm her electability and potential presidency.” The report also contends the Russian government “aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him.” Allegations Unofficial allegations of Russian interference in the presidential election were made public in or around June 2016. It is alleged that the Russian government illicitly collected and authorized the release of emails and documents of the Democratic National Committee (DNC) and emails of Clinton’s campaign chairman John Podesta. These operations were alleged to be part of broader collection efforts against the Democratic Party. Targets included other Clinton campaign staffers (some of whom had emails released) and the Democratic Congressional Campaign Committee (which had emails and personal information released). Operations focused on the Democratic Party, in turn, were alleged to be part of a broader campaign against U.S. and international targets. In the United States, targets were alleged to have included a number of Republican-connected individuals, including state-level officials and campaigns, as well as former NATO Supreme Allied Commander Phillip Breedlove and former Secretary of State Colin Powell. While collection efforts included Republican targets, FBI Director James Comey stated in a January 10, 2017, hearing that Russian hackers breached and exfiltrated data from “old domains” of the Republican National Committee (RNC) and that investigators found no evidence that the current RNC or the Trump campaign were “successfully hacked.” No emails connected to either the committee or the campaign were released. The majority of emails that were released, including most of those from the DNC and Podesta, were disclosed by Wikileaks, which was alleged to have received emails from Russian intelligence-connected sources. Other emails and materials were released by online persona Guccifer 2.0 and website DC Leaks, both allegedly linked to Russian intelligence. The ODNI report generally corroborates these claims. It also corroborates further claims that “Russian intelligence accessed elements of multiple state or local electoral boards” and that the Russian government engaged in international propaganda efforts through state-run media and “quasi-government trolls” to praise Trump and denigrate Clinton. While some state-level voter registration systems may have been hacked, the report states there is no evidence of tampering with vote tallies or that information in emails released by Wikileaks had been tampered with prior to their release. It also states that while Russia pursued Republican-affiliated targets, it “did not conduct a comparable disclosure campaign.” Evidence Debate Previously, the Department of Homeland Security and FBI released a Joint Analysis Report (JAR) on December 29 that also attributes these malicious activities—known collectively as Grizzly Steppe—to Russia. The JAR does not present evidence but instead reveals “indicators of compromise” and actions for network defenders to take using these indicators. As a general practice, the intelligence community does not present evidentiary proof of attribution that is obtained through clandestine collection if there is a possibility of revealing sources and methods and thereby compromising future sources. The lack of clear open source evidence has led some to question the validity of the attribution. In addition, some of the indicators of malicious cyber activity that were reported to be linked to Grizzly Steppe were later proven unrelated. Potential Impact While much of the reporting refers to the cyber element of Russian activities, the series of network intrusions, reconnaissance, and data releases appear to be tactical weapons used in support of a broader information warfare campaign around the U.S. presidential election. Data exfiltration from the networks belonging to both political parties could offer the Russian government insight to the negotiating strategies, redlines, foreign policy goals, and platforms of the incoming Administration, whatever the election outcome. Cyber tools were also used to create psychological effects in the American population. The likely collateral effects of these activities include compromising the fidelity of information, sowing discord and doubt in the American public about the validity of intelligence community reports, and prompting questions about the legitimacy of the democratic process itself. Although it is clear these operations attempted to influence American voters, the January 6 report notes that the intelligence community “did not make an assessment of the impact that Russian activities had on the outcome of the 2016 election.” U.S. Response On December 29, 2016, President Obama imposed sanctions for election-related malicious cyber activity by expanding an existing executive order issued in April 2015. The Obama Administration identified nine individuals and entities, including Russia’s two leading intelligence agencies, for election-related malicious cyber activity. Designees are subject to blocking of assets under U.S. jurisdiction, prohibitions on transactions with U.S. persons, and (for individuals) denial of entry into the United States. Some have questioned whether sanctions would have a deterrent effect and if more punitive measures should be taken against the Russian government. Based on comments from U.S. officials, there may be additional responses. The nature of these activities has raised questions as to whether they constitute an act of war or espionage. There are no clear criteria for determining whether a cyberattack should be considered a use of force that could justify a military response. Whether or not Russian cyber activity is declared an act of war, at least two authorities provide for military operations in cyberspace. Under Title 10, the Department of Defense may conduct offensive cyberspace operations upon direction of the President, subject to the War Powers Resolution (50 U.S.C. 1541). The President may also order a covert operation under Title 50 authorities. Offensive cyberspace operations and influence operations can be examples of covert activities conducted without a formal declaration of war.

Jan 17, 2017

The Holman Rule (House Rule XXI, Clause 2(b))

Although congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding, House rules provide for exceptions in certain circumstances. One such circumstance allows for the inclusion of legislative language in general appropriations bills or amendments thereto for “germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill.” This exception appears in clause 2(b) of House Rule XXI and is known as the Holman rule, after Representative William Holman of Indiana, who first proposed the exception in 1876. Since the period immediately after its initial adoption, the House has interpreted the Holman rule through precedents that have tended to incrementally narrow its application. Under current precedents, for a legislative provision or amendment to be in order, the legislative language in question must be both germane to other provisions in the measure and must produce a clear reduction of appropriations in that bill. In addition, the House has also adopted a separate order for the first session of the 115th Congress that provides that retrenchments of expenditures by a reduction of amounts of money covered by the bill shall be construed as applying to: any provision or amendment that retrenches expenditures by— (1) the reduction of amounts of money in the bill; (2) the reduction of the number and salary of the officers of the United States; or (3) the reduction of the compensation of any person paid out of the Treasury of the United States. This report provides a history of this provision in House rules and an analysis of precedents that are illustrative of its possible application.

Jan 13, 2017

Water Resource Issues in the 115th Congress

The 115th Congress faces various water resource development, management, and protection issues. Water resource activities generally encompass navigation improvements, flood damage reduction measures, water supply augmentation, hydropower generation, and aquatic ecosystem restoration. Congressional actions shape reinvestment in aging federal infrastructure (e.g., dams, locks, and levees) and federal and nonfederal investment in new projects. The principal agencies involved in federal water resource infrastructure are the U.S. Army Corps of Engineers (Corps) and the Department of the Interior’s Bureau of Reclamation (Reclamation). Oversight of Enacted Legislation. Water resource issues during 115th Congress are shaped in part by legislation enacted in earlier Congresses. The 114th Congress passed a broad water bill in December 2016—the Water Infrastructure Improvements for the Nation Act (WIIN or WIIN Act; P.L. 114-322)—that addressed water resource and water quality issues. Of its water resource provisions, WIIN authorized a broad array of water resource activities for the Corps; addressed selected Department of the Interior water issues, including Reclamation projects and related water project management in California and other western states and management of selected Indian water projects; and authorized various regional aquatic ecosystem restoration activities. Some of WIIN’s Reclamation-related provisions on water conveyance and supply in California in particular remain the subject of attention by federal and local policymakers. Supporters of the WIIN provisions view these provisions as a compromise that may deliver greater water supplies to users; critics suggest that the provisions may alter environmental protections in California, thereby potentially harming threatened and endangered species, and that they may alter Congress’s ability to oversee new projects. For more on WIIN, see CRS In Focus IF10536, Water Infrastructure Improvements for the Nation Act (WIIN), by Nicole T. Carter et al. Water Resource Issues in the 115th Congress. The 115th Congress may consider legislative proposals on water resource issues that were not addressed by WIIN, including those in legislative proposals considered but not enacted in previous Congresses. Congressional deliberations are within the context of broad issues shaping federal water resource activities. Areas of interest include the following: financing investments in water resource infrastructure, changing federal partnerships, funding and authorizing projects and the earmark debate, restoring aquatic ecosystems, and improving drought and flood preparedness and response. Within these broad issues, potential topics of congressional interest include authorization of additional studies and projects; public and private hydropower improvements; aging water infrastructure rehabilitation; recreational activities at federal projects; water research and science investment and coordination; and environmental requirements, including protection of threatened and endangered species. The 115th Congress also may consider issues that arise at the regional or local levels but have some federal involvement. For example, Congress may engage in policy debates and oversight related to the Columbia River, the Sacramento and San Joaquin River basins, the Colorado River, and the Southeast’s Apalachicola-Chattahoochee-Flint Basin due to the role of federal infrastructure and other efforts in these areas. Additionally, budget and appropriations issues often play a key role in directing each agency’s activities and priorities.

Jan 13, 2017

The Closure of Institutions of Higher Education: Student Options, Borrower Relief, and Implications

The recent closures of multiple large, private for-profit institutions of higher education (IHEs), such as those owned by Corinthian Colleges, Inc. (e.g., Heald College) and ITT Educational Services (e.g., ITT Technical Institutes) have brought into focus the extent to which a student’s postsecondary education may be disrupted by a school closure. The closures of these IHEs also highlighted the numerous issues students may face when their institutions close and the difficult decisions they may be required to make in the wake of a closure. Two key issues students may face when their IHE closes relate to their academic plans and their personal finances. The academic issues faced by students when their schools close include whether they will continue to pursue their postsecondary education, and if so, where and how they might do so. Students deciding to continue their postsecondary education have several options. They may participate in a teach-out offered by the closing institution or by another institution. A teach-out is a plan that provides students with the opportunity to complete their program of study after a school has closed. In conjunction with or in lieu of participating in a teach-out, students may also be able to transfer the credits they previously earned at the closed IHE to another IHE. If a student is able to transfer some or all of their previously earned credits, he or she would not be required to repeat the classes those credits represent at the new institution; if a student is unable to transfer all or some of his or her previously earned credits, the student may be required to repeat the classes those credits represent at the new IHE. Decisions regarding the acceptance of credit transfers are within the discretion of the accepting IHE. The financial issues faced by students when their schools close include whether they are responsible for repaying any loans borrowed to attend a closed school and how they might finance any additional postsecondary education they pursue. In general, a closed school loan discharge is available to a borrower of federal student loans made under Title IV of the Higher Education Act of 1965 (HEA) if the student was enrolled at the IHE when it closed or if the student withdrew from the IHE within 120 days prior to its closure. In addition, the student must have been unable to complete his or her program of study at the closed school or a comparable program at another IHE, either through a teach-out agreement or by transferring any credits to another IHE. Borrowers ineligible for a closed school discharge may be eligible to have their Federal Direct Loan and Federal Family Education Loan program loans discharged by successfully asserting as a defense to repayment (DTR) certain acts or omissions of an IHE, if the cause of action directly relates to the loan or educational services for which the loan was provided. Whether a borrower may have all or part of any private education loans borrowed to attend the closed IHE discharged depends on the loan’s terms and conditions. Some students may also face issues regarding how they might finance future postsecondary educational pursuits. If a borrower receives a closed school discharge or has a successful DTR claim, his or her eligibility for future Direct Subsidized Loans and Pell Grants is unlikely to be affected. Moreover, a borrower’s statutory annual and aggregate borrowing limits on Direct Subsidized and Unsubsidized Loans are unlikely to be affected. However, if the borrower used GI Bill educational benefits for attendance at a closed school, those benefits cannot be restored for purposes of attending another institution. Students may be reimbursed for payments on charges levied by closed IHEs that are not covered by other sources from a State Tuition Recovery Fund (STRF). The availability of and student eligibility for such funds vary by state, and not all states operate STRFs. Finally, the receipt of any of the above-mentioned benefits may have federal and state income tax implications, including the potential creation of a federal income tax liability for borrowers who have certain loans discharged.

Jan 12, 2017

Finding Medicare Enrollment Statistics

There is no single source for Medicare enrollment statistics. Various sources described in this report present different breakdowns of enrollment data, including coverage type (Parts A, B, C, and D), beneficiary type (aged, disabled), and geographic area. This report provides guidance in determining the most current sources for different categories of enrollment data. The report presents basic categories and definitions for terms related to Medicare enrollment data, a quick reference table that summarizes key data available in selected resources, and a more detailed overview of core resources.

Jan 12, 2017

How Legislation Is Brought to the House Floor: A Snapshot of Parliamentary Practice in the 114th Congress (2015-2016)

The House of Representatives has several different parliamentary procedures through which it can bring legislation to the chamber floor. Which of these will be used in a given situation depends on many factors, including the type of measure being considered, its cost, the amount of political or policy controversy surrounding it, and the degree to which Members want to debate it and propose amendments. This report provides a snapshot of the forms and origins of measures that, according to the Legislative Information System of the U.S. Congress, received action on the House floor in the 114th Congress (2015-2016) and the parliamentary procedures used to bring them up for initial House consideration. In the 114th Congress, 1,200 pieces of legislation received floor action in the House of Representatives. Of these, 907 (76%) were bills or joint resolutions, and 293 (24%) were simple or concurrent resolutions. Of these 1,200 measures, 1,068 originated in the House, and 132 originated in the Senate. During the same period, 62% of all measures receiving initial House floor action came before the chamber under the Suspension of the Rules procedure, 16% came to the floor as business “privileged” under House rules and precedents, 14% were raised by a special rule reported by the Committee on Rules and adopted by the House, and 7% came up by the unanimous consent of Members. One measure was processed under the procedures associated with clause 2 of Rule XV, the House Discharge Rule. When only lawmaking forms of legislation (bills and joint resolutions) are counted, 78% of measures receiving initial House floor action in the 114th Congresses came before the chamber under the Suspension of the Rules procedure, 18% were raised by a special rule reported by the Committee on Rules and adopted by the House, and 5% came up by unanimous consent. No lawmaking forms of legislation received House floor action via the Discharge Rule or by virtue of being “privileged” under House rules. The party sponsorship of legislation receiving initial floor action in the 114th Congress varied based on the procedure used to raise the legislation on the chamber floor. Sixty-nine percent of the measures considered under the Suspension of the Rules procedure were sponsored by majority party Members. All but one of the 172 measures brought before the House under the terms of a special rule reported by the House Committee on Rules and adopted by the House were sponsored by majority party Members.

Jan 11, 2017

Overview of U.S. Sanctions Regimes on Russia

Background On December 29, 2016, President Barack Obama imposed sanctions on Russia for malicious cyber activity. These are the latest in a series of U.S. sanctions regimes that have been imposed on Russia over the last several years in response to activities that are state-sponsored or allegedly conducted by government officials. In addition, a number of Russian individuals and entities are subject to sanctions for terrorism, transnational crime, and weapons proliferation. The United States’ use of economic sanctions in furtherance of national security or foreign policy is implemented, primarily, by the Departments of State (visas, arms embargos, arms sales, foreign aid, and in limited circumstances, prohibiting the use of U.S. passports to travel), Commerce (commercial exports), Defense (arms sales), Justice (investigation and prosecution), and the Treasury (blocking assets, prohibiting transactions, licensing export transactions, financial services, and in limited circumstances, restricting transactions related to travel). Interagency consulting occurs in implementing and administering any economic sanctions regime. In the 115th Congress, Members are drafting legislation to require sanctions on Russia for its cyber intrusions and other aggressive activities (pending in the Senate), and election interference (pending in the House). Malicious Cyber Activity The Obama Administration has identified four individuals and five entities as “tampering with, altering, or causing a misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions.” Designees include Russia’s leading spy agency (Federal Security Service, or FSB), military intelligence (Main Intelligence Directorate, or GRU), and senior GRU officials (including its head). In addition, two individuals are subject to sanctions for malicious cyber activity unrelated to elections. Designees are subject to sanctions—blocking of assets under U.S. jurisdiction, prohibitions on transactions with U.S. persons, and denial of entry into the United States. Human Rights Congress enacted the Sergei Magnitsky Rule of Law Accountability Act of 2012 (title IV, P.L. 112-208; 22 U.S.C. 5811 note) to require the President to identify the person(s) involved in the detention, abuse, or death of Sergei Magnitsky, and the ensuing cover-up, or who are “responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights” in Russia. Designees are subject to sanctions—blocking of assets and visa denial. To date, 44 individuals are subject to Magnitsky sanctions. Ukraine Since 2014, the United States has imposed sanctions on over 520 individuals and entities in response to Russia’s invasion and annexation of Ukraine’s Crimea region and support of separatist militants in the Donetsk and Luhansk regions (see CRS In Focus IF10552, U.S. Sanctions on Russia Related to the Ukraine Conflict). The United States, in coordination with the European Union and others, promised to impose increasing costs on Russia until it “abides by its international obligations and returns its military forces to their original bases and respects Ukraine’s sovereignty and territorial integrity.” These sanctions derive from a series of executive orders issued in 2014, when President Obama declared Russia’s activities in Ukraine to constitute a threat to U.S. national security. Sanctions apply to a number of Russian officials and members of Putin’s “inner circle,” as well as to key financial, defense, and energy companies, and companies that do business in Crimea. Legislation (P.L. 113-95, P.L. 113-272) that partially codifies these executive orders includes mandatory and discretionary sanctions. The legislation also specifically requires sanctions against state-run arms exporter Rosoboronexport; Russian entities that transfer weapons to Syria, Ukraine, Georgia, or Moldova; and Gazprom, if it is found to withhold natural gas from NATO member states. In addition to Treasury blocking assets and State denying visas, Treasury restricts transactions related to investment and debt-holding for five state-controlled banks; transactions related to debt-holding for a major state-controlled defense conglomerate and four energy companies; and transactions related to deepwater, Arctic offshore, and shale oil exploration projects. The Departments of State and Commerce, in addition, deny export licenses for military, dual-use, and energy-related goods for Crimea-located and other designated end-users (over 160 in all, most of which are also subject to Treasury-administered sanctions). Syria A series of executive orders impose sanctions on the Syrian government and its supporters. Russian designees include the private bank Tempbank and its managers, and Russian Financial Alliance Bank, including shareholder Kirsan Ilyumzhinov, a former regional politician (and the World Chess Federation president). Terrorism and Transnational Crime Treasury’s Office of Foreign Assets Control has identified several Russian individuals and entities, and foreign nationals with Russian addresses, under other sanctions regimes premised on legislative requirements or Executive Orders. The designations are primarily part of sanctions regimes related to terrorism and transnational crime, and are subject to restrictions on access to assets under U.S. jurisdiction and prohibited from engaging in transactions with U.S. persons. Weapons Proliferators Several laws require the President, when he determines that trade occurs in weapons of mass destruction or advanced conventional weapons, to impose economic sanctions on those engaged in the trade—individuals, entities, or states, depending on the activity—of 1-to-2 years’ duration. Restrictions cover a range, but generally include a cutoff of procurement contracts with the U.S. government. Pursuant to requirements of the Iran, North Korea, and Syria Nonproliferation Act (P.L. 109-353; 50 U.S.C. 1701 note), for example, U.S. government procurement contracts, certain export licenses, U.S. foreign aid, and trade in U.S. Munitions List-controlled goods and services are not available to Rosoboronexport (with exceptions), nor to a number of Russian defense companies. Other Restrictions Based on Export Controls The Department of Commerce’s Bureau of Industry Security (BIS) controls exports to Russia based on a matrix of end-user, end-use (with possible dual-use applications), various obligations defined by treaties and international agreements related to controls for weapons proliferation, and national security and foreign policy determinations. Restrictions identify end-users, military end-use, sectors, and regions (the latter two triggered by Ukraine events). Russia is also defined as a country for which national security controls are in place, and for which nuclear-related exports are controlled, to meet obligations to the Nuclear Suppliers Group. Restrictions on U.S. Government Funding Foreign aid and State Department programs benefiting Russia are significantly constrained in current foreign operations appropriations (P.L. 114-113; §7015(f), §7070). There are also restrictions on Defense and Energy appropriations (P.L. 114-92). Finally, Russia is identified as failing to meet minimum standards for the elimination of human trafficking, which requires limits on aid and cultural exchanges, the latter of which is waived for U.S. national interests.

Jan 11, 2017

Army Corps Projects and Tribal Consultation: Requirements, Policies, and Controversy

Much of the current congressional and public interest in tribal consultation related to U.S. Army Corps of Engineers (Corps) water projects grew out of the Dakota Access Pipeline (DAPL) controversy. Part of the DAPL controversy involves easements at Corps projects for a private oil pipeline and how those easements may affect tribal resources—especially water supplies. The Corps builds and operates water resource projects across the nation. The Corps’ inventory of water projects includes 702 dams and reservoirs and almost 12 million acres of Corps-owned or -managed lands. The Corps may consult with tribes before deciding to construct or modify a project or allow a nonfederal alteration of a Corps project or right-of-way across Corps land. Tribal consultation generally is triggered when an action at a Corps project possibly may affect tribal cultural properties or tribal natural resources. Some duties to consult with tribes are prescribed by law, whereas others are codified in regulations; still others are conducted in conformance with executive branch or agency policy. In October 2016, the Obama Administration initiated a national consultation with tribes to get their input into federal infrastructure-related reviews and decisions broadly. Primer on Tribal Consultation Requirements and Policy The principal federal statutes that require federal agencies to engage in tribal consultations before deciding on certain undertakings are the National Historic Preservation Act (NHPA; 54 U.S.C. §§300101 et seq.); American Indian Religious Freedom Act (14 U.S.C. §§1996 et seq.); Archeological Resources Protection Act of 1979 (16 U.S.C. §470aa-mm); and Native American Graves Protection and Repatriation Act (25 U.S.C. §§3001 et seq.). None of these statutes, however, defines what constitutes consultation with the governments of the federally recognized Indian tribes. Federal actions also are subject to review under the National Environmental Policy Act (NEPA). For proposed actions with potential impacts on tribes, regulations implementing NEPA require an agency to consult with tribes early in the planning process. The agency also must invite tribes to participate in the scoping of issues and request comments from the affected tribes. How consultation is performed largely is based on executive branch policy. Executive branch guidance (e.g., a 2009 Presidential Memorandum and Executive Order 13175 from 2000 on tribal consultation) establishes broadly how federal agencies should approach tribal consultation. Individual departments and agencies determine the specific processes used for consultation. Tribe-related judicial decisions also shape consultation. Although an agency may be obligated to consult, it is not required to adopt suggestions made by tribal consultees. Corps Tribal Consultation Some Corps projects have complex histories with certain tribes that may influence how those tribes prefer for consultation to be conducted and scoped. For example, tribes may desire more extensive consultation before the agency approves an action at a Corps reservoir whose construction inundated previous tribal lands. Indian tribes may identify properties with cultural and religious significance on or off current tribal lands, including at or near Corps projects. The Corps adopted a Tribal Consultation Policy in 2012. The Corps varies the specific actions used to notify and engage tribes depending on the nature of its undertaking; it also adapts consultation efforts to reflect the consulting tribes’ administrations and cultures. Certain timelines and procedural requirements, however, are specified in law or regulation and can affect the pace and nature of consultation. A prominent statutory trigger for tribal consultation is in Section 106 of the NHPA (hereinafter NHPA Section 106). It requires a federal agency to consult with tribes when considering the effects of federal undertakings on historic properties that have tribal religious and cultural significance. For undertakings associated with its water projects (including the granting of easements at Corps projects), the Corps follows the NHPA Section 106 regulations that were promulgated by the Advisory Council for Historic Preservation (36 C.F.R. Subpart 800). More recently, Section 1120 of P.L. 114-322, enacted in December 2016, included requirements for the Corps to submit reports developed pursuant to the 2012 Tribal Consultation Policy to the House Transportation and Infrastructure Committee and Senate Environment and Public Works Committee. It also required the Assistant Secretary of the Army (Civil Works) to submit a review of existing policies, regulations, and guidance on Corps tribal consultation by the end of 2017. In addition to managing federal water projects, the Corps operates a regulatory program for the permitting of nonfederal actions affecting wetland and navigable waters. The Corps’ regulatory program follows Corps-developed procedures (33 C.F.R. Subpart 325 Appendix C) for its NHPA Section 106 compliance. The Corps regulatory program and its NHPA compliance are beyond the scope of this CRS Insight. Recent Tribal Controversy Related to Corps Projects The Dakota Access Pipeline developer requested Corps easements for the pipeline to cross Corps-owned and Corps-managed lands. The most controversial easements are for the pipeline’s construction and operation underneath the Corps-owned Lake Oahe on the Missouri River. At issue is the Corps decisionmaking process, including how the agency consulted with tribes and evaluated and addressed potential effects of the easements on tribal resources. The pipeline’s route beneath the Missouri River in North Dakota upstream of and near to tribal lands has raised environmental justice concerns. Tribes view consultation as a tribal right emanating from their sovereignty; they see protection of tribal resources as a federal trust responsibility. The DAPL controversy has touched on concerns common to many tribes: whether federal agencies engage in meaningful consultation prior to making decisions and how well the agencies meet the government’s tribal trust responsibilities. Two other common tribal concerns with consultation include the consistency of consultation across federal agencies and the level of federal effort to avoid, minimize, or mitigate impacts to tribal resources. Critics of altering consultation and mitigation practices to address these tribal concerns argue that more extensive consultation requirements could further delay and add uncertainty to already complex federal decisionmaking processes, thereby discouraging private investment and infrastructure development. They argue that current consultation processes adequately provide for tribal input and resource protection while also allowing for agency decisions to be in the broader public interest.

Jan 9, 2017

Expanding Federal Support for Urban Agriculture

Jan 9, 2017

Haiti Declares Winner of Presidential Election After Delays

Jan 6, 2017

Water Infrastructure Improvements for the Nation Act (WIIN)

Jan 6, 2017

Increasing Choice, Access, and Quality in Health Care for Americans Act (Division C of P.L. 114-255)

This report summarizes the Increasing Choice, Access, and Quality in Health Care for Americans Act, enacted December 13, 2016, as Division C of the 21st Century Cures Act (P.L. 114-255). Division C comprises Title XV through Title XVII, which include provisions primarily relating to Medicare and Title XVIII, which includes a provision relating to the small-group health insurance market. Title XV Medicare Part A provisions: extend the Rural Community Hospital demonstration five years; require the Secretary of the Department of Health and Human Services (HHS) to account for socioeconomic factors in administering the Hospital Readmission Reduction Program; reduce a specific inpatient hospital payment update for FY2018; require the HHS Secretary to create a crosswalk between codes used for reimbursing procedures performed in inpatient and outpatient settings; and make adjustments to long-term care hospital (LTCH) reimbursement including creating or reinstating temporary clinical criteria for payment under the LTCH prospective payment system (PPS) rather than site neutral payment; modifying the average length of stay formula that determines whether a hospital qualifies as an LTCH; reinstating an exemption from a temporary moratorium on additional LTCH beds; delaying implementation of a rule that lowers reimbursement for certain LTCHs that rely disproportionately on referrals from a single acute-care hospital; and creating a new, non-LTCH hospital category in statute for a specific type of long-stay hospital. Title XVI Medicare Part B provisions: make modifications for PPS-exempt cancer hospital and certain new provider-based hospital outpatient departments to be paid under the outpatient PPS; exclude certain ambulatory surgical center-based eligible professionals from the electronic health records meaningful use payment adjustment; allow physical therapists who furnish outpatient physical therapy in certain areas to use locum tenens arrangements for payment purposes; extend the delay in enforcement of direct physician supervision requirements for outpatient therapeutic services in critical access hospitals and small rural hospitals; and make changes to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) payment including delaying when competitive bidding information can be used to adjust fee schedule rates for Group 3 complex rehabilitative power wheelchairs accessories; extending the transition to the adjusted fee schedule for DMEPOS; and requiring the HHS Secretary to consider stakeholder input when adjusting fee schedule rates outside of competitive bidding areas. Title XVII’s other Medicare provisions: express Congress’s intent to continue to study the effects of socioeconomic status and dual-eligible populations on the Medicare Advantage (MA) five-star rating system before reforming the system with stakeholder input; instruct that the HHS Secretary may not terminate MA or Prescription Drug Plan (PDP) contracts solely because of failure to achieve a minimum quality rating; create a three-month period at the beginning of the year during which an MA enrollee may switch to a different MA plan or return to Medicare Parts A and B (with or without a PDP); allow beneficiaries with end-stage renal disease (ESRD) to enroll in MA beginning January 1, 2021; modify the requirements for assigning beneficiaries to Medicare Shared Savings Program (MSSP) accountable care organizations; require the HHS Secretary to submit Medicare enrollment data to Congress annually; require the HHS Secretary to update the new beneficiary Welcome to Medicare package; and authorize the HHS Secretary to prohibit payment for services or items furnished by Medicare, Medicaid, or State Children’s Health Insurance Program providers and suppliers who are subject to temporary new provider or supplier enrollment moratoria. Title XVIII: creates qualified small employer health reimbursement arrangements, which are arrangements offered by eligible employers that pay or reimburse employees for substantiated medical expenses. Under certain conditions, employers may make contributions up to a specified limit and employees do not owe income tax on the payments and reimbursements.

Jan 6, 2017

Constitutional Authority Statements and the Powers of Congress: An Overview

On January 5, 2011, the House of Representatives adopted an amendment to House Rule XII to require that Members of the House state the constitutional basis for Congress’s power to enact the proposed legislation when introducing a bill or joint resolution. This Constitutional Authority Statement (CAS) rule, found at House Rule XII, clause 7(c), was subsequently adopted in the 113th, 114th, and 115th Congresses. Understanding the CAS rule first requires an understanding of both the powers provided to the Congress under the Constitution and Congress’s role in interpreting the founding document. Article I’s Vesting Clause creates a Congress of specified or “enumerated” powers, and every law Congress enacts must be based on one or more of its powers enumerated in the Constitution. The Constitution creates two central types of limitations on Congress’s powers: (1) internal limits and (2) external limits. Internal limits are the restrictions inherent in the constitutional grants of power themselves, such as the limits on the scope of Congress’s powers under the Commerce Clause. External limits, on the other hand, are the constraints contained in affirmative prohibitions found elsewhere in the text or structure of the document, such as the First Amendment’s prohibition on Congress abridging the freedom of speech. While the Court’s 1803 decision in Marbury v. Madison firmly cemented the judicial branch’s role in interpreting the Constitution by recognizing the power of the Court to strike down legislation as unconstitutional, the early history of the nation is replete with examples of all three government branches playing a substantial role in constitutional interpretation. By the mid-20th century, however, the Supreme Court began articulating a theory of judicial supremacy that became widely accepted, wherein the federal judiciary is the final and exclusive arbiter of the Constitution’s meaning. Nonetheless, in recent decades, a number of legal scholars and government officials have criticized this theory, instead promoting the view that the political branches of government possess the independent and coordinate authority to interpret the Constitution. In support of this view, some point to (1) the Constitution itself requiring all Members of Congress to be bound by an oath to support the Constitution; (2) the presumption of constitutionality that courts afford legislation enacted by Congress; and (3) the wide range of questions the Constitution requires Congress to resolve. A CAS is fundamentally a congressional interpretation of the Constitution, in that House Rule XII requires each Member introducing a piece of legislation to attach a statement which cites the power(s) that allows Congress to enact the legislation. The submitted CAS appears in the Congressional Record and is published on Congress.gov. The House Rules Committee has indicated that Members have significant discretion in determining whether particular CASs comply with the rule. The CAS rule is enforced only insofar as “the House clerk ... acts to verify that each bill has a justification” and “not [in judging] the adequacy of the justification itself.” The most common means of complying with the rule is to cite to a specific clause in Article I, Section 8, such as the Taxing and Spending Clause. The CAS rule has itself been subject to much debate, with proponents arguing that the rule promotes constitutional dialogue in the House, while critics contend that the rule provides minimal benefits and is administratively costly. This report provides an overview of Congress’s powers under the Constitution and Congress’s role in interpreting the nation’s founding document. The report then examines House Rule XII, clause 7(c), discussing the results of a recent study conducted by CRS of CASs that were submitted during the last six months of the 114th Congress. The report concludes by discussing trends with regard to the House’s recent CAS practices and by providing considerations for congressional personnel drafting CASs. The report contains two tables: one that identifies the most commonly cited provisions in recent CASs, and a second that lists suggested constitutional bases for various types of legislation.

Jan 6, 2017

WRDA Legislation in the 114th Congress: Clean Water Act and Infrastructure Financing Provisions in S. 2848 and WIIN

Jan 6, 2017

Security Cooperation Issues: FY2017 NDAA Outcomes

Jan 6, 2017

Border-Adjusted Taxes: A Primer

Jan 6, 2017

FDIC’s Deposit Insurance Assessments and Reserve Ratio

The Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203; Dodd-Frank Act) changed the minimum deposit insurance reserve ratio to 1.35% from 1.15% and required the Federal Deposit Insurance Corporation (FDIC) to meet the increased reserve ratio by 2020. The Dodd-Frank Act also required the FDIC to offset the effects of the higher reserve ratio of 1.35% on banks with assets of less than $10 billion. The FDIC Board of Directors approved a final rule in March 2016 to meet this requirement by 2018. The approved plan changes how the assessments are apportioned between large and small banks. Deposit Insurance Fund Deposit insurance guarantees the repayment of deposits at a bank up to the insured limit ($250,000). It is intended to prevent bank runs and reduce the risk of systemic failure in the banking system. Member banks pay deposit insurance premiums (called assessments) to the FDIC, which maintains the Deposit Insurance Fund (DIF) to meet its obligations of insuring deposits and resolving failed banks. Since the start of federal deposit insurance in 1934, all depositors have been made whole up to their insured limit after a bank failure. The deposit insurance is backed by the full faith and credit of the United States. Although the DIF was funded to its statutory limit before the 2007-2009 financial crisis, it was rapidly depleted by bank failures during the crisis. As shown in Figure 1, the DIF balance was at its lowest at the end of 2009 with a negative balance of $20.9 billion under accrual accounting. To replenish the DIF, the FDIC not only increased the assessment rate (discussed below) but also required banks in December 2009 to prepay the next three years of estimated insurance assessments, a total of $46 billion. The DIF balance has since recovered to $80.7 billion. Assessments fully financed the DIF; taxpayer support was not necessary during the financial crisis. Based on cash basis accounting, the FDIC had sufficient cash-flow to meet its operating needs. Reserve Ratio The deposit insurance reserve ratio reflects the amount of funds held by the DIF as a percentage of insured deposits. Prior to the Dodd-Frank Act, the reserve ratio had a statutory minimum of 1.15% and a ceiling of 1.5% of domestic deposits. The Dodd-Frank Act changed the reserve ratio and how it is computed. Specifically, the Dodd-Frank Act increased the minimum reserve ratio to 1.35% and removed the upper limit. The law also required the FDIC to amend the assessment base to be the average consolidated total assets less average tangible equity, rather than total domestic deposits. The change in the assessment base is intended to allow the FDIC to determine assessment rates that better correlate with the risk profile of a bank. The amount of assessments paid by each bank is determined by multiplying its assessments rate by its assessment base. The range of assessment rates is determined based on the risk category assigned to each bank based on the type of liabilities, size, and activities of the institution, with riskier banks paying a higher assessment rate. According to the FDIC, the change in the assessment model reflects the Dodd-Frank goal of having the assessments better reflect the risks posed by a bank. This goal is accomplished by requiring institutions that pose higher risks to pay higher assessments based on their specific risk profile rather than based on deposits. In December 2010, the FDIC Board of Directors approved a long-term minimum target of 2.0% for the reserve ratio. The FDIC believes that a 2.0% reserve ratio improves the chance that the FDIC could maintain a stable insurance assessment rate and sustain a positive DIF balance even during a serious economic downturn. Figure 1. Deposit Insurance Fund Balance and Reserve Ratio In $Billions / Source: FDIC’s Quarterly Banking Profiles. Notes: All reported figures are as of year-end, except FY 2016 is as of September 30, 2016. Assessment Rates The Dodd-Frank Act required the FDIC to increase the minimum deposit insurance reserve ratio to 1.35% from 1.15%. The Dodd-Frank Act also required the FDIC to have the cost of the transition to the higher ratio be borne by large banks with assets of $10 billion or more once the 1.15% level was reached. The reserve ratio reached 1.15% as of second quarter 2016 and it was at 1.18% as of September 30, 2016. As a consequence of meeting the 1.15% level, the base assessment rate was reduced for all banks. However, the FDIC has begun assessing banks with consolidated assets of more than $10 billion a surcharge assessment of 4.5 basis points (0.045%) to ensure they bear more of the cost to meet the 1.35% reserve ratio by 2018. The surcharge assessment would apply to the assessment base above $10 billion, not to the first $10 billion. Once the 1.35% level is reached, the FDIC expects it will reduce future assessments for small banks by providing offsets. The offsets are intended to compensate small banks for their contribution to increasing the DIF reserve ratio from 1.15% to 1.35%. In the event the reserve ratio does not reach 1.35% by December 31, 2018, the FDIC would impose a shortfall assessment in 2019 on large banks with $10 billion or more. The FDIC’s rationale for the accelerated target date of December 2018, rather than December 2020 as required by the Dodd-Frank Act, is to build the DIF in a timely manner to withstand future economic shocks and to reduce the likelihood of imposing assessments during another downturn. For perspective, there were 5,980 FDIC insured banks as of September 2016, of which 114 banks had assets greater than $10 billion and 5,866 had assets equal to or less than $10 billion.

Jan 6, 2017

Water Infrastructure Improvements for the Nation (WIIN) Act, P.L. 114-322: Drinking Water Provisions

Jan 5, 2017

Major Foreign Aid Initiatives Under the Obama Administration: A Wrap-Up

Over the past few Administrations, Congress has maintained strong interest in and support for the broad global development areas of global health, food security, and climate-related aid and investment. The Obama Administration built its foreign assistance programming around the priorities and practices it identified in the 2010 Presidential Policy Directive (PPD) on Global Development, which identified broad-based economic growth and democratic governance as overarching U.S. development priorities. In particular, the Obama Administration focused on three key initiatives: the Global Health Initiative (GHI), the Global Climate Change Initiative, and the Global Food Security Initiative (Feed the Future). While built on the foundation of existing programs, each initiative was intended to bring new focus, improve coordination, and boost funding to the aid sectors it supported. The initiatives shared several principles, including an emphasis on building host country capacity, investing in innovation and research, using whole-of-government strategies, being results oriented, leveraging global partnerships, and applying a cross-sectoral approach. The Global Health Initiative was launched to improve health outcomes through strengthened health systems and increased and integrated investments in maternal and child health, family planning, nutrition, and infectious diseases. GHI as a distinct platform faded away over the course of the Administration, but progress in global health outcomes that began during the George W. Bush Administration have been largely sustained during the Obama Administration, and the role of multilateral programs was elevated. Some assert that implementation of the initiative was inadequate, but others contend that U.S. global health programs were strong and effective before President Obama took office, and the scaled back emphasis on GHI reflects recognition that little change was needed. Feed the Future aimed to accelerate inclusive growth in the agriculture sector of partner countries and improve nutritional status, particularly of women and girls. Feed the Future is the only original Obama foreign aid initiative specifically authorized in law (the Global Food Security Act of 2016, P.L. 114-195). The law established a specific statutory foundation for global food security assistance, required the President to develop a whole-of-government strategy to promote global food security (released in October 2016), and authorized funding to support the strategy (just over $1 billion per year) for FY2017 and FY2018. The initiative and the legislative support provided by the GFSA have given food security and agricultural development a more prominent role in the U.S. development policy and budget. The Global Climate Change Initiative ramped up U.S. climate-related aid to developing countries, with a focus on promoting clean energy, sustainable landscapes, and climate change resilience and adaptation. While Congress has not always supported GCCI programs and funding, the United States has met its international pledges, and the initiative has reportedly had an impact on U.S. development practice, with USAID now assessing and addressing climate risks and climate change mitigation opportunities in all new country strategies. However, by promoting its climate agenda primarily through executive action, without seeking the approval of Congress, the Obama Administration has made any progress in this area vulnerable to dismantlement. Reported results have been mixed, but the Obama Administration’s global development initiatives sustained efforts from the Bush Administration on global health and climate change and brought new attention to food security and agricultural development. While budget pressures have tamped down growth in the foreign aid budget, the portion of U.S. bilateral development assistance obligated for global health, agricultural development, and environment programs—more than one-third of total economic aid from FY2012 to FY2015—increased under the Obama Administration, continuing a trend that began under the Bush Administration. The incoming Administration and the 115th Congress may examine these initiatives as they consider future U.S. global development policy. Interest in these issues, if not these specific initiatives, can be expected to continue beyond the end of the Obama Administration.

Jan 4, 2017

Overview of Further Continuing Appropriations for FY2017 (H.R. 2028)

This report is an analysis of the provisions in H.R. 2028, which provides further continuing appropriations for FY2017 through April 28, 2017. The measure also included appropriations for the remainder of the fiscal year for Overseas Contingency Operations in the Security Assistance Appropriations Act (Division B). On December 10, 2016, the President signed H.R. 2028 into law (P.L. 114-254). Division A of H.R. 2028 was termed a “continuing resolution” (CR) because it provided temporary authority for federal agencies and programs to continue spending in FY2017 in the same manner as a separately enacted CR. It provides temporary funding for the programs and activities covered by the remaining 11 regular appropriations bills that had not been enacted previously. These provisions provide continuing budget authority for projects and activities funded in FY2016 by that fiscal year’s regular appropriations acts, with some exceptions. Funding under the terms of the CR is effective from enactment on December 10, 2016, through April 28, 2017—a period of 20 weeks. The CR generally provides budget authority for FY2017 for projects and activities at the rate at which they were funded during FY2016. Most projects and activities funded by the CR, however, are also subject to an across-the-board decrease of 0.1901% for the period covered (pursuant to Section 101(2) of Division A). According to the cost estimate prepared by the Congressional Budget Office (CBO), the total amount annualized budget authority for the 11 regular appropriations covered in Division A that are subject to the statutory discretionary spending limits totals to approximately $987,273 million. When spending in the act that is effectively not subject to those limits (Overseas Contingency Operations, disaster relief, emergency requirements and program integrity adjustments) is included in the CBO estimate, the annualized total is $1,083,798 million. In addition to the general provisions that establish the coverage, duration, and rate of spending, CRs usually include provisions that are specific to certain agencies, accounts, or programs. These include provisions that designate exceptions to the formula and purpose for which any referenced funding is extended (referred to as “anomalies”) as well as provisions that have the effect of creating new law or changing existing law (often used to renew expiring provisions of law). The CR includes a number of such provisions, each of which is briefly summarized in this report. CRS appropriations process experts for each of these provisions are listed in Table 1. For information on the first CR for FY2017, see CRS Report R44653, Overview of Continuing Appropriations for FY2017 (H.R. 5325), coordinated by James V. Saturno. For general information on the content of CRs and historical data on CRs enacted between FY1977 and FY2016, see CRS Report R42647, Continuing Resolutions: Overview of Components and Recent Practices, by James V. Saturno and Jessica Tollestrup.

Jan 3, 2017

Global Human Rights: Security Forces Vetting (“Leahy Laws”)

Jan 3, 2017

Temporary Assistance for Needy Families (TANF): Size of the Population Eligible for and Receiving Cash Assistance

The reduction of the number of families with children receiving cash assistance since the mid-1990s is perhaps the signature indicator used to propose that the 1996 welfare reform law was successful in reducing welfare dependency. The law ended the cash assistance program for needy families with children, Aid to Families with Dependent Children (AFDC), and replaced it with the Temporary Assistance for Needy Families (TANF) block grant. TANF is a broad-based block grant that helps fund state cash assistance programs for needy families with children, but it also funds a wide range of benefits and services addressing both the effects and root causes of child poverty. The cash assistance caseload declined particularly rapidly in the years immediately following enactment of the 1996 welfare reform law. In 1995, an estimated 17.6 million people received AFDC cash at some time during the year; by 2000, the number of people receiving cash assistance had declined to 7.9 million. The period from 1995 to 2000 also saw declines in child poverty and increased work among single mothers (who had headed most AFDC families). Following 2000, child poverty increased and work among single mothers declined somewhat. However, the cash assistance caseload continued to decline, reaching 5.7 million people in 2007 and increasing only slightly in response to the recent recession to 5.8 million people in 2012. The decline in the cash assistance caseload generally resulted from fewer eligible people taking up TANF benefits. In 1995, 82% of those eligible for AFDC received assistance. The share of those eligible for TANF who received it fell to 47% in 2000, 34% in 2007, and 28% in 2012. While there were almost 12 million fewer individuals who received TANF in 2012 than received AFDC in 1995, the size of the population estimated as eligible to receive TANF in 2012 was 1.4 million persons lower than the population eligible for AFDC in 1995 (20.2 million versus 21.6 million). Most of those eligible but not receiving AFDC or TANF were poor, with some in deep poverty (family incomes less than half the poverty threshold). Over the 1995 to 2012 period, an increasing number of adults who failed to take up benefits were non-workers and had no other workers in their families. The decline in the share of people eligible for cash assistance also meant that TANF had a smaller impact in ameliorating poverty—particularly among children in deep poverty—than did AFDC. In 2012, there were 3.1 million children in deep poverty that met TANF eligibility criteria but did not receive TANF assistance. The comparable number of children in deep poverty eligible for but not receiving AFDC in 1995 was 0.5 million. In 2012, TANF reduced the rate of deep poverty among children from 9.5% to 8.4%. In 1995, AFDC reduced the rate of deep poverty among children from 11.3% to 6.5%. This analysis raises several policy questions, the key one being whether caseload reduction per se is an indicator of the success of welfare reform. The drafters of the 1996 welfare reform law wanted TANF to be “temporary and provisional.” However, TANF assistance was increasingly forgone or otherwise not received by those eligible for it, even amongst the poorest of families. While low-income families receive other government benefits such as food assistance and (if they have earners) refundable tax credits, these benefits do not provide ongoing cash assistance to meet basic needs. TANF has a number of structural features that give states the incentive to have policies that seek to reduce caseloads. For example, its “work participation standards” can be met partially or wholly through caseload reduction rather than through engaging recipients in work or activities. TANF could be altered to lessen some of the incentives that states have to reduce caseloads. Policymakers might also look outside of TANF, to altering some existing programs or providing different forms of aid to provide ongoing support for needy families with children.

Jan 3, 2017

The Role of State Approving Agencies in the Administration of GI Bill Benefits

State Approving Agencies (SAAs) play an important role in the administration of GI Bill® benefits. GI Bill benefits provide educational assistance payments to eligible veterans and servicemembers and their families enrolled in approved programs of education. The SAA role is intended to ensure that veterans and other GI Bill participants have access to a range of high-quality education and training programs at which to use their GI Bill benefits. In FY2017, the Department of Veterans’ Affairs (VA) is estimated to distribute over $14 billion in GI Bill benefits to over 1 million eligible participants. Statutory provisions provide for the establishment of SAAs and describe their role in administering GI Bill benefits. Each state is “requested” to create or designate a state department or agency as its SAA. The VA contracts (or enters into agreement) with each SAA annually to provide approval, oversight, training, and outreach activities by qualified personnel as specified in the contract to ensure the quality of programs of education and proper administration of GI Bill benefits. The VA oversees the processes for approving and reviewing approved programs of education, educating the entities and individuals involved in GI Bill claims processing, and increasing awareness among potential GI Bill participants. The VA and any other federal entity or individual is prohibited from exercising any supervision or control over SAAs except as specifically provided in statutory provisions. For example, 38 U.S.C. §3674 requires the VA take into consideration an annual evaluation of each SAA’s performance on its contractual standards when negotiating a new contract. One of the key SAA roles is to initially approve programs of education for GI Bill purposes. Each sponsoring facility (e.g., educational institutions and training establishments) must submit an application to its SAA. Approval is intended to ensure that each program of education and sponsoring facility meets all applicable statutory and regulatory requirements, including proper benefit administration and program of education quality. The approval process and requirements vary depending on the program’s educational objective (e.g., non-college degree or flight training) and existing government oversight. For example, some programs that are approved by other government programs or processes are “deemed approved” and require a less in-depth review. The remaining programs undergo more comprehensive approval processes that may include the SAA reviewing institutional policies, staff qualifications, and academic curriculum. The SAA may conduct a site visit. Once the SAA completes the initial approval review in accordance with the approval standards, the SAA issues an approval or disapproval letter to the facility. The VA maintains the compiled list of all approved programs of education. Another key SAA role is to conduct compliance surveys. Compliance surveys are designed to ensure that the facility and approved programs are in compliance with all applicable statutory, regulatory, and policy provisions and the facility understands the provisions. Statutory provisions establish the number of institutions requiring annual compliance surveys. The VA conducts compliance surveys but also assigns some of the required compliance surveys to SAAs. During the onsite compliance survey visit, the SAA reviews student files to verify that GI Bill payments have been made properly, conducts student interviews, verifies institutional operations, and reviews additional documents and areas as outlined on the compliance survey checklist. Discrepancies uncovered during the compliance survey may be resolved immediately, may result in the creation of a GI Bill debt or payment, or may result in the suspension or disapproval of a program of education. The SAA may suspend a program of education from new enrollments for up to 60 days while the SAA provides assistance to help the facility resolve the issue. The SAA may disapprove the program of education such that no GI Bill payments may be made based on an individual’s pursuit of the program of education.

Dec 29, 2016

Political Status of Puerto Rico: Brief Background and Recent Developments for Congress

Puerto Rico lies approximately 1,000 miles southeast of Miami and 1,500 miles from Washington, DC. Despite being far outside the continental United States, the island has played a significant role in American politics and policy since the United States acquired Puerto Rico from Spain in 1898. Puerto Rico’s political status—a term of art referring to the relationship between the federal government and a territorial one—is an undercurrent in virtually every policy matter on the island. Even in seemingly unrelated federal policy debates, Puerto Rico status often arises at least tangentially. In the foreseeable future, oversight of Puerto Rico is likely to be relevant for Congress as the House and Senate monitor the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA; P.L. 114-187) enacted during the 114th Congress. Status also shaped the policy context surrounding the U.S. Supreme Court’s decision in the 2016 Sanchez Valle case. This report does not provide an economic or legal analysis of these topics; instead, it provides policy and historical background for understanding status and its current relevance for Congress. In 2016, Puerto Rico voters elected a Governor, Resident Commissioner, and majorities in the territorial legislature affiliated with the pro-statehood New Progressive Party (NPP). This choice represents a departure from the previous four years. Consequently, if the 115th Congress chooses to reexamine the island’s relationship with the United States, the House and Senate could encounter more agreement among the island’s political leaders than in the recent past. Congress has not enacted any recent legislation devoted specifically to status. In the 114th Congress, H.R. 727, which did not advance beyond introduction, would have authorized a plebiscite (popular vote) on the statehood question. Puerto Rican voters most recently reconsidered their status through a 2012 plebiscite. On that occasion, a majority chose a change in the status quo through statehood, although interpreting the results has been controversial. If Congress chose to alter Puerto Rico’s political status, it could do so through statute. Ultimately, the Territory Clause of the U.S. Constitution grants Congress broad discretion over Puerto Rico and other territories. This report will be updated in the event of significant legislative or status developments.

Dec 28, 2016

The 21st Century Cures Act (Division A of P.L. 114-255)

The 21st Century Cures Act (P.L. 114-255) was signed into law on December 13, 2016, by President Barack Obama. On November 30, 2016, the House passed the House amendment to the Senate amendment to H.R. 34, the 21st Century Cures Act, on a vote of 392 to 26. The bill was then sent to the Senate where it was considered and passed, with only minor technical modification, on December 7, 2016, on a vote of 94 to 5. The law consists of three divisions: Division A—21st Century Cures Act; Division B—Helping Families in Mental Health Crisis; and Division C—Increasing Choice, Access, and Quality in Health Care for Americans. CRS has published a series of reports on this law, one on each Division. This is the report for Division A of the law. This report provides a brief summary of each provision of the 21st Century Cures Act (Division A of P.L. 114-255), by title, subtitle, and section. The Division includes five titles, as follows: (1) Innovation projects and state responses to opioid abuse; (2) Discovery; (3) Development; (4) Delivery; and (5) Savings. Title I provides funding for biomedical research, including the Precision Medicine Initiative (PMI) and the Cancer Moonshot Initiative, for the opioid crisis response, and for the Food and Drug Administration (FDA) to support certain new activities authorized by the law. Title II, consisting of seven subtitles, requires or authorizes a number of activities to support biomedical research, including the reauthorization of the National Institutes of Health (NIH) and the reform of that agency through numerous administrative, reporting, and data access provisions. The Title includes provisions that support young investigators funded by NIH; pediatric research; collaborative research such as research on neurological disease; and precision medicine efforts, and specifically the PMI. Title III, consisting of ten subtitles, focuses on modifying the drug and device approval pathways at the FDA to support innovation, and specifically includes provisions that support patient-focused drug development and streamlined and clarified pathways to approval for drugs, combination products, antimicrobials, Orphan drugs, drugs for rare disease, and regenerative therapies. This Title also contains provisions making modifications to the medical device approval pathway and reforms to the FDA’s hiring process. Finally, it addresses FDA’s regulation of medical countermeasure and vaccine development. Title IV focuses on health care delivery, and includes provisions that together address the federal policies to promote the adoption and use of electronic health record (EHR) technology, as well as a handful of Medicare delivery provisions addressing telehealth services in Medicare, site-of-service price transparency for certain Medicare services, Local Coverage Determinations (LCDs) under Medicare, and a technology and pharmaceutical ombudsman for Medicare. Title V provides savings for the Division, and includes Medicare and Medicaid savings; Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) savings, including Prevention and Public Health Fund (PPHF) and territory funding; and savings from the Strategic Petroleum Reserve (SPR) drawdown.

Dec 23, 2016

U.S. Economy in a Global Context

Dec 23, 2016

The Arms Trade Treaty

Dec 23, 2016

The Helping Families in Mental Health Crisis Reform Act of 2016 (Division B of P.L. 114-255)

This report summarizes the Helping Families in Mental Health Crisis Reform Act of 2016, enacted on December 13, 2016, as Division B of the 21st Century Cures Act (P.L. 114-255). Division B comprises Title VI through Title XIV. The first five titles in Division B (Title VI – Title X) deal primarily with the Substance Abuse and Mental Health Services Administration (SAMHSA) within the Department of Health and Human Services (HHS). SAMHSA is the federal agency with primary responsibility for increasing access to community-based services to prevent and treat mental disorders and substance use disorders. The next four titles in Division B (Title XI – Title XIV) deal with confidentiality of patient records, Medicaid, mental health parity, and criminal justice programs. Title VI “Strengthening Leadership and Accountability” Within Title VI, Subtitle A makes changes to HHS and SAMHSA’s leadership, structure, and responsibilities. Subtitle B creates new planning and evaluation requirements, changes reporting and accounting requirements for state-designated protection and advocacy systems, and requires a Government Accountability Office (GAO) report on programs funded by SAMHSA’s Protection and Advocacy for Individuals with Mental Illness grants. Subtitle C requires the HHS Secretary to establish an Interdepartmental Serious Mental Illness Coordinating Committee. Title VII “Ensuring Mental and Substance Use Disorders Prevention, Treatment, and Recovery Programs Keep Pace with Science and Technology” Title VII establishes within SAMHSA a “National Mental Health Policy Laboratory,” codifies SAMHSA’s existing National Registry of Evidence-based Programs and Practices (which was not previously explicitly authorized in statute), and authorizes appropriations for SAMHSA’s Programs of Regional and National Significance (for which authorizations of appropriations had expired). Title VIII “Supporting State Prevention Activities and Responses to Mental Health and Substance Use Disorder Needs” Title VIII focuses on SAMHSA’s two biggest programs: the Community Mental Health Services Block Grant (MHBG, $533 million in FY2016) and the Substance Abuse Prevention and Treatment Block Grant (SABG, $1.9 billion in FY2016). It makes various changes—some increasing flexibility, some imposing additional requirements, and some codifying current practice. It also requires a study on the formulas for distributing MHBG and SABG funds. Title IX “Promoting Access to Mental Health and Substance Use Disorder Care” Within Title IX, Subtitle A reauthorizes and modifies various programs and activities (most of which are administered by SAMHSA), codifies existing SAMHSA-administered programs and activities, authorizes new SAMHSA-administered programs and activities, and repeals statutory authorities for programs that have never been funded. Subtitle B focuses on the mental health and substance use disorder workforce—authorizing, reauthorizing, or amending several programs and activities, most of which are administered by the Health Resources and Services Administration (HRSA) within HHS. Subtitle C authorizes or reauthorizes SAMHSA-administered programs and activities focused on mental health on college campuses. Title X “Strengthening Mental and Substance Use Disorder Care for Children and Adolescents” Title X focuses on expanding access to community mental and behavioral health services for youth. It reauthorizes and modifies several SAMHSA-administered programs and activities. It also establishes several new grant programs. Title XI “Compassionate Communication on HIPAA” Title XI focuses on confidentiality of patient records and the circumstances under which health care providers (and other entities) may communicate with family members, caregivers, and law enforcement about individuals seeking or receiving treatment for mental disorders or substance use disorders. It requires dissemination of model programs for training health care providers, lawyers, and patients and their families on permitted disclosures. Title XII “Medicaid Mental Health Coverage” Title XII focuses on Medicaid. It includes a rule of construction related to same-day services. It requires studies and reports related to Medicaid managed care regulation and (separately) Medicaid’s Emergency Psychiatric Demonstration Project. It requires a letter from the Centers for Medicaid & Medicare Services to State Medicaid Directors regarding opportunities for innovation under the Social Security Act (SSA) Section 1115 waiver authority. It requires the use of an electronic visit verification system for personal care services and home health care services under Medicaid. Title XIII “Mental Health Parity” Title XIII focuses on mental health parity and (separately) eating disorders, as well as the application of parity to eating disorder benefits. It amends federal parity law to include provisions aimed at improving compliance and requires a GAO report on compliance. It authorizes activities to educate the public and health professionals about eating disorders. Title XIV “Mental Health and Safe Communities” Title XIV amends the authorizing legislation for several Department of Justice (DOJ) programs and one Department of Homeland Security (DHS) grant program. Broadly, the amendments made by Subtitle A expand the scope of these programs to allow funds to be used to assist people with mental illness, substance use problems, or co-occurring substance abuse and mental health issues. Subtitle B makes several changes to the Justice and Mental Health Collaboration program. The amendments largely expand the scope of the program, so grants may be used for additional purposes to help respond to people involved in the criminal justice system who have substance abuse, mental health, or co-occurring disorders.

Dec 22, 2016

Defining “Specialty Crops”: A Fact Sheet

“Specialty crops” refer to “fruits and vegetables, tree nuts, dried fruits, horticulture, and nursery crops (including floriculture)” as defined in statute by the Specialty Crops Competitiveness Act of 2004, as amended (P.L. 108-465, 7 U.S.C. 1621 note). The statutory definition of specialty crops ties to program eligibility and funding allocations for a number of U.S. Department of Agriculture (USDA) programs providing marketing and research assistance to eligible producer groups. USDA’s list of eligible and ineligible products under the statutory definition is not intended to be all inclusive, but rather to provide examples of the most common specialty crops.

Dec 22, 2016