CRS Reports

Department of Homeland Security Preparedness Grants: A Summary and Issues

Following the September 11, 2001, terrorist attacks, Congress increased focus on state and local homeland security assistance by, among other things, establishing the Department of Homeland Security (DHS) and authorizing DHS to administer federal homeland security grant programs. These homeland security grants have been administered by numerous DHS entities, and these grants have focused on such preparedness activities as assistance to states and localities to prepare and respond to terrorist attacks, securing critical infrastructure such as rail and ports, securing nonprofit (nongovernmental) organizations, and securing high-threat and high-risk urban areas. If homeland security continues to be of national interest, how homeland security assistance is funded, administered, and allocated will be of importance to Congress. Since Congress would continue to conduct oversight and legislate on homeland security assistance to states and localities, Members may elect to consider policy options that anticipate, as well as react to, future catastrophes. Throughout the past 15 years, there has been a continued discussion on the number and purpose of the grant programs, state and locality use of grant program funding, and the funding amounts annually appropriated to the grant programs. All of these issues identify a potential need for Congress to continue its debate and consider legislation related to federal homeland security assistance for states and localities and the nation’s overall emergency preparedness. One major issue remains, and is comprised of these other issues, and that is whether or not these grants are effective in assisting states and localities in meeting the national preparedness goals.

Oct 28, 2016

The Social Security Retirement Age

The full retirement age (FRA) is the age at which workers can claim full Social Security retired worker benefits. The size of the monthly benefits is affected by when the worker claims benefits. The worker’s age when claiming benefits is compared with the FRA, and adjustments are made depending on the number of months before or after the FRA the worker claims benefits. Adjustments for claiming before or after the FRA are intended to result in similar total lifetime benefits, regardless of when the worker claims benefits: retiring before the FRA results in a reduction in monthly benefits (to take into account the longer expected period of benefit receipt) and retiring after the FRA results in an increase in monthly benefits (to take into account the shorter expected period of benefit receipt. The FRA was 65 at the inception of Social Security, but has been gradually increased upwards, to 67 for those born in 1960 or later. Claiming benefits past age 70 does not increase the monthly benefits. The earliest age retired worker beneficiaries may begin receiving benefits is called the early eligibility age (EEA). The current EEA is 62 for retired workers and their spouses; retirement benefits cannot be claimed by workers or spouses prior to 62. Although workers cannot receive retirement benefits prior to the EEA, dependents could be eligible for benefits earlier than age 62 under certain circumstances. In 2015, approximately 40% of new retired worker beneficiaries claimed benefits at age 62. More than half of beneficiaries who claimed retired worker benefits in 2015 claimed before the FRA.

Oct 28, 2016

Video Broadcasting of Congressional Proceedings

Video broadcasts enable constituents, policy professionals, and other interested individuals to see Congress at work, learn about specific Members, and follow the legislative process. Members of Congress have always considered communication with constituents an essential part of their representational duties. Members also often utilize new tools and technologies to reach and engage their constituents and colleagues. Background The Legislative Reorganization Act of 1970 first enabled congressional committees to broadcast their proceedings, if desired. Separate decisions were then made by the House and the Senate in 1977 and 1986, respectively, to provide audio and video broadcasts of chamber proceedings. Congressional video and audio feeds are operated by the House and Senate but are available for any credentialed press gallery member to broadcast. Many Americans are familiar with these feeds in video format, as the primary content on the privately operated, nonprofit Cable-Satellite Public Affairs Network (C-SPAN). C-SPAN launched a dedicated television channel for House proceedings in 1979 and another for Senate proceedings in 1986, and it continues to be key information resources for Congress and the public. Live broadcasts provided real-time information about Congress to anyone outside of the Capitol. Previously, only credentialed press or members of the public seated in the galleries were able to see floor proceedings as they occurred. In addition to augmenting the legislative information available to the public, these broadcasts arguably were also of value to Congress. Broadcasts diminished the need to wait for transcripts or a reporter’s account of events. Members and congressional staff could follow a variety of live proceedings from their offices or elsewhere. Key Issues Technological advancements over the last decade have presented new considerations for congressional video broadcasting. The House and Senate video feeds and C-SPAN all originated in an era when television was the presumed source for video-based news, and the ability to record or transmit video required specialized equipment. As the Internet became an influential medium, the House, Senate, and C-SPAN each adjusted and began to provide online access to live video streams and past recordings. These online videos expand the potential reach of congressional video, as cable television subscriptions are no longer required to watch Congress in action. The House and Senate continue to maintain exclusive control over their video and audio feeds, whether they are broadcast on television, radio, or over the Internet. Yet technology now exists enabling anyone with a smartphone to produce and broadcast an online video. This creates a greater potential for unauthorized videos to be broadcast from the House and Senate chambers. Some believe that these videos may disrupt decorum in Congress, while others view them as an essential alternate means of distributing congressional information. In light of these new technological capabilities, the use and regulation of wireless devices or broadcasting from the chambers may be reexamined.

Oct 28, 2016

The Temporary Assistance for Needy Families (TANF) Block Grant: A Legislative History

The Temporary Assistance for Needy Families (TANF) block grant was created in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193). It was born out of the welfare reform debates that spanned four decades, from the 1960s through the 1990s. These debates focused on the Aid to Families with Dependent Children (AFDC) program, which provided federal funding for state-run programs delivering assistance to needy families with children, with most families receiving assistance historically being headed by single mothers who were not working. The welfare reform debates focused on whether and how much single mothers should be expected to work, and whether the program itself contributed to dependency by providing disincentives to work and raise children in two-parent families. In 1992, then-candidate Bill Clinton promised to “end welfare as we know it.” President Clinton submitted his welfare reform proposal to Congress in June 1994, but Congress did not take any action on it. A welfare reform proposal was included in the House Republican “Contract with America” document during the 1994 congressional campaign. This proposal would have altered, but not replaced, AFDC. Immediately after the 1994 congressional campaign, with Republicans taking control of both the House and the Senate, the new House leadership and Republican governors crafted a proposal to end AFDC and replace it with the TANF block grant. This proposal passed Congress as part of two separate pieces of legislation in 1995, but President Clinton vetoed both. In 1996, a revised proposal was offered and passed Congress. On August 22, 1996, President Clinton signed the 1996 welfare reform bill that ended AFDC and replaced it with TANF, a broad-purpose block grant to the states that helps fund a wide range of benefits, services, and activities to address the effects of, and root causes of, child poverty and economic disadvantage. Reflecting its origins in the welfare reform debates, most TANF policy revolves around the state programs of cash assistance and work programs that the block grant helps fund. Most TANF policies in effect in 2016 date back to the 1996 welfare reform law. The original funding provided in that law for TANF expired at the end of FY2002 (September 30, 2002), and most of the legislative activity since then has been to continue funding on a short-term basis. There was one long-term extension of TANF funding—The Deficit Reduction Act of 2005 (DRA, P.L. 109-171)—which extended it from FY2006 through the end of FY2010. From FY2002 to FY2006, and after the end of FY2010, TANF has been funded on a short-term basis. The amount each state receives in its basic TANF block grant was the same in FY2016 as it was in FY1997. There have been no adjustments to the basic block grant since then for changes in circumstances, such as inflation, the size of the cash assistance caseload, the size of the poverty population, or other relevant factors. The DRA made some changes to TANF work rules and established a program of competitive grants mostly to community-based organizations for healthy marriage and responsible fatherhood initiatives. Legislation enacted in 2012 required states to have a plan to prevent TANF cash from being withdrawn in certain establishments: strip clubs, casinos, and liquor stores.

Oct 27, 2016

DHS Appropriations FY2017: Security, Enforcement, and Investigations

This report is part of a suite of reports that discuss appropriations for the Department of Homeland Security (DHS) for FY2017. It specifically discusses appropriations for the components of DHS included in the second title of the homeland security appropriations bill—Customs and Border Protection, Immigration and Customs Enforcement, the Transportation Security Administration, the U.S. Coast Guard, and the U.S. Secret Service. Collectively, Congress has labeled these components in recent years as “Security, Enforcement, and Investigations.” The report provides an overview of the Administration’s FY2017 request for these components, and the appropriations proposed by the Senate and House appropriations committees in response. Rather than limiting the scope of its review to the first titles of the bills, the report includes information on provisions throughout the bills and reports that directly affect these components. Security, Enforcement, and Investigations is the largest of the four titles that carry the bulk of the funding in the bill. The Administration requested $32.27 billion for these components in FY2017, $797 million less than was provided for FY2016. The amount requested for these components is 68% of the Administration’s $47.7 billion request in net discretionary budget authority and disaster relief funding for DHS. The largest budget increase proposed in the request for these components was a $625 million (5.7%) increase for U.S. Customs and Border Protection, while the largest budget decrease proposed was a $745 million (15.3%) reduction in the budget for the Transportation Security Administration, which was proposed to be replaced with an $880 million increase in fee collections. Senate Appropriations Committee-reported S. 3001 would provide the components included in this title $32.92 billion in net discretionary budget authority. This would be $652 million (2.0%) more than requested, but $145 million (0.4%) less than was provided in FY2016. House Appropriations Committee-reported H.R. 5634 would provide the components included in this title $32.85 billion in net discretionary budget authority. This would be $592 million (1.8%) more than requested, but $206 million (0.6%) less than was provided in FY2016. Additional information on the broader subject of FY2017 funding for the department can be found in CRS Report R44621, Department of Homeland Security Appropriations: FY2017, as well as links to analytical overviews and details regarding appropriations for other components. On September 29, 2016, the President signed into law P.L. 114-223, which contained a continuing resolution that funds the government at the same rate of operations as FY2016, minus 0.496% through December 9, 2017. For details on the continuing resolution and its impact on DHS, see CRS Report R44621, Department of Homeland Security Appropriations: FY2017, which also includes additional information on the broader subject of FY2017 funding for DHS as well as links to analytical overviews and details regarding components in other titles. This report will be updated once the annual appropriations process for DHS for FY2017 is concluded.

Oct 27, 2016

The Great Lakes-St. Lawrence Seaway Navigation System: Options for Growth

Congress faces infrastructure funding decisions that would support shipping on the Great Lakes and St. Lawrence Seaway (GLSLS). In the Water Resources Development Act of 2016 (H.R. 5303, S. 2848), Congress may decide whether to permanently allocate 10% of certain harbor maintenance funds both to small ports and to Great Lakes ports. On the horizon are debates over construction of a second lock at Sault Ste. Marie, MI, and a second Great Lakes heavy icebreaker vessel. These projects would likely cost several hundred million dollars and take several years to complete. These funding decisions come at a time when the GLSLS’s traffic base is eroding. There are reasons to think this trend will continue. It is largely the result of technological changes in manufacturing and transportation, as well as the globalization of production—factors unrelated to Great Lakes infrastructure funding: Most steel is now manufactured from scrap metal, which is moved by truck and railroad, rather than from iron ore shipped by vessel in the Great Lakes region. Dedicated single-cargo “unit” trains have helped the railroads compete with vessels in carrying dry bulk goods such as grain and coal. Shippers of high-value goods (including containerized cargo) are deterred from using the GLSLS by winter closure and locks that slow transit. Export demand for North American grain now comes mainly from Asia. The grain moves to Pacific or Gulf Coast ports rather than through the GLSLS. The boom in domestic production of unconventional oil and gas has increased demand for vessel transport on certain U.S. waterways, but the GLSLS has been unaffected. These developments are major obstacles to efforts by the St. Lawrence Seaway Development Corporation, the U.S. government agency that shares responsibility for administering the seaway, to increase traffic on the GLSLS system. Operation and maintenance of the system’s locks and the dredging necessary to maintain the mandated 27-foot channel depth at Great Lakes ports are funded from the Harbor Maintenance Tax, which is predominantly paid by shippers using coastal ports, not Great Lakes ports. Coastal ports, especially those experiencing steady increases in cargo volume, wish to retain more of the cargo taxes they generate for their own infrastructure needs, raising questions about the future source of federal support for the GLSLS. Congress could return to funding the GLSLS system with lock tolls instead of annual appropriations as was the case prior to 1986, but Congress expressed no interest when this was last proposed in 2006. It is too early to tell whether public-private partnership provisions enacted in the Water Resources Reform and Development Act of 2014 might be pursued with respect to the GLSLS. The most promising strategy for attracting shippers to the GLSLS is to reduce users’ costs relative to the costs of shipping by truck, rail, or pipeline.

Oct 26, 2016

The Federal Minimum Wage: Indexation

In 1938, the Fair Labor Standards Act (FLSA) established a federal minimum wage of $0.25 per hour. The minimum wage provisions of the FLSA have been amended numerous times since then, typically for the purpose of expanding coverage or raising the wage rate. Since its establishment, the minimum wage rate has been raised 22 separate times, most recently in 2007-2009 when it was increased from $5.15 per hour to its current rate of $7.25 per hour in three steps. The federal minimum wage changes only when Congress amends the FLSA. Since 1938, Congress has amended the FLSA to raise the minimum wage 10 times for a total of 22 rate increases, with periods between increases ranging from 1 to 10 years. An alternative to periodically amending the FLSA to increase the minimum wage would be to index, or link, the federal minimum wage to another variable so that the minimum wage changes automatically when the other variable changes. Indexing the minimum wage provides regular adjustments to and reduces the volatility of minimum wage rates, maintains the relative value of the minimum wage to other economic indicators (e.g., prices), and decouples rate changes from other policy considerations. On the other hand, indexation may also reduce regular oversight of minimum wage changes because it automatically adjusts the rate and changes one part of the FLSA while leaving other parts of the act unchanged subject to congressional action. Although Congress has considered indexing the federal minimum wage at various points, it has not done so. The most common proposed indices for the minimum wage include different versions of the Consumer Price Index, personal consumption expenditures, employment costs, and hourly earnings. Based on a review of seven possible indices and a simulation of federal minimum wage rates under different indices, the minimum wage in 2016 would have been highest had it been indexed to average hourly earnings and lowest had it been indexed to personal consumption expenditures. Linking the value of the federal minimum wage to consumer prices would have generally resulted in minimum wages higher than the current rate, depending on the starting point. Currently, 17 states and the District of Columbia index (or have enacted laws that will in the future) their state minimum wages to some economic measure. In addition, indexation is used in some federal entitlement programs, such as Social Security and Supplemental Nutrition Assistance Program (SNAP) benefits, as well as in other federal wage regulations, such as the minimum wage for employees on certain federal contracts. Most of the numerous proposals in recent Congresses to increase the minimum wage would combine a series of nominal rate increases, followed by indexation to a consumer price index.

Oct 26, 2016

Health Care-Related Expiring Provisions of the 115th Congress, First Session

This report provides descriptions of selected health care-related provisions that are scheduled to expire during the 115th Congress, first session (i.e., during calendar year [CY] 2017). For purposes of this report, expiring provisions are defined as portions of law that are time limited and will lapse once a statutory deadline is reached absent further legislative action. The expiring provisions included in this report are those related to Medicare, Medicaid, State Children’s Health Insurance Program (CHIP), and private health insurance programs and activities. The report also includes other health care-related provisions that were last extended under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10). Additionally, this report describes health care-related provisions within the same scope that have expired or are scheduled to expire during the 114th Congress, second session (i.e., during CY2016). Although the Congressional Research Service (CRS) has attempted to be comprehensive, it cannot guarantee that every relevant provision is included here. This report generally focuses on two types of health care-related provisions within the scope discussed above. The first type of provision provides or controls mandatory spending, meaning that it provides temporary funding, temporary increases or decreases in funding (e.g., Medicare provider bonus payments), or temporary special protections that may result in changes in funding levels (e.g., Medicare funding provisions that establish a floor). The second type of provision defines the authority of government agencies or other entities to act, usually by authorizing a policy, project, or activity. Such provisions also may temporarily delay the implementation of a regulation, requirement, or deadline, or establish a moratorium on a particular activity. Expiring health care provisions that are predominantly associated with discretionary spending activities—such as discretionary authorizations of appropriations and authorities for discretionary user fees—are excluded from this report. Certain types of provisions with expiration dates that otherwise would meet the criteria set forth above are excluded from this report. Some of these provisions are excluded because they are transitional or routine in nature or have been superseded by congressional action that otherwise modifies the intent of the expiring provision. For example, statutorily required Medicare payment rate reductions and payment rate re-basings that are implemented over a specified time period are not considered to require the attention of Congress and are excluded. Demonstration projects and pilot programs also are excluded. The report provides tables that list the relevant provisions that are scheduled to expire in 2017 and that have expired or are scheduled to expire in 2016. The report then describes each listed provision, including a legislative history.

Oct 26, 2016

Effects of Lower Oil Prices

Oct 26, 2016

Did a Thermostat Break the Internet?

On September 20, 2016, the computer security blog KrebsonSecurity (Krebs) was hit with a massive attack —one that surpassed the scale of previously known attacks. One month later, on October 21, 2016, domain name system provider Dyn experienced a similar attack which prevented many users in the United States from accessing popular websites, such as Amazon, Reddit and Twitter. Both these attacks have in common a malicious botnet named Mirai. Botnets and Denial of Service Attacks A botnet is a network of computers or other Internet-connected devices that an attacker has infected with malware that grants them control and use of the resources of that device (e.g., the processing power, network access, microphone and camera, etc.). A single device in that network is called a bot.’ Adversaries may use botnets they cultivate for their own purposes, or they may rent out their botnets for other attackers to use, such as to carry out a denial of service (DOS) attack, like those which hit Krebs and Dyn. A DOS attack is an attack against the availability of data. In this attack, an attacker overloads a network or website with information, monopolizing the bandwidth of that site and making it so that legitimate users cannot get their requests for service through, resulting in the user experiencing the site as down. A DOS attack itself does not constitute an intrusion into the network or website, but it may be combined with other forms of attack to compromise the confidentiality or integrity of the network or its data. A distributed denial of service attack (DDOS) occurs when many, disparate devices are used in the attack, as is the case when a botnet is employed for a DOS attack. In some ways, DOS attacks are like heavy storms that overload gutters. As more rainwater falls into the gutter system than it can handle, water backs up, unable to flow through until the rain lets up. The Internet of Things Ganged Up The Mirai botnet is unique because it takes advantage of Internet of Things (IOT) devices. In this case, many of those devices were web-enabled cameras and digital video recorders (DVRs) with published and unchanged administrative usernames and passwords. Some of these devices were sold directly to consumers, while others were components sold to other companies who incorporated those parts into their products. The Mirai botnet scanned the Internet for these devices, and when it encountered one, it used the known credentials to gain access to the device and reprogram it to execute commands from botnet servers. Many of the devices used in Mirai-based DOS attacks had predominantly Asian internet protocol (IP) addresses. Internet of Things Risk DOS attacks happen frequently, but network administrators have ways of mitigating those attacks so that users do not experience degradation in service. The use of IOT devices in a DOS attack is significant because it dramatically increases the capacity of attack beyond what was previously observed and beyond what network administrators have had to mitigate. For instance, the content delivery network Akamai, which provided services to Krebs when that site was attacked, had previously seen attacks peak at around 320 gigabits per second (gbps). However, the attack against Krebs peaked at over 620 gbps—doubling their previous record. Authoritative numbers for the size of the Dyn attack are not publicly available. These attacks highlight some risks with IOT devices. Many of those devices are relatively inexpensive, are connected to the Internet without security measures in place, are rarely updated to fix vulnerabilities, and linger on the Internet as long as users find the device itself useful—making them susceptible to attack and use in botnets. In addition to risks with the IOT devices themselves, their use presents policy challenges such as shifts in expectations in privacy from the information they collect, the lack of security and other standards for them, and unexplored responsibilities for liability for IOT devices in a global economy. As consumers deploy IOT devices for their benefits, such as safety, efficiency and improved user experience, the common infrastructure everyone uses for network access may experience increased attacks from infected IOT devices. These types of attacks may compromise the very core of the Internet and jeopardize interstate commerce and national security. Policy Implications U.S. government agencies have started to take steps to address risks with IOT devices. The FTC issued a report that encourages companies to apply cybersecurity best practices to their IOT devices: such as building security into devices on the onset, employing multiple defensive strategies, and monitoring them throughout their expected life cycles, including providing continual security updates as needed. The DOT has issued guidance on autonomous vehicles. HHS has engaged partners in a Health Care Industry Cybersecurity Task Force which, among other things, will inform ways to secure medical devices. IOT issues, including security, have received attention in the 114th Congress and may be of interest to the 115th as well. House and Senate resolutions have called for a national strategy. House and Senate bills would require the Secretary of Commerce to convene a federal working group to report recommendations to Congress on facilitating IOT development, including consideration of security and privacy issues, among others. Both the House and the Senate have held hearings on the IOT, addressing a range of issues, including its ramifications for security, privacy, and the integrity of the Internet. In response to the attack on Dyn, Senator Mark Warner asked federal agencies to examine the tools available to secure IOT devices and what additional tools might be needed. Additionally, congressional committees, as part of their oversight activities, may engage with federal agencies as they pursue rulemaking and issuing guidance on IOT devices. Congress could also encourage industry to ensure it adequately considers security needs in manufacturing and deployment of IOT devices in a manner that not only considers consumer needs but also security of the Internet. Congress could also work to further define roles and responsibilities and acceptable actions for security of the Internet.

Oct 26, 2016

Unemployment and Inflation: Implications for Policymaking

The unemployment rate is a vital measure of economic performance. A falling unemployment rate generally occurs alongside rising gross domestic product (GDP), higher wages, and higher industrial production. The government can generally achieve a lower unemployment rate using expansionary fiscal or monetary policy, so it might be assumed that policymakers would consistently target a lower unemployment rate using these policies. Part of the reason policymakers do not revolves around the relationship between the unemployment rate and the inflation rate. In general, economists have found that when the unemployment rate drops below a certain level, referred to as the natural rate, the inflation rate will tend to increase and continue to rise until the unemployment rate returns to its natural rate. Alternatively, when the unemployment rate rises above the natural rate, the inflation rate will tend to decelerate. The natural rate of unemployment is the level of unemployment consistent with sustainable economic growth. An unemployment rate below the natural rate suggests that the economy is growing faster than its maximum sustainable rate, which places upward pressure on wages and prices in general leading to increased inflation. The opposite is true if the unemployment rate rises above the natural rate, downward pressure is placed on wages and prices in general leading to decreased inflation. Wages make up a significant portion of the costs of goods and services, therefore upward or downward pressure on wages pushes average prices in the same direction. Two other sources of variation in the rate of inflation are inflation expectations and unexpected changes in the supply of goods and services. Inflation expectations play a significant role in the actual level of inflation, because individuals incorporate their inflation expectations when making price-setting decisions or when bargaining for wages. A change in the availability of goods and services used as inputs in the production process (e.g., oil) generally impacts the final price of goods and services in the economy, and therefore changing the rate of inflation. The natural rate of unemployment is not immutable and fluctuates alongside changes within the economy. For example, the natural rate of unemployment is affected by changes in the demographics, educational attainment, and work experience of the labor force; institutions (e.g., apprenticeship programs) and public policies (e.g., unemployment insurance); changes in productivity growth; and contemporaneous and previous level of long-term unemployment. Following the 2007-2009 recession, the actual unemployment rate remained significantly elevated compared with estimates of the natural rate of unemployment for multiple years. However, the average inflation rate decreased by less than one percentage point during this period despite predictions of negative inflation rates based on the natural rate model. Likewise, inflation has recently shown no sign of accelerating as unemployment has approached the natural rate. Some economists have used this as evidence to abandon the concept of a natural rate of unemployment in favor of other alternative indicators to explain fluctuations in inflation. Some researchers have largely upheld the natural rate model while looking at broader changes in the economy and the specific consequences of the 2007-2009 recession to explain the modest decrease in inflation after the recession. One potential explanation involves the limited supply of financing available to businesses after the breakdown of the financial sector. Another explanation cites changes in how inflation expectations are formed following changes in how the Federal Reserve responds to economic shocks and the establishment of an unofficial inflation target. Others researchers have cited the unprecedented increase in long-term unemployment that followed the recession, which significantly decreased bargaining power among workers.

Oct 25, 2016

The Precision Medicine Initiative

On February 25, 2016, the White House hosted a Precision Medicine Initiative (PMI) Summit to mark the one year anniversary of the initiative’s launch, first announced in last year’s State of the Union address. The mission of the PMI is “(t)o enable a new era of medicine through research, technology, and policies that empower patients, researchers, and providers to work together toward development of individualized care.” The PMI primarily involves three federal agencies—the National Institutes of Health (NIH), the Food and Drug Administration (FDA), and the Office of the National Coordinator for Health Information Technology (ONC)—although other federal agencies have collaborated on and contributed to the effort. Since the initiative’s inception, NIH has awarded multiple grants to begin building an extensive biobank, develop health care provider organizations (HPOs), and develop recruitment strategies for a million-person national research cohort program, now called the All of Us Research Program; NIH expects to begin enrolling participants this year. To ensure the opportunity for participation of underserved individuals, NIH and the Health Resources and Services Administration (HRSA) awarded funding for a pilot program that is to determine infrastructure needs for health centers to serve as HPOs. In addition, FDA has developed precisionFDA to facilitate data sharing and validation of new genomic assays in precision medicine. What Is Precision Medicine? Precision medicine is a relatively new term for what has traditionally been called personalized medicine, the idea of providing health care to individuals based on specific patient characteristics. Currently, medical care is usually provided in a “trial and error” manner, with treatment adjusted based on real-time patient response. Precision medicine would tailor medical treatment to the individual patient, thus aiming to improve health outcomes and save health care costs. Precision medicine is defined by the National Academy of Sciences (NAS) as “the use of genomic, epigenomic, exposure and other data to define individual patterns of disease, potentially leading to better individual treatment.” This term has been used interchangeably with personalized medicine—generally, the use of a diagnostic device and a therapeutic product to provide the best therapy, at the right dose, at the correct time for a particular patient—and sometimes with pharmacogenomics—the study of how individual genetic variation affects a person’s response to drugs. Figure 1. An Illustration of Precision Medicine: Selecting Drug Dosage Based on Individual Genotype / Source: H Xie, FW Frueh, “Pharmacogenomics steps toward personalized medicine,” Personalized Medicine, vol. 2, no. 4, pp. 333, 2005. Currently, more than 100 FDA-approved drugs contain pharmacogenomic information in their labeling; for example, the blood thinner warfarin has labeling with information about the CYP2C9 genotype and related dosing considerations. A genetic test to determine CYP2C9 genotype provides information about the speed at which an individual metabolizes warfarin. This, in turn, allows those who metabolize the drug more slowly to be identified and given lower doses, and vice versa (Figure 1). FY2017 Funding for the Precision Medicine Initiative FY2017 funding levels for the PMI are unclear currently because full-year appropriations for FDA and NIH were not enacted prior to the start of FY2017. Instead, temporary funding for these agencies has been provided through December 9, 2016, by a continuing resolution (Division C, Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act, P.L. 114-223), which generally continues discretionary funding at FY2016 levels, reduced by 0.496%. The FY2017 President’s budget requested a total of $309 million for the PMI: $4 million to FDA, $5 million to ONC, and the remaining $300 million to NIH. In FY2016, NIH received $200 million: $70 million for the National Cancer Institute (NCI) and $130 million from the Common Fund for the research cohort. FDA received $2.392 million, and ONC did not receive funding. The FY2017 President’s request proposed an increase over FY2016 of $100 million in mandatory funding for NIH. The increase is targeted for the scale-up of a national research cohort of 1 million or more volunteers, whose health, genetic, environmental, and other data would be collected and used in studies to identify novel therapeutics and prevention strategies. The requested $5 million in ONC funding would be used to support the research cohort by developing interoperability standards and requirements regarding privacy to allow for the secure exchange of information across various data systems. The NIH funds would also be used by the National Cancer Institute to support studies in cancer genomics, including those looking at how cancers can become resistant to therapy; at combinations of cancer drugs; and at how genomic changes predict therapeutic effectiveness. The requested $4 million in funding for FDA would be focused on acquiring additional expertise and developing databases to support the regulatory structure necessary to advance precision medicine and protect public health. Specifically, FDA would use some of this new funding to develop tools that will facilitate a regulatory approach for Next Generation Sequencing (NGS) technologies. Congressional Interest in Precision Medicine Precision medicine has attracted bicameral and bipartisan attention in Congress. In 2014 the House Committee on Energy and Commerce launched the 21st Century Cures initiative to examine the regulation of drugs and devices in the context of advances in science. This effort culminated in the 21st Century Cures Act (H.R. 6), which passed the House on July 10, 2015. The bill contains provisions that would address precision medicine and other complementary efforts such as privacy. On March 17, 2016, the Advancing Precision Medicine Act of 2016 (S. 2713) was introduced, and on April 18, 2016, it was reported out of the Senate Committee on Health, Education, Labor, and Pensions. This bill would codify the PMI, enhance privacy protections for sensitive identifiable data, and allow data-sharing of specified genomic information. This bill is one of 18 medical innovation bills constituting the committee’s bipartisan initiative to “examine the process for getting safe treatments, devices and cures to patients and the roles of the Food and Drug Administration (FDA) and the National Institutes of Health (NIH) in that process,” a response to the House’s 21st Century Cures initiative.

Oct 25, 2016

DHS Appropriations FY2017: Departmental Management and Operations

This report is part of a suite of reports that discuss appropriations for the Department of Homeland Security (DHS) for FY2017. It specifically discusses appropriations for the components of DHS included in the first title of the homeland security appropriations bill—the Office of the Secretary and Executive Management, the Office of the Under Secretary for Management, the DHS headquarters consolidation project, the Office of the Chief Financial Officer, the Office of the Chief Information Officer, Analysis and Operations, and the Office of Inspector General for the department. Collectively, Congress has labeled these components in recent years as “Departmental Management and Operations,” although this year, the House Appropriations Committee chose to rename the title “Departmental Management, Operations, Intelligence, and Oversight.” The report provides an overview of the Administration’s FY2017 request for these components, and the appropriations proposed by the Senate and House appropriations committees in response. Rather than limiting the scope of its review to the first titles of the bills, the report includes information on provisions throughout the bills and report that directly affect these components. Departmental Management and Operations is the smallest of the four titles that carry the bulk of funding in the bill. The Administration requested almost $1.5 billion for these components in FY2017, $37 million less than was provided for FY2016. The amount requested for these components is 3% of the Administration’s $47.7 billion request in net discretionary budget authority and disaster relief funding for DHS. The proposed decrease in discretionary funding for these components is 11.1% of the total net decrease in adjusted net discretionary budget authority requested for the department. The largest budget increase proposed in the request for these components was $41 million (66%) for the Office of the Chief Procurement Officer, while the largest budget decrease proposed was the non-recurrence of a $100 million appropriation in general provisions to fund OCIO cybersecurity activities. Senate Appropriations Committee-reported S. 3001 would have provided the components included in this title more than $1.4 billion in net discretionary budget authority in FY2017. This would have been $24 million (1.7%) less than requested, and $62 million (4.2%) less than was provided in FY2016. House Appropriations Committee-reported H.R. 5634 would have provided the components included in this title more than $1.3 billion in net discretionary budget authority in FY2017. This would have been $126 million (8.6%) less than requested, and $163 million (10.8%) less than was provided in FY2016. Additional information on the broader subject of FY2017 funding for the department can be found in CRS Report R44621, Department of Homeland Security Appropriations: FY2017, as well as links to analytical overviews and details regarding appropriations for other components. On September 29, 2016, the President signed into law P.L. 114-223, which contained a continuing resolution that funds the government at the same rate of operations as FY2017, minus 0.496% through December 9, 2017. For details on the continuing resolution and its impact on DHS, see CRS Report R44621, Department of Homeland Security Appropriations: FY2017, which also includes additional information on the broader subject of FY2017 funding for DHS as well as links to analytical overviews and details regarding components in other titles. This report will be updated once the annual appropriations process for DHS for FY2017 is concluded.

Oct 21, 2016

DHS Appropriations FY2017: Research and Development, Training, and Services

This report is part of a suite of reports that discuss appropriations for the Department of Homeland Security (DHS) for FY2017. It specifically discusses appropriations for the components of DHS included in the fourth title of the homeland security appropriations bill—in past years, this has comprised U.S. Citizenship and Naturalization Services, the Federal Law Enforcement Training Center, the Science and Technology Directorate, and the Domestic Nuclear Detection Office (DNDO). In FY2017, the Administration proposed moving the Domestic Nuclear Detection office into a new Chemical, Biological, Radiological, Nuclear, and Explosives Office, along with several other parts of DHS. Congress has labeled this title of the bill in recent years as “Research and Development, Training, and Services.” The report provides an overview of the Administration’s FY2017 request for these components, and the appropriations proposed by the Senate and House appropriations committees in response. Rather than limiting the scope of its review to the fourth title of the bills, the report includes information on provisions throughout the bills and report that directly affect these components. Research and Development, Training, and Services is the second smallest of the four titles that carry the bulk of the funding in the bill. The Administration requested $1.63 billion for these components in FY2017, $133 million (8.9%) more than was provided for FY2016. The amount requested for these components is 3.4% of the Administration’s $47.7 billion request for net discretionary budget authority and disaster relief funding for DHS. Contributing to the increase in the request was its proposal to consolidate several parts of DHS funded in other titles with DNDO into a new Chemical, Biological, Radiological, Nuclear, and Explosives Office, funded in Title IV. Senate Appropriations Committee-reported S. 3001 would have provided the components included in this title $1.50 billion in net discretionary budget authority. This would have been $132 million (8.1%) less than requested, and less than $1 million (<0.1%) more than was provided in FY2016. House Appropriations Committee-reported H.R. 5634 would have provided the components included in this title $1.63 billion in net discretionary budget authority. This would have been $1 million (0.1%) more than requested, and $134 million (9.0%) more than was provided in FY2016. On September 29, 2016, the President signed into law P.L. 114-223, which contained a continuing resolution that funds the government at the same rate of operations as FY2016, minus 0.496% through December 9, 2017. For details on the continuing resolution and its impact on DHS, see CRS Report R44621, Department of Homeland Security Appropriations: FY2017, which also includes additional information on the broader subject of FY2017 funding for DHS as well as links to analytical overviews and details regarding components in other titles. This report will be updated once the annual appropriations process for DHS for FY2017 is concluded.

Oct 20, 2016

USDA’s Actively Engaged in Farming (AEF) Requirement

In 1987, Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203, §§1301-1307), which requires that an individual or legal entity be “actively engaged in farming” (AEF) to be eligible for federal commodity revenue-support programs. AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. Designing a transparent and comprehensive AEF definition has proven difficult and has evolved over the years. The current set of laws and rules governing farm program eligibility—particularly for family members on farm operations—remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. In particular, critics contend that current U.S. Department of Agriculture (USDA) eligibility criteria—especially for providing active personal management—remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of new farm operation members simply to expand an operation’s farm payment receipts. Three major categories of legal entities are subject to AEF requirement for program payment eligibility: an individual, a partnership, and a corporation. An individual must meet three specific AEF criteria. First, independently and separately from other individuals with an interest in the farm business, the person makes a significant contribution to the operation of (a) capital, equipment, or land; and (b) active personal labor and/or active personal management. Second, the person’s share of profits or losses is commensurate with his/her contribution to the farming operation. Third, the person shares in the risk of loss from the farming operation. An individual that meets the AEF criteria is eligible for farm program payments but subject to annual payment limits. If a married person meets the AEF requirements, any spouse will also be considered to have met the AEF requirements, thus effectively doubling the individual payment limit. Another exception to AEF requirements is made for landowners provided they receive income based on the farm’s operating results. A general partnership is an association of multiple persons whereby each member is treated separately and individually for purposes of determining eligibility and payment limits. A partnership’s potential payment limit is equal to the limit for a single person times the number of persons or legal entities that comprise the operation’s ownership and meet the AEF requirements. Thus, adding a new member can potentially provide an additional payment limit. A corporation is an association of joint owners that is treated as a single person for purposes of determining eligibility and payment limits, provided that the entity meets the AEF and other eligibility criteria. Adding a new member generally does not affect a corporation’s payment limit but only increases the number of members that can share a single payment limit. In accordance with a provision in the 2014 farm bill (P.L. 113-79; §1604), USDA added more specificity to the role that a nonfamily member of a partnership or joint venture must play to qualify for farm program benefits. However, considerable issues remain that may be of interest to Congress. Long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA’s new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations.

Oct 19, 2016

Federal Citations to the Social Cost of Greenhouse Gases

Social cost, carbon, carbon dioxide, methane, nitrous oxide, greenhouse gases, regulatory impact analysis, cost-benefit analysis, benefit-cost analysis, Interagency Working Group, Office of Management and Budget,

Oct 19, 2016

The High-Speed Intercity Passenger Rail (HSIPR) Grant Program: Overview

Since 1964, when Japan opened the first rail line allowing trains to travel safely at speeds greater than 150 miles per hour, several European and Asian countries have built high-speed rail lines. There have been frequent calls for the United States to develop similar high-speed rail services, but none have been built. The financial challenge of building high-speed rail lines, which requires many billions of dollars to be spent over a lengthy period before service opens and revenues begin to be collected, makes government financial support unavoidable. Governments in other countries have provided such support, but over many years efforts to get federal support for the construction of high-speed rail lines have, with the partial exception of Amtrak’s Northeast Corridor, been unsuccessful. In fact, Congress provided little funding even for expansion of non-high-speed passenger rail service. Opponents of increased funding for intercity passenger rail have contended that it was economically inefficient compared to other modes of travel. For a brief period in 2008-2009, it appeared that the situation had changed. The 110th Congress authorized several programs to make grants to states for intercity passenger rail development in the Passenger Rail Investment and Improvement Act of 2008 (Division B of P.L. 110-432). The following year, in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) and the FY2010 Department of Transportation Appropriations Act (Division A, Title I, P.L. 111-117), the 111th Congress appropriated $10.6 billion to develop both high-speed and conventional intercity passenger rail services. The Federal Railroad Administration of the U.S. Department of Transportation used this money to award 158 grants under the new High-Speed Intercity Passenger Rail (HSIPR) Grant Program. Some 80% of the funding went to a relatively small number of large-scale projects. These included multi-billion-dollar grants to California and Florida for high-speed rail lines; Florida subsequently turned down its grant. This dramatic change in policy ended just as suddenly, as the 112th Congress rescinded $400 million of the $10.6 billion previously appropriated and rejected the Administration’s requests for additional funding. Succeeding Congresses have also not responded to requests for HSIPR funding. In addition, several states declined significant grants for improvements to their intercity passenger rail lines. That funding was reallocated to other states. All but two of the HSIPR projects are expected to be complete by 2017, but the most ambitious and expensive, the California High-Speed Rail project, will not enter service for many years. Congress’s creation, then abandonment, of the HSIPR program illustrates the challenges of funding major construction projects that take years to complete without a stable source of financing. At the beginning, the federal and state governments lacked the expertise and program framework to implement the program. Now that the expertise and program framework have been developed, they are at risk of disappearing due to the lack of continued funding. Also, such funding spurts make long-term project planning and implementation very difficult. A challenge facing the future of the HSIPR program is the large amount of funding required for high-speed rail development, combined with the lack of a dedicated funding source and the funding shortages facing other federal transportation programs even with their dedicated funding sources. Another challenge is contending with arguments against intercity passenger rail. Critics assert that it requires larger per-passenger subsidies than other travel modes, that it is not well-suited to the economic geography of the United States, and that near-term technologies may provide better alternatives.

Oct 18, 2016

WRDA 2016: Infrastructure, Lead, and Other Safe Drinking Water Act Provisions in H.R. 5303 and S. 2848

Oct 18, 2016

Gun Control: Federal Law and Legislative Action in the 114th Congress

In the 114th Congress, the Senate debated several gun proposals following two high-fatality mass shootings in December 2015 and June 2016. After both shootings, Senate debate coalesced around the following issues: Should the Attorney General be given the authority to deny firearms (and explosives) transfers to persons she determines to be “dangerous terrorists”? Should federal background check requirements be expanded to include intrastate firearms transfers among private, unlicensed persons? Should grants be provided or withheld to encourage state, local, municipal, tribal, and territorial authorities to improve computer access to records on persons prohibited from possessing firearms for the purposes of background checks? Should definitions related to mental incompetency in federal gun control regulations be codified or revised? Debate on the latter three issues mirrored congressional debate that followed the December 2012, Newtown, CT, mass shooting. Similar efforts were made in the House of Representatives to bring gun control proposals to the House floor for general debate and votes, but those efforts proved unsuccessful. In December 2015, the Senate debated several gun control amendments during consideration of the Restoring Americans’ Healthcare Freedom Reconciliation Act (H.R. 3762). Two of those amendments (S.Amdt. 2910 and S.Amdt. 2912) addressed firearms transfers and dangerous terrorists. Another amendment (S.Amdt. 2908) would have expanded federal firearms background check requirements to cover private, intrastate transfers between non-gun dealers, when such transfers were arranged in public fora, such as on the Internet or at a gun show or flea market. Still another amendment (S.Amdt. 2914) would not have expanded the scope of federal background check requirements, but included provisions to improve background checks. In June 2016, the Senate again debated several gun control amendments during consideration of the FY2017 Departments of Commerce and Justice, Science, and Related Agencies (CJS) Appropriations bill (H.R. 2578, the expected vehicle for S. 2837). One amendment (S.Amdt. 4750) would have expanded the scope of federal background check requirements and captured more private, intrastate firearms transfers than the amendment (S.Amdt. 2908) to H.R. 3762. In addition, several amendments were considered that would have addressed firearms transfers and dangerous terrorists (S.Amdt. 4720, S.Amdt. 4749, S.Amdt. 4858, and S.Amdt. 4859). As before, another amendment (S.Amdt. 4751) would not have expanded the scope of federal background checks requirements, but included provisions to improve information sharing for background check purposes on persons who are ineligible to receive or possess firearms for background check purposes. For context, this report provides background on the two major federal gun control statutory frameworks: the National Firearms Act of 1934 (NFA), as amended, and the Gun Control Act of 1968 (GCA), as amended. It also provides analysis of the Senate amendments offered in the 114th Congress that would have addressed the above listed issues, as well as the status of gun control-related appropriations.

Oct 14, 2016

Overview of Continuing Appropriations for FY2017 (H.R. 5325)

The purpose of this report is to provide an analysis of the continuing appropriations provisions for FY2017 in H.R. 5325. The measure also included provisions covering appropriations in the Military Construction and Veterans Affairs Appropriations bill for all of FY2017 (Division A), as well as emergency funds to combat the Zika virus and provide relief for flood victims in Louisiana and other affected states (Division B). On September 29, 2016, the President signed H.R. 5325 into law (P.L. 114-223). Division C of H.R. 5325 was termed a “continuing resolution” (CR) because measures to provide temporary authority for federal agencies and programs to continue spending are typically in the form of a joint resolution. It provides temporary funding in FY2017 for the programs and activities covered by the remaining 11 regular appropriations bills, since none of them had 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. It includes both budget authority that is subject to the statutory discretionary spending limits on defense and nondefense spending and also budget authority that is effectively exempt from those limits, such as that designated as for “Overseas Contingency Operations/Global War on Terrorism.” Funding under the terms of the CR is effective October 1, 2016, through December 9, 2016—roughly the first 10 weeks of the fiscal year. 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 in the CR, however, are also subject to an across-the-board decrease of 0.496% (pursuant to Section 101(b) of Division C). According to the cost estimate prepared by the Congressional Budget Office (CBO), the total amount of budget authority for the Military Construction and Veterans Affairs appropriations act—and the annualized budget authority for the other regular appropriations in the FY2017 CR that are subject to the statutory discretionary spending limits—totals approximately $1,067 billion. When spending 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 total is $1,149 billion. 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 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.

Oct 13, 2016

Recent Developments in U.S.-Russian Nonproliferation Cooperation

On October 3, 2016, Russian President Vladimir Putin issued a decree suspending participation in a bilateral U.S.-Russia weapons plutonium disposal agreement (the 2000 Plutonium Management and Disposition Agreement, or PMDA). The next day, Russia suspended participation in a 2013 cooperative agreement on nuclear- and energy-related research and terminated a third from 2010 on exploring options for converting research reactors from weapons-usable fuel. These agreements are part of a suite of nonproliferation and nuclear security agreements the two countries concluded starting in the 1990s to prevent diversion of weapons-usable nuclear materials. Russia’s recent steps contribute to a continuing decline in U.S.-Russian nonproliferation cooperation that accelerated in 2014 after Russia’s invasion of Ukraine. At the same time, Russia has not suspended its participation in the New START arms control agreement that reduces nuclear warheads. Russia’s suspension of the PMDA came at a time of uncertainty for the agreement. The PMDA requires the United States and Russia to each convert 34 metric tons of weapons-grade plutonium, retained from Cold War-era production, to a form unusable for nuclear weapons. This is enough plutonium for 17,000 nuclear weapons. The agreement was amended in 2006 and 2010 to accommodate a change to the Russian plan and to establish liability protections. Article 3.1 of the 2010 Protocol states that the parties may agree “in writing” if they choose “other measures” of disposition, and the PMDA has a Joint Consultative Commission (JCC) to address implementation issues. The two countries agreed to begin plutonium disposition by 2018, with the International Atomic Energy Agency (IAEA) verifying implementation. On the U.S. side, a plant to convert the plutonium into mixed oxide (MOX) fuel is being built at the Department of Energy’s (DOE’s) Savannah River Site in South Carolina. Due to the growing cost of the MOX plant, the Obama Administration proposed changing the U.S. plan from processing plutonium into MOX fuel to an option known as “dilute and dispose,” a change that would require congressional approval. (DOE’s FY2015 budget justification said the lifecycle cost estimate for the MOX program had risen to $30 billion; by September 2016, those estimates had further risen to $50-$60 billion.) In FY2015, the Administration proposed placing the facility in “cold standby” while studying other plutonium disposition options. Instead, Congress appropriated $345 million to continue construction at a reduced level and required DOE to study alternative disposition approaches. DOE received $340 million in FY2016 to continue construction. In its FY2017 budget request, the Administration proposed terminating the project and instead pursuing the dilute and dispose option. In response to these evolving U.S. plans, Russian officials, including President Putin, claimed even before the PMDA suspension that the dilute and dispose method would not fall under the terms of the agreement and said that any changes would require Russian approval. They also expressed concern that the United States might use the plutonium for weapons in the future. Some U.S. experts have countered that the dilute and dispose method could irreversibly alter the weapons-grade plutonium if it were blended with lower-grade plutonium, and therefore would be acceptable for meeting nonproliferation goals. In response to the PMDA suspension, White House spokesman Josh Earnest said that the Russian decision “to unilaterally withdraw from this commitment is disappointing.” In an October 4 interview with Russian media, U.S. Under Secretary for Arms Control Rose Gottemoeller said that the United States was committed to implementing the PMDA and had been transparent with Russian counterparts about the debate over the disposal method. She said the United States was willing to work with Russia to resolve technical questions and expressed confidence about the irreversibility of the dilute and dispose method. She reiterated that Congress would have to approve a change. The Russian suspensions come at a time of increased tension in U.S.-Russia relations due to the collapse of a recent ceasefire agreement in Syria the two countries had brokered. The same day Russia suspended the PMDA, the State Department announced the United States was suspending its “participation in bilateral channels with Russia” to sustain the Cessation of Hostilities in Syria, citing Russia’s failure “to live up to its own commitments.” In a statement on the PMDA suspension, the Russian Foreign Minister said Moscow’s decision was “a signal to Washington that it cannot use the language of force, sanctions and ultimatums with Russia while continuing to selectively cooperate with our country only when it benefits the U.S.” The political context of the PMDA suspension was further visible in the draft law on the PMDA suspension President Putin submitted to Russia’s parliament. The legislation includes a wide-ranging and unlikely list of conditions the United States must meet before Russia will return to the agreement, including changes to NATO’s force structure, removal of sanctions against Russia, and compensation for damages it has incurred. An explanatory note attached to the legislation said that Russia intended to keep the 34 metric tons of plutonium out of weapons use and remained committed to nuclear nonproliferation. The statements suspending the other two nuclear-related agreements said that “Russia will preserve the possibility of resuming cooperation under the Agreement when that is justified by the general context of relations with the United States.” The suspensions might not have immediate practical impact. Both sides have said they will continue to work on pledges made under the PMDA. Moreover, a study on research reactor conversion had been completed, and joint research work had already been frozen. Nevertheless, the PMDA and research reactor conversion agreements were the two most prominent ongoing bilateral nuclear security projects in Russia. Even if both sides dispose of the weapons plutonium separately, verification provisions would be lost. More broadly, the suspensions are part of an ongoing decline in U.S.-Russian nonproliferation cooperation. Cooperation had already narrowed after the 2013 expiration of the Nunn-Lugar Cooperative Threat Reduction (CTR) Umbrella Agreement. Still, the United States and Russia continued to collaborate on ongoing projects and hoped to expand nuclear research work. Some cooperation also continued on cleaning out weapons-grade material in third countries, most recently from Poland. Joint efforts deteriorated further after Russia’s actions in Ukraine starting in March 2014. In April 2014, the U.S. Department of Energy put certain joint research projects and meetings on hold. In December 2014, Russia informed the United States that it would no longer accept U.S. assistance in securing nuclear materials. The FY2015 National Defense Authorization Act (NDAA) (P.L. 113-291, §3122) stated that nuclear security activities in Russia were to be completed no later than 2018 (except for activities under the PMDA). The FY2016 NDAA (P.L. 114-92, §3121) went further, prohibiting U.S. nonproliferation assistance funding to Russia except with a national security waiver. The FY2017 NDAA contains similar provisions.

Oct 13, 2016

TPP: Taking the Measure of the Agreement for U.S. Agriculture

Oct 13, 2016

Tax Policy and U.S. Territories: Overview and Issues for Congress

There are 14 U.S. territories, or possessions, five of which are inhabited: Puerto Rico (PR), Guam, U.S. Virgin Islands (USVI), American Samoa (AS), and the Commonwealth of the Northern Mariana Islands (CNMI). Each of these inhabited territories has a local tax system with features that help determine each territory’s local public finances. The U.S. Internal Revenue Code (IRC) has two important roles in establishing the tax policy relationship between the United States and the territories. First, native residents of U.S. territories are U.S. citizens or nationals but are taxed more similar to foreign citizens because income earned from territorial sources is treated like foreign-source income. The IRC also treats U.S. subsidiaries formed in the territories as foreign corporations, which can generally defer U.S. tax on income earned from business or trade in the territories. Second, the IRC serves as the local tax laws in the territories that are required to use a mirror-code system (USVI, Guam, and the CNMI), in which the territory substitutes its name for the “United States” to give the IRC the proper effect as the territory’s local income tax system. AS is not bound by the mirror system but has chosen to adopt much of the IRC for its income tax. PR has its own income tax system, which is not based on the IRC. These dynamics between federal and territorial tax policy raise several potential issues for Congress. First, economic development of the territories has been of perennial congressional interest. Tax incentives enacted by the territories and the United States have been shown to direct offshore investment to the territories. With this said, though, economic studies of one broader U.S. tax incentive, the now-repealed Section 936 credit, indicate that any employment effects are usually secondary to the magnitude of effects on shareholder earnings, and average tax benefit for corporations often equaled if not surpassed average compensation per employee. Tax policies that effectively subsidize a more narrow set of industries in certain territories, such as rum production in PR and the USVI and manufacturing in AS, still exist today. Second, federal tax benefits could be used to assist low-income households living in the territories. For example, the Earned Income Tax Credit (EITC) and the additional child tax credit (ACTC) could be expanded to low-income territorial households. The EITC is typically not available to territorial residents and the ACTC is limited to residents of the mirror code territories and certain residents of PR. Although these options could target lower-income households, they could also impose administrative costs for territorial households that are not required to file U.S. tax returns (e.g., because they only have territorial-source income). A payroll tax cut could be administratively simpler (since all territorial residents withhold taxes for some federal payroll taxes), but it would also be less narrowly targeted to lower-income households. Third, interactions and differences in tax rates between the U.S. and territorial tax policies also create opportunities for tax arbitrage and avoidance by corporations and certain individuals. For the United States, this tax revenue loss is part of a broader issue with international income and profit shifting. For the territories, the revenue lost from special tax incentives could be used to reform the local tax system, increase spending on social programs, or pay down their debt. Such tax avoidance opportunities can distort the allocation of capital away from locations and industries where investment earns the highest economic rate of return. Additionally, the ability for certain taxpayers to utilize sophisticated tax avoidance strategies could raise issues of fairness. This report summarizes U.S. tax policy related to the territories, including a general discussion of how federal taxes apply to territorial residents and how federal law affects the different territorial tax systems in similar or different ways. This report is not intended to be a comprehensive guide to federal or territorial tax policy or tax law.

Oct 7, 2016

Water Resources Development Act of 2016: Army Corps of Engineers Provisions in H.R. 5303 and S. 2848

Water Resources Development Act (WRDA) provisions typically relate directly to the U.S. Army Corps of Engineers (Corps) or more broadly to water resource infrastructure, such as dams and levees. The House version of WRDA 2016 (H.R. 5303) continues the traditional focus on the Corps. The House passed H.R. 5303 on September 28, 2016. The Senate version (S. 2848) is an omnibus water bill that addresses a variety of water issues and the activities of multiple departments and agencies. The Senate passed S. 2848 on September 15, 2016. For a brief description of the two bills, including their non-Corps provisions, see CRS Insight IN10579, Water Resources Development Act of 2016: H.R. 5303 and S. 2848. A Corps Primer The Corps is the lead federal agency responsible for navigation improvements for authorized harbor and waterway projects and for coastal and riverine flood risk reduction infrastructure. The Corps also is actively engaged in aquatic ecosystem restoration, environmental protection, and stewardship efforts. A WRDA is the typical legislative vehicle to update Corps policies and authorizations. WRDAs are not reauthorization bills. Congress historically has used WRDAs to authorize new Corps studies, projects, and modifications to ongoing projects. Congress generally authorizes a Corps activity before it is considered for federal funding through subsequent annual Energy and Water Development appropriations acts. If recent rates of funding and authorization are maintained, demand for Corps projects and maintenance activities will continue to exceed what the agency can deliver with annual appropriations. The 113th Congress enacted the Water Resources Reform and Development Act of 2014 (WRRDA 2014; P.L. 113-121). Prior to WRRDA 2014, the most recently enacted Corps authorization bills were WRDA 2007 (P.L. 110-114) and WRDA 2000 (P.L. 106-541). Selected Corps Provisions in WRDA 2016 Project-Specific Authorizations. Both S. 2848 and H.R. 5303 would authorize new Corps construction projects and modifications to ongoing projects. S. 2848 would authorize 29 new construction projects at a federal cost of $8.4 billion. Each of these project authorizations is based on a completed report by the Corps’ Chief of Engineers (known as a Chief’s Report). H.R. 5303 would authorize 30 new construction projects at a federal cost of $8.7 billion. Concerns over authorization earmarks for construction projects largely have been overcome by relying on Chief’s Reports as the basis for congressional authorization. Navigation. Section 108 of H.R. 5303 as reported by the House Transportation and Infrastructure Committee would have provided that the balance of the Harbor Maintenance Trust Fund (estimated to be more than $9 billion in FY2017) be made available for harbor maintenance in FY2027 without further appropriation. H.R. 5303 as passed by the House does not include a similar provision. Regarding navigation construction, Section 2011 of S. 2848 would reduce the nonfederal construction cost-share for harbor deepening activities that occur between 45 feet and 50 feet. The Congressional Budget Office found the provision would increase the federal share by $430 million over the FY2017-FY2026 period. Ecosystem Restoration and Coastal Provisions. Title IV of S. 2848 would adjust several Corps-related watershed, coastal, and regional multipurpose and ecosystem restoration efforts. Multiple provisions of S. 2848 would require the consideration of sea-level rise effects on Corps activities (e.g., §§1017, 2017, 4013, and 4015). Section 4013 also would require the Secretary of the Army to convene an interagency working group on resilience to extreme weather and sea-level rise and related federal investments. Section 147 of H.R. 5303 would require the Corps to conduct a comprehensive study of flood risks for vulnerable coastal populations in the Corps’ South Atlantic Division (which includes southeastern states and U.S. territories in the Caribbean). Section 186 of H.R. 5303 would require the Corps to develop a structural health monitoring program (that includes the identification of risks associated with sea-level rise) for the condition of infrastructure operated and maintained by the Corps. Section 1015 of S. 2848 would establish that nonfederal operation and maintenance responsibilities for ecosystem restoration projects cease 10 years after the Secretary determines the restoration project is a success. Section 114 of H.R. 5303 would release nonfederal sponsors of their restoration operation and maintenance responsibilities after 50 years or once the ecosystem’s natural hydrologic and ecologic function has returned. Reservoir Operations. Drought conditions and local water supply constraints have prompted nonfederal interest in updating the operations of multipurpose reservoirs to expand opportunities for water supply. Section 1048 of S. 2848 would authorize the Secretary to review and update the federal flood control operation guidelines for certain nonfederal dams. Section 1012 of S. 2848 would authorize the Secretary to review and approve proposals to increase the quantity of water available from federal water resources projects. Section 111 of H.R. 5303 would authorize the Secretary to evaluate and carry out conservation measures at its projects in states with recent drought emergencies. Studies and Environmental Infrastructure. Section 7001 of WRRDA 2014 established a process for the Administration to annually solicit and review public proposals for new Corps studies, construction projects, and project modifications. Congress has received two Section 7001 reports from the Administration containing proposals that meet the congressionally established criteria for inclusion. Both S. 2848 and H.R. 5303 would authorize some of the activities identified in the Section 7001 reports for 2015 and 2016. Section 131 of H.R. 5303 would authorize submission of environmental infrastructure assistance proposals (which are typically for municipal water and wastewater infrastructure) in future Section 7001 solicitations. Deauthorizations. WRRDA 2014 resulted in $14.3 billion in deauthorizations of unconstructed projects or project elements. In S. 2848, Sections 2001 and 1047 would adjust the existing deauthorization processes. Section 301 of H.R. 5303 would require that the Secretary identify an additional $10 billion in construction activities to deauthorize. Tribal Consultation. Section 185 of H.R. 5303 would require the Corps to review its tribal consultation policies for permits and projects and to report back to Congress in one year. Corps tribal consultation practices have received attention recently as part of the controversy related to the Dakota Access Pipeline.

Oct 7, 2016

Water Resources Development Act of 2016: H.R. 5303 and S. 2848

The House and Senate versions of the Water Resources Development Act of 2016 (WRDA 2016) have different scopes. The House version of WRDA 2016 (H.R. 5303) continues the traditional focus of WRDAs on the Army Corps of Engineers (Corps). The House passed H.R. 5303 on September 28, 2016. The Senate bill (S. 2848) is an omnibus water bill addressing a variety of water issues and activities of multiple federal agencies; the Senate passed S. 2848 on September 15, 2016. The provisions below illustrate the scope and potential effects of the two bills. Corps Authorizations and Funding Senate and House—both bills would authorize new Corps studies and construction projects and modifications to ongoing projects. S. 2848 would authorize 29 new construction projects at a federal cost of $8.4 billion. The House version would authorize 30 projects at a total cost of federal cost of $8.7 billion. For more, see CRS Insight IN10510, Water Resources Development Act of 2016: Army Corps of Engineers Provisions in H.R. 5303 and S. 2848, by Nicole T. Carter. House—H.R. 5303 as passed by the House did not include a provision from an earlier version of the bill. Section 108 of H.R. 5303 as reported by the House Committee on Transportation and Infrastructure would have made available the balance of the Harbor Maintenance Trust Fund in FY2027 without further appropriation. Senate, Section 2011—would reduce the nonfederal cost share for certain harbor construction activities. The Congressional Budget Office (CBO) estimates that the provision would increase the federal share by $430 million from FY2017 to FY2026. House, Section 185—would require the Corps to review its tribal consultation policies for permits and projects and to report back to Congress in one year. Drinking Water, Wastewater, and Emergency Public Health Provisions (Flint) Senate, Title VII—would fund existing and authorize new Environmental Protection Agency (EPA) water and wastewater infrastructure programs. This title would directly provide $100 million for Drinking Water State Revolving Funds for states with lead-related emergency declarations and $70 million to EPA for a new water infrastructure loan program known as the Water Infrastructure Finance and Innovation Act (WIFIA) program. This title also would provide $20 million in mandatory spending to establish a lead-exposure registry for a city with a lead-contaminated water system and an advisory committee, and $30 million to administer lead-poisoning prevention and other childhood health programs. For more on EPA provisions, see CRS In Focus IF10471, WRDA 2016: Clean Water Act and Infrastructure Financing Provisions in Senate-Passed S. 2848, by Claudia Copeland, and CRS In Focus IF10474, WRDA 2016: Infrastructure, Lead, and Other Safe Drinking Water Act Provisions in Senate-Passed S. 2848, by Mary Tiemann. House—Section 192 of H.R. 5303 would provide an authorization of appropriations of $170 million for the Corps to provide environmental infrastructure assistance to repair or replace qualifying public or private water systems. Eligibility would be limited to communities identified in specific provisions of earlier WRDA bills that also are in states with presidential emergency declarations for chemical, physical, or biological constituents (including lead) or other contaminants in their water systems. Genesee County, MI, where Flint is located, appears to qualify; other counties in Michigan and in other states also may qualify. Related appropriations are not included. Ecosystem, Coastal, and Watershed Provisions Senate, Title IV—would adjust a number of authorities for specific Corps watershed and regional ecosystem restoration and coastal efforts (e.g., Chesapeake Bay oyster restoration). Senate, Title VII—would authorize new or amended ecosystem restoration activities for federal agencies other than the Corps in the Columbia River basin, Delaware River basin, Great Lakes, Lake Tahoe, Long Island Sound, and California’s Salton Sea. Senate, multiple provisions—would require consideration of the effects of sea-level rise on Corps activities (e.g., Sections 1017, 2017, 4013, and 4015). Section 4013 also would require the Secretary of the Army to convene an interagency working group on resilience to extreme weather and sea-level rise and related federal investments. House—Section 147 would require the Corps to conduct a comprehensive study of flood risks for vulnerable coastal populations in the Corps’ South Atlantic Division (which includes southeastern states and U.S. territories in the Caribbean). Section 186 would require the Corps to develop a structural health monitoring program (including sea-level rise risks) for its infrastructure. Environmental Protection, Innovative Technology, and Nonfederal Dam Safety Senate, Section 8001—would create a mechanism to allow EPA to approve state programs regulating coal combustion residuals (CCR, known commonly as coal ash) and would allow EPA to regulate CCR in states that choose not to. Senate, Section 8006—would modify the applicability of EPA’s Spill Prevention, Control, and Countermeasure regulations for farms by excluding specific oil-storage containers from regulation. Senate, Section 8010—would address the payment of claims for response costs associated with the August 2015 Gold King Mine incident. It also would authorize a long-term water quality monitoring program downstream of the mine. Senate, multiple provisions—would authorize innovative water technology adoption and related research (e.g., Sections 7304, 7305, 4306, 7308, and 7309) through EPA, Bureau of Reclamation, and U.S. Geological Survey programs. Senate, Section 3004—would authorize a new Federal Emergency Management Agency grant program to assist state dam safety programs with rehabilitation of high-hazard nonfederal dams. House—no similar provisions. Drought Preparedness and Project Reoperations Senate, Section 7307—would require various federal departments to jointly develop non-regulatory drought resilience guidelines to support local drought-preparedness planning and investments. Senate, Section 7302—would expand EPA’s WIFIA program to include projects to enhance water supplies by improving drought and other natural hazard resilience and reducing aquifer depletion. Senate, Section 1048—would authorize the Corps to review and update the federal flood control operation guidelines for certain nonfederal dams. Senate, Section 1012—would authorize the Corps to review and approve proposals to increase available water supplies from federal water resources projects. House, Section 111—would authorize the Corps to evaluate and carry out water supply conservation measures at its projects in states with recent drought emergencies.

Oct 7, 2016

Presidential Elections: Vacancies in Major-Party Candidacies and the Position of President-Elect

What would happen in 2016 if a candidate for President or Vice President were to die or leave the ticket any time between the national party conventions and the November 8 election day? What would happen if this occurred during presidential transition, either between election day and the December 19, 2016, meeting of the electoral college; or between December 19 and the inauguration of the President and Vice President on January 20, 2017? Procedures to fill these vacancies differ depending on when they occur. During the Election Campaign—Between the National Party Nominating Conventions and the Election. After the conventions, which are usually held in July or August, and election day, November 8 in 2016, political party rules apply. For the Democrats, the Democratic National Committee would select a replacement; for the Republicans, the Republican National Committee would select replacement, or it could reconvene the national convention to perform this task. Between the Election and the Electoral College Meeting. On election day, voters choose members of the electoral college, which formally selects the President- and Vice President-elect several weeks later (December 19 in 2016). Although the transition has begun, party rules still apply: a replacement candidate would be chosen by the national committees of either party, or by a reassembled Republican National Convention. Between the Electoral College Meeting and Inauguration. The balance of scholarly opinion holds that the President- and Vice President-elect are chosen once the electoral votes are cast. The electoral votes are counted and declared by a joint session of Congress, held January 6 of the year following the election, although Congress occasionally sets a different date for the joint session. During this period, succession is covered by the 20th Amendment to the Constitution: if the President-elect dies, the Vice President-elect becomes President-elect. Although the amendment does not specifically address the issues of disability, disqualification, or resignation during this period, its language, “failure to qualify,” could arguably be interpreted to cover such contingencies. Vacancies in the position of Vice President-elect are not mentioned in the 20th Amendment; they would be covered after the inauguration by the 25th Amendment. If no person qualifies as President or Vice President by inauguration day, then the Succession Act (3 U.S.C. 19) applies: the Speaker of the House of Representatives, the President pro tempore of the Senate, and duly confirmed Cabinet officers, in that order, would act as President. Following the events of September 11, 2001, concern about the possibility of terrorist attacks at the inauguration led to proposals to safeguard the line of presidential succession during the swearing-in ceremony, especially during a change of administrations. Most involve a “designated survivor,” a constitutionally eligible successor who would stay away from the ceremony in order to safeguard continuity in the office of the President. One option would be for an elected official in the line of succession, such as the Speaker of the House of Representatives or President pro-tempore of the Senate, to be absent from the ceremony. During a change of administrations, a Cabinet secretary of the new administration could be confirmed by the Senate and installed prior to the inauguration, or a Cabinet secretary from the outgoing administration could remain in office until after the inauguration. In either case, the designated survivor would be absent from the ceremony. Related precautions have been taken since the presidential inauguration of 2009. In that year, Defense Secretary Robert M. Gates, a George W. Bush appointee who remained in office in the Barrack H. Obama Administration, did not attend the inauguration ceremony. In 2013, Veterans Affairs Secretary Eric Shinseki stayed away from the swearing-in.

Oct 6, 2016

Treasury Department Appropriations, FY2017

At its most basic level of organization, the Treasury Department is a collection of departmental offices and operating bureaus. The bureaus as a whole typically account for 95% of Treasury’s budget and workforce. Most bureaus and offices are funded through annual appropriations. Treasury appropriations are distributed among 11 accounts in FY2016: (1) Departmental Offices (DO), (2) Office of Terrorism and Financial Intelligence (TFI), (3)Department-wide Systems and Capital Investments Program (DSCIP), (4) Office of Inspector General (OIG), (5) Treasury Inspector General for Tax Administration (TIGTA), (6) Special Inspector General for the Troubled Asset Relief Program (SIGTARP), (7) Financial Crimes Enforcement Network (FinCEN), (8) Bureau of the Fiscal Service (BFS), (9) Alcohol and Tobacco Tax and Trade Bureau (ATTB), (10) Community Development Financial Institutions Fund (CDFIF), and (11) the Internal Revenue Service (IRS). The President’s budget request for FY2017 calls for the Treasury Department to receive $13.144 billion in appropriations, including a rescission of $657 million for the Treasury Forfeiture Fund (TFF). Of the requested funds, $12.280 billion would go to the IRS; $353 million to the BFS; $217 million to DO; $117 million to TFI; $246 million to CDFIF; $170 million to TIGTA; $115 million to FinCEN; $106 million to ATTB; $41 million to SIGTARP; $37 million to OIG; and $5 million to DSCIP. In early July 2016, the House approved a bill (H.R. 5485) that provided appropriations for the Treasury Department and several other agencies in FY2017. Under the measure, Treasury would receive $11.694 billion in appropriations, including a rescission of $754 million from the TFF. This amount is $248 million less than the amount enacted for FY2016 and $1.450 billion less than the budget request. During the previous month, the Senate Appropriations Committee reported a bill (S. 3067) to fund Treasury in FY2017. Under the measure, Treasury would receive $12.040 billion in appropriations, including a rescission of $657 million from the TFF. The recommended amount is $98 million below the amount enacted for FY2016 and $1.104 billion less than the budget request. The three FY2017 budget proposals for Treasury raise several issues for Congress. One concerns the status of funding for the Office of Terrorism and Financial Intelligence (TFI): H.R. 5485 (as passed by the House) would create a separate appropriations account for the TFF, whereas both the budget request and S. 3067 (as reported) would combine funding for the office with overall DO funding. Another issue is the future status of the Healthy Food Initiative (HFI), a CDFIF program. The budget request includes designated funding for HFI, but neither S. 3067 nor H.R. 5485 does so. Proposed funding for the IRS in FY2017 focuses attention on three additional issues: (1) the appropriate size of the IRS budget, (2) the advantages and disadvantages of using discretionary funding cap adjustments under the Balanced Budget Act of 2011 to pay for new IRS enforcement initiatives, and (3) the impact on the size of the IRS budget of the current budget scoring convention of disregarding the net revenue effect of agency administrative programs.

Oct 6, 2016

U.S. Foreign Assistance to Latin America and the Caribbean: Trends and FY2017 Appropriations

Geographic proximity has forged strong linkages between the United States and the nations of Latin America and the Caribbean, with U.S. interests encompassing economic, political, and security concerns. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to advancing democracy and open markets since the 1990s. Current U.S. policy toward the region chiefly seeks to strengthen democratic governance, defend human rights, improve citizen security, enhance social inclusion and economic prosperity, and foster clean energy development and resiliency to climate change. The United States provides foreign assistance to the region to advance these priorities. Assistance Trends Since 1946, the United States has provided nearly $165 billion of assistance to the region in constant 2014 dollars (or more than $79 billion in historical, non-inflation-adjusted dollars). Funding levels have fluctuated over time, however, according to regional trends and U.S. policy initiatives. U.S. assistance spiked during the 1960s under President John F. Kennedy’s Alliance for Progress and then declined in the 1970s before spiking again during the Central American conflicts of the 1980s. After another decline during the 1990s, assistance remained on a generally upward trajectory through the first decade of this century. Aid appropriations for the region declined in each of the four fiscal years between FY2011 and FY2014 before increasingly slightly in FY2015 and FY2016. FY2017 Request The Administration’s FY2017 foreign aid request would provide $1.7 billion to the region through the State Department and the U.S. Agency for International Development (USAID). Although the overall amount of aid would remain relatively flat compared to FY2016, the allocation of assistance within the region would change in several ways. The request would provide additional development assistance to Central American nations to address the root causes of emigration from the subregion. The request also would increase assistance for Colombia to help end its internal conflict. Conversely, the request would reduce funding for U.S. security initiatives in Mexico, Central America, and the Caribbean. Legislative Developments On September 29, 2016, President Obama signed into law a continuing resolution (P.L. 114-223) that funds most foreign aid programs and activities at the FY2016 level, minus an across-the-board reduction of 0.496%, until December 9, 2016. The measure also includes $145.5 million in supplemental FY2016 appropriations for global health assistance to address the Zika virus outbreak. The percentage of those funds that would be allocated to Latin America and the Caribbean remains unclear. As Congress considers appropriations for the remainder of FY2017, it may draw from the Department of State, Foreign Operations, and Related Programs appropriations measures that were reported out of the Senate and House Appropriations Committees—S. 3117, reported out on June 29, 2016, and H.R. 5912, reported out on July 15, 2016. Whereas S. 3117 includes 0.09% less funding than the Administration requested for bilateral economic assistance and international security assistance globally, H.R. 5912 includes 3.5% more funding than the Administration requested for such programs. The total amount of assistance the measures would provide to Latin America and the Caribbean is unclear because the bills and their accompanying reports (S.Rept. 114-290 and H.Rept. 114-693) do not specify appropriations levels for every country and program. Nevertheless, congressional priorities appear to differ from Administration priorities in several respects: S. 3117 would provide up to $650.6 million to implement the U.S. Strategy for Engagement in Central America, which is about $100 million less than requested; H.R. 5912 would provide $750 million. S. 3117 would fully fund the request of $391.3 million for Colombia, whereas H.R. 5912 would provide at least $300.1 million for Colombia, with the potential for the total to increase to $491.2 million. S. 3117 would provide no more than $183.2 million for Haiti, which is $35 million less than requested. H.R. 5912 does not specify a funding level for Haiti. S. 3117 would fully fund the Administration’s $134.7 million request for Mexico, whereas H.R. 5912 would provide an additional $24 million for security programs in Mexico.

Oct 6, 2016

Proposed Rule to Update Standards for SNAP-Authorized Retailers: In Brief

On February 17, 2016, the U.S. Department of Agriculture’s (USDA’s) Food and Nutrition Service (USDA-FNS) published a proposed rule titled, “Enhancing Retailer Standards in the Supplemental Nutrition Assistance Program (SNAP).” On April 5, 2016, USDA-FNS published a clarification of the proposed rule and extended the comment period to May 18, 2016. SNAP, the largest of USDA’s domestic food assistance programs, provides benefits to eligible participants; these benefits are redeemable for SNAP-eligible foods at SNAP-authorized retailers. SNAP-authorized retailers are stores and markets that are allowed to accept SNAP benefits. The proposed rule would implement provisions of the Agriculture Act of 2014 (“2014 farm bill,” P.L. 113-79) that made changes to inventory requirements for SNAP-authorized retailers and, per USDA-FNS, would also address other policy objectives. This proposed rule would make changes to 7 C.F.R. Part 271 and Part 278 in five areas of retailer authorization policy: (1) sales of hot, prepared foods; (2) definition of staple foods; (3) inventory and depth of stock; (4) access-related exceptions to the rules; and (5) disclosures of retailer information. The proposed rule has been controversial, particularly the provisions not explicitly addressed by the farm bill. Driving the debate over these changes has been the potential impact on smaller retailers. Many Members of Congress have raised opposition to the proposed rule, and both the House- and the Senate-reported FY2017 Agriculture and Related Agencies appropriations bills include language to limit USDA’s discretion in setting retailer standards.

Oct 5, 2016

Social Security Administration (SSA): FY2017 Appropriations and Recent Trends

The Social Security Administration (SSA) is responsible for administering a number of federal entitlement programs that provide income support (cash benefits) to qualified individuals. These programs are Old-Age, Survivors, and Disability Insurance (OASDI), commonly known as Social Security; Supplemental Security Income (SSI) for the Aged, Blind, and Disabled; and Special Benefits for Certain World War II Veterans. In FY2017, SSA’s programs are projected to pay a combined $1 trillion in federal benefits to an estimated 68.4 million individuals. The cost to administer these programs is projected to be about 1.3% of benefit outlays. Although benefit payments for SSA’s programs are considered mandatory spending and thus are not controlled by the annual appropriations process, the agency requires annual discretionary appropriations to carry out its programs and to support the administration of non-SSA programs, such as Medicare, as well as various other priorities. The annual appropriation for SSA’s limitation on administrative expenses (LAE) account provides nearly all of the agency’s administrative funding. The LAE account is composed of funds from the Social Security and Medicare trust funds for their share of administrative expenses, the general fund of the U.S. Treasury for SSI’s share of administrative expenses, and user fees paid to SSA for certain administrative activities. Additional appropriations from Congress provide funding for SSI program costs, research and demonstration projects, SSA’s Office of the Inspector General (OIG), and certain payments to the Social Security trust funds. SSA’s accounts are traditionally funded through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations bill. The FY2017 President’s budget request for SSA’s LAE account is $13.067 billion, which includes $1.819 billion for program integrity activities such as continuing disability reviews (CDRs) and SSI non-medical redeterminations. By comparison, the FY2016 appropriation for SSA’s LAE account was $12.162 billion, with $1.426 billion dedicated to program integrity work. On June 9, 2016, the Senate Committee on Appropriations approved its FY2017 LHHS appropriations bill by a vote of 29 to 1. The Senate bill would provide $12.482 billion for SSA’s LAE account, which is 4.5% less than the amount in the FY2017 President’s budget request but is 2.6% more than the amount enacted for FY2016. On July 14, 2016, the House Committee on Appropriations approved its FY2017 LHHS appropriations bill by a vote of 31 to 19. The House bill would provide $11.899 billion for SSA’s LAE account, which is 8.9% less than the amount in the FY2017 President’s budget request and is 2.2% less than the amount enacted for FY2016. On September 29, 2016, President Barack Obama signed into law the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act (H.R. 5325; P.L. 114-223), which contains the Continuing Appropriations Act, 2017 (Division C). The day before, H.R. 5325 was passed in the Senate by a vote of 72-26 and in the House by a vote of 342-85. The FY2017 continuing resolution (CR) provides continuing appropriations for 11 of the 12 annual appropriations bills (including the LHHS appropriations bill) through December 9, 2016. In general, discretionary accounts covered by the FY2017 CR are funded at the same rate and under the same conditions as they were in the FY2016 omnibus, minus an across-the-board (ATB) rescission of 0.496%. However, funding dedicated to SSA’s program integrity work is exempt from the ATB rescission, making the effective reduction to the total LAE account 0.438%. The funding level for the LAE account under the FY2017 CR is $12.109 billion. Over the past several years, Congress has increased the amount of funding provided to SSA for program integrity work. This increase has allowed the agency to process more CDRs and SSI redeterminations, resulting in additional net savings to the federal government. However, funding for non-program integrity work during this period has essentially remained flat in nominal (unadjusted) terms. According to SSA and others, recently enacted funding levels for non-program integrity work have contributed to agency delays in processing other workloads, such as pending disability cases at the hearing level of the administrative appeals process.

Oct 5, 2016

DHS Appropriations FY2017: Protection, Preparedness, Response, and Recovery

This report is part of a suite of reports that discuss appropriations for the Department of Homeland Security (DHS) for FY2017. It specifically discusses appropriations for the components of DHS included in the third title of the homeland security appropriations bill—the National Protection and Programs Directorate, the Office of Health Affairs, and the Federal Emergency Management Agency. Collectively, Congress has labeled these components in recent years as “Protection, Preparedness, Response, and Recovery.” The report provides an overview of the Administration’s FY2017 request for these components, and the appropriations proposed by the Senate and House appropriations committees in response. Rather than limiting the scope of its review to the third title of the bills, the report includes information on provisions throughout the bills and report that directly affect these components. Protection, Preparedness, Response, and Recovery is the second largest of the four titles that carry the bulk of the funding in the bill, and includes the bulk of grant funding provided by DHS. The Administration requested $5.69 billion in FY2017 net discretionary budget authority for components included in this title and $6.71 billion in specially designated funding for disaster relief—together representing 26.0% of the Administration’s $47.7 billion request for net discretionary budget authority and disaster relief funding for DHS. As part of the request, the Administration proposed consolidating the Office of Health Affairs (OHA), along with several other parts of DHS, into a new Chemical, Biological, Radiological, Nuclear, and Explosives Office, which would be funded in another title. The appropriations request was $718 million (11.2%) less than was provided for FY2016 in net discretionary budget authority. The proposed decrease in discretionary funding for the components in this title is more than double the total net decrease in adjusted net discretionary budget authority requested for the entire department. The largest budget decrease proposed was a $546 million (11.7%) reduction in net discretionary budget authority for the Federal Emergency Management Agency, largely driven by reductions in grant programs. Also contributing to the reduction in the request was its proposal to consolidate OHA (along with several other parts of DHS) into a new Chemical, Biological, Radiological, Nuclear, and Explosives Office, funded in Title IV. OHA had been funded at $125 million in Title III in FY2016. Senate Appropriations Committee-reported S. 3001 would have provided the components included in this title $6.58 billion in net discretionary budget authority. This would have been $898 million (15.8%) more than requested, and $180 million (2.8%) more than was provided in FY2016. S. 3001 included the requested disaster relief funding. House Appropriations Committee-reported H.R. 5634 would have provided the components included in this title $6.44 billion in net discretionary budget authority. This would have been $753 million (13.2%) more than requested, and $34 million (0.5%) more than was provided in FY2016. H.R. 5634 also included the requested disaster relief funding. On September 29, 2016, the President signed into law P.L. 114-223, which contained a continuing resolution that funds the government at the same rate of operations as FY2016, minus 0.496% through December 9, 2017. For details on the continuing resolution and its impact on DHS, see CRS Report R44621, Department of Homeland Security Appropriations: FY2017, which also includes additional information on the broader subject of FY2017 funding for DHS as well as links to analytical overviews and details regarding components in other titles. This report will be updated once the annual appropriations process for DHS for FY2017 is concluded.

Oct 5, 2016

Paris Climate Change Agreement to Enter into Force November 4

The Paris Agreement (PA), which addresses climate change through international cooperation, is set to take effect on November 4, 2016. With the ratifications by the European Union, seven EU member states, New Zealand, and India—along with earlier actions by the United States, China, and other countries—the threshold was passed for the treaty to enter into force: Entry into force occurs on the 30th day after at least 55 countries, representing at least 55% of officially reported greenhouse gas (GHG) emissions, deposit their ratifications, acceptances, or approvals with the United Nations treaty depositary. As of October 5, 2016, 72 governments (including the European Union) representing more than 56% of global GHG emissions had deposited their instruments. In all, 191 governments, including Russia, signed the PA; they do not become parties to it until they have deposited their instruments. The entry into force of the PA will occur just before the 22nd meeting, beginning November 7, of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC is the umbrella treaty under which the PA was negotiated. A Brief History of the Framework Climate Change Convention Following several international scientific assessments finding potential adverse impacts of rising human-related GHG emissions on the earth’s climate, nations responded by negotiating the UNFCCC as a treaty under international law. Its negotiators intended it to have legal force on the parties to the agreement (henceforth Parties). The UNFCCC anticipated that further, subsidiary protocols or other agreements would be required to achieve its objective to achieve, in accordance with the provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner. President George H. W. Bush signed the convention and the U.S. Senate provided its advice and consent to U.S. ratification in 1992 (S. Treaty Doc. No. 102-38). On March 21, 1994—the 90th day following the date of deposit of the 50th instrument of ratification or acceptance—the UNFCCC entered force for the United States and the other 52 countries that had ratified the treaty by that time. It now has near-universal membership with 197 Parties. Since that date, the terms of the UNFCCC have been binding on the United States under both international and domestic law. The United States implements the UNFCCC under existing statutes without passing new implementing legislation. The first subsidiary agreement was the 1997 Kyoto Protocol, entering into force in 2005, which the United States signed but did not ratify as it lacked sufficient support domestically. Because it contained a quantified GHG reduction target for the United States, the Kyoto Protocol would have required Senate approval in accordance with the terms of the Senate’s consent to ratify the UNFCCC. One reason for insufficient U.S. support was that the Kyoto Protocol contained GHG targets only for relatively high-income countries. This perpetuated a bifurcation between industrialized and developing countries that had become untenable in the 21st century: Most scientists and governments agree that achieving the UNFCCC’s objective requires concerted GHG emissions abatement by all major emitting countries. Besides concerns about effectiveness, many in the United States and elsewhere feared adverse impacts on economic competitiveness if some economies sought meaningful GHG reductions while others did not. The Paris Agreement Under the PA, all Parties will participate in a common GHG abatement framework with common guidance and international assistance and review. Some Parties are allowed flexibility in line with their capacities. The negotiators intended the PA to be legally binding on its Parties, though not all provisions in it are mandatory. Some are recommendations or collective commitments to which it would be difficult to hold an individual Party accountable. The PA is expected to supersede the Kyoto Protocol after 2020. President Barack Obama accepted the PA on behalf of the United States on August 29, 2016. It was handled as an executive agreement under U.S. law rather than a treaty, which would require the advice and consent of the Senate. While some Members of Congress supported this procedure, others pressed for the PA to be submitted to Congress for its consideration, with six resolutions introduced in the 114th Congress calling for such. To date, none has received further congressional action. More information about the PA is available in CRS Report R44609, Climate Change: Frequently Asked Questions about the 2015 Paris Agreement, by Jane A. Leggett and Richard K. Lattanzio.

Oct 5, 2016

Stafford Act Assistance for Public Health Incidents

This Insight provides a brief overview of Stafford Act declarations under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (hereinafter the Stafford Act—42 U.S.C. 5721 et seq.) and the types of assistance that could be authorized in response to public health incidents in general, and infectious disease incidents such as the Zika virus outbreak in particular. This Insight also provides examples of Stafford Act declarations that have been previously issued to address such incidents. Overview The Stafford Act authorizes the President to issue two types of declarations that could provide federal assistance to states and localities in response to a public health incident: a “major disaster declaration” or an “emergency declaration.” Major Disaster Declarations Major disaster declarations authorize a wide range of federal assistance to states, local governments, tribal nations, individuals and households, and certain nonprofit organizations to recover from catastrophic incidents. Major disaster declarations must be requested by the state governor or tribal leader. The Stafford Act defines a major disaster as: any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, or explosion, in any part of the United States, which in the determination of the President causes damage of sufficient severity and magnitude to warrant major disaster assistance under this chapter to supplement the efforts and available resources of states, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused thereby (42 U.S.C. §5122(2)). The list of events that qualify for a major disaster declaration is specific. There is no precedent for a major disaster declaration in response to a public health incident of any type, including infectious disease outbreaks, and it is unclear if such an incident would be eligible for a major disaster declaration. Major Disaster Declaration Assistance Assistance generally takes three forms: Public Assistance (PA), Individual Assistance (IA) and Hazard Mitigation Assistance (HMA). PA addresses essential needs of the state or tribe in response to an incident, including repairing damage to public infrastructure (public roads, buildings, etc.). IA helps families and individuals and can include temporary housing assistance and grants to address post-disaster needs (such as replacing clothing and furniture) as well as crisis counseling and disaster unemployment benefits. HMA provides the state with grant funding for state-identified mitigation projects. Emergency Declarations By comparison with a major disaster declaration, considerably less assistance is authorized under an emergency declaration. Emergency is defined more broadly than major disaster—which arguably may allow for greater eligibility of public health incidents. The Stafford Act defines an emergency as: any occasion or instance for which, in the determination of the President, federal assistance is needed to supplement State and local efforts and capabilities to save lives and to protect property and public health and safety, or to lessen or avert the threat of a catastrophe in any part of the United States (P.L. 93-288, 42 U.S.C. §5122(1)). Emergency declarations can be issued before an incident when a threat is detected (for example, before a hurricane makes landfall or a river crests) to supplement and coordinate local and state response efforts. As traditionally implemented, the Stafford Act, however, does not supplant or supersede other federal authorities directed at public health incidents, such as those exercised by the Secretary of Health and Human Services. Emergency Declaration Assistance Emergency assistance can include two forms of PA; debris removal and emergency protective measures. Most assistance related to public health incidents has been delivered through emergency protective measures, which includes activities that are necessary to reduce an immediate threat to life, public health, or safety. Some forms of IA can be made available through an emergency declaration. Emergency declarations do not include HMA assistance. Stafford Act Emergency Declarations for Public Health Incidents Since the 1960s, the Stafford Act has been used sporadically for public health incidents. Some examples include the 1962 Louisiana and Mississippi chlorine barge accident and the evacuation of the New York Love Canal Chemical site in 1978. In the case of Zika virus response, the government’s planning assumption is that there would not be a Stafford Act declaration. Below are examples of other emergency declarations for public health incidents since the 1990s. West Nile Virus: New York and New Jersey On October 11 and November 1, 2000, President Clinton issued emergency declarations for New York and New Jersey respectively to supplement state efforts to address the threat of the West Nile virus, a mosquito-borne virus. The assistance included state reimbursement of mosquito abatement eligible under the PA Program. These are the only instances of a Stafford Act declaration in response to an infectious disease incident. West Virginia Chemical Spill On January 10, 2014, President Obama issued an emergency declaration for the West Virginia chemical spill. The declaration helped deliver potable water and provided technical assistance to West Virginia State emergency management staff. Flint, Michigan Water Contamination On January 16, 2016, President Obama issued an emergency declaration for the State of Michigan for the Flint water contamination incident. The declaration provided water, water filters, water filter cartridges, water test kits, and other necessary related items. For More Information See CRS Report R43784, FEMA’s Disaster Declaration Process: A Primer, FEMA’s Disaster Declaration Process: A Primer; CRS Report R43990, FEMA’s Public Assistance Grant Program: Background and Considerations for Congress; and CRS Report R42702, Stafford Act Declarations 1953-2014: Trends, Analyses, and Implications for Congress, for a complete background and details about Stafford Act Declarations.

Oct 4, 2016

Poverty in the United States in 2015: In Brief

In 2015, approximately 43.1 million people, or 13.5% of the population, had incomes that fell below the official definition of poverty in the United States. These statistics represented a noticeable drop from the previous year, both in the number of poor, which had been 46.7 million in 2014, and the poverty rate (the percentage that were in poverty), which fell from 14.8%. The drop in the U.S. poverty rate was broad-based, with poverty lessening among many demographic groups. Families with a female householder and no spouse present (female-householder families) historically have had higher poverty rates than married-couple families and families with a male householder and no spouse present (male-householder families). This remained true in 2015, though all three family types experienced poverty rate declines. Poverty rates also fell for all three broad age categories: children under 18, working-age adults 18 to 64, and persons 65 years and older. Declines in poverty among the working-aged were driven by gains in the number working full-time year-round. In 2015, the working-age population grew by 1.0 million, but the number of full-time year-round workers (both poor and nonpoor) had a net gain of 2.3 million. While having a job reduced the likelihood of being in poverty, it did not guarantee that a person or his or her family would avoid poverty. Poverty rates fell among non-Hispanic whites, blacks, Hispanics, the American Indian and Alaska Native population, and Native Hawaiians and Other Pacific Islanders. No discernable change in poverty rates was detected for Asians. Twenty-three states experienced poverty rate declines from 2014 to 2015. Criticisms of the official poverty measure have inspired poverty measurement research and eventually led to the development of the Supplemental Poverty Measure (SPM). The SPM uses different definitions of needs and resources than the official measure. The measure of need used in the SPM includes food, clothing, shelter, utilities, and a bit extra for miscellaneous expenses, adjusted for geographic variations in costs. Unlike the official measure, the SPM uses after-tax income and includes in-kind benefits which generally help families with children; subtracts out work-related expenses which are often incurred by the working-age population; and subtracts medical out-of-pocket expenses, which are incurred frequently by people age 65 and older, from income. Under the SPM, the profile of the poverty population is slightly different than under the official measure. After rounding, the SPM was about 0.7 percentage points higher in 2015 than the official poverty rate.

Oct 4, 2016

The Hatch-Waxman Act: A Primer

Congress has for many years expressed interest in both medical innovation and the growing cost of health care. The Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, addressed each of these concerns. Through amendments to both the patent law and the food and drug law, the Hatch-Waxman Act established several practices intended to facilitate the marketing of generic pharmaceuticals while providing brand-name firms with incentives to innovate. The Hatch-Waxman Act established an expedited pathway for generic drug companies to obtain Food and Drug Administration (FDA) approval for their products. It also created a statutory “safe harbor” that shields generic applicants from charges of patent infringement until such time as they request approval to market their products from the FDA. The legislation also encourages brand-name firms to identify to the FDA any patents that cover their products. If they do so, the patents are listed in the “Orange Book”—a publication that identifies approved drugs and the intellectual property rights associated with them. When a generic firm seeks marketing approval from the FDA, it must account for any Orange Book-listed patents—typically by delaying marketing of its products until they expire, or by asserting that the patents are invalid or do not cover the generic’s proposed product. This latter assertion exposes the generic drug company to charges of patent infringement by the brand-name firm. The Hatch-Waxman Act also created periods of “regulatory exclusivity” that protect an approved drug from competing applications for marketing approval under specified conditions. These FDA-administered regulatory exclusivities typically operate alongside patents to block generic competition for a period of time. Generic firms may sell their own versions of brand-name drugs once these intellectual property rights expire. Several issues relating to the Hatch-Waxman Act remain of interest to Congress. One of them pertains to the legitimacy of “authorized generics,” pharmaceuticals that are marketed by or on behalf of a brand-named drug company, but are sold under a generic name. Although authorized generics may be pro-consumer in that they potentially increase competition and lower prices, some observers argue that such products may discourage independent generic firms both from challenging drug patents and from selling their own generic products. In addition, the Hatch-Waxman Act requires generic drug companies to prove that their proposed products are bioequivalent to the brand-name drug. Bioequivalence testing therefore requires that the generic firm use the brand-name product as a basis for comparison. Some generic firms have expressed concerns, however, that certain brand-name firms have refused to sell them samples of their drugs for use in developing competing products. Cases litigated under the auspices of the Hatch-Waxman Act have often ended with a settlement between the parties. In some of these cases, a generic firm agrees to neither challenge the brand-name company’s patents nor sell a generic version of the patented drug for a period of time. In exchange, the brand-name drug company agrees to compensate the generic firm, often with substantial monetary payments over a number of years. Because the payment flows counterintuitively, from the patent owner to the accused infringer, this compensation has been termed a “reverse” payment. While some observers believe that this outcome results from the structure of the Hatch-Waxman Act, others believe that these settlements are anti-competitive and harmful to consumers.

Sep 28, 2016

Encryption: Frequently Asked Questions

Encryption is a process to secure information from unwanted access or use. Encryption uses the art of cryptography to change information which can be read (plaintext) and make it so that it cannot be read (ciphertext). Decryption uses the same art of cryptography to change that ciphertext back to plaintext. Encryption takes five elements to work: plaintexts, keys, encryption methods, decryption methods, and ciphertexts. Data that are in a state of being stored or in a state of being sent are eligible for encryption. However, data that are in a state of being processed—that is being generated, altered, or otherwise used—are unable to be encrypted and remain in plaintext and vulnerable to unauthorized access. Purposes of Encryption Today, encryption is as ubiquitous as the devices that connect to the Internet. Encryption is a tool that information security professionals and end users alike can employ to ensure that the data in their custody remain confidential to only those who are authorized to access the data. It also helps to ensure that data is accessed as the authorized users intend, and not altered by a third party. Strong encryption helps users around the world trust the systems and data they are using, thereby facilitating the transactions that allow society to operate, such as economic activity, control of utilities, and government. This is important because the world has become more connected, and attackers have become more persistent and pervasive. It is difficult to overemphasize the extent to which Internet-connected systems are under attack. But the frequency with which data breaches are exposed in the news media can act as an indicator of the prevalence of active exploitations. Encryption is a tool used to thwart attempts to compromise legitimate activity and national security. Major Issues However, encryption has posed challenges to law enforcement and elements of national security. Strong encryption sometimes hinders law enforcement’s ability to collect digital evidence and investigate crimes in the physical world. As more real world transactions are conducted via digital means and adversaries continue to perpetrate crimes, this problem may become more pronounced. There are multiple sides to the encryption debate, but the sides generally reduce to two main parties: those who favor cryptosystems built as strongly as possible, and those who favor cryptosystems built with the opportunity for access if necessary and approved by a judicial authority. Encryption has created new issues for end users, as well. The technology was adopted rapidly, and users were not afforded the same opportunities to alter their habits as with the more steady adoption of technologies in the past. With the quick adoption of encryption, users left themselves more vulnerable to being unable to access or share their own data, for instance in the event that they forget the key or lack a way to share that key. One proposal to alleviate concerns over access to encrypted data by law enforcement includes mandating access for law enforcement while retaining strong encryption. However, this proposal undermines how encryption systems are built by introducing some extraordinary access into the system beyond the direct access of the user. This proposal carries risk as it creates an attack vector which adversaries of all types could seek to exploit. The increased risk raises the possibility that a persistent adversary will be able to circumvent the protections put in place to allow limited access and compromise the data and systems in use. In the 114th Congress, many activities have focused on encryption, including some legislative proposals.

Sep 28, 2016

Trends in Mandatory Spending: In Brief

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Sep 26, 2016

Introduction to U.S. Economy: Inflation

Sep 26, 2016

FERC Reviewing Its Approach to Market Power Determinations

On September 22, 2016, the Federal Energy Regulatory Commission (FERC or the Commission) issued a Notice of Inquiry (NOI) to explore whether it should revise its current approach to “identifying and assessing” market power in electric utility transactions. FERC defines market power as “[t]he ability of any market participant with a large market share to significantly control or affect price by withholding production from the market, limiting service availability, or reducing purchases.” FERC’s rationale for the NOI arose from the different ways market power can be analyzed under its rules. For example, under a Federal Power Act (FPA) Section 203 transaction, FERC reviews industry mergers and other transactions, while under a FPA Section 205 filing, FERC can consider requests to sell wholesale electric energy and related attributes at market-based rates. The Commission notes that while differences in the analyses may be appropriate, it wants to gather comments from the NOI on the question of whether “increased harmonization of the two analyses is warranted and feasible.” The NOI is also seeking comment on potentially simplifying FERC’s market power determinations by developing a de minimis test for certain transactions whereby “a full competitive analysis is unnecessary.” FERC is accepting comments on the NOI through November 28, 2016. Market Power and Market Manipulation It should be noted that the exercise of market power is differentiated from simply having market power. Electricity consumers are not harmed (i.e., by artificially high electricity rates) without the exercise of market power. In a competitive market, prices for electricity should essentially reflect the underlying forces of supply and demand. FERC authorizes sellers of wholesale electricity to charge market-based rates if they have demonstrated that they or their affiliates “lack or have adequately mitigated horizontal market power (percent of generation owned relative to total generation available in a market), and vertical market power (the ability to influence the cost of production for competitive electricity suppliers).” Alternatively, FERC may authorize cost-based rates for sellers of electricity in wholesale markets. Competitive electricity markets have enabled a variety of wholesale electricity products and services to facilitate the sale and transmission of power. (See CRS Report R43093, Electricity Markets—Recent Issues in Market Structure and Energy Trading.) These involve both physical transactions (i.e., electricity is generated, and sent to or taken off the grid), and financial transactions (i.e., the purchase and sale of electricity, and contracts for future delivery). Services have also arisen to provide transaction flexibility, and to manage (or hedge) the risks of various transactions. Some purchasers of electricity as a commodity do so solely for financial gain. The 2000-2001 Western energy crisis showed that electricity markets were (and are still) susceptible to market manipulation, especially when the motive is to make as much money as possible. With the passage of the Energy Policy Act of 2005 (P.L. 109-58), Congress gave FERC new authority to prevent manipulation in natural gas and electricity markets. FERC’s investigation of the Western energy crisis concluded that specifically Enron (and several other companies) had engaged in market manipulation. FERC views market manipulation as a “significant threat” to energy markets since energy consumers are likely to bear the burden of losses from such activity. Additionally, the noncompetitive activity can result in a loss of market transparency or otherwise impair the efficiency of energy markets, and thus FERC seeks to prevent fraud or market manipulation. Ten recent cases (brought by FERC in the 2012 to 2014 period) alleging energy market manipulation concluded in settlements with $448 million in civil penalties, and total “disgorgements” (i.e., refunds to rate payers) ordered of $243 million. The Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA or Dodd-Frank, P.L. 111-203) was passed largely as a response to the recent U.S. financial crisis. DFA initiated a number of reforms intended to strengthen oversight of the U.S. financial sector. Dodd-Frank addresses issues related to market manipulation from fraud, stating that “specific intent” or “recklessness” would trigger a rules violation. FERC for its part indicates that its focus is on anti-competitive “conduct that threatens market transparency.” Some might argue that the recent spate of settlements at FERC leads to a lack of clarity about what constitutes market manipulation, and what does not. It remains to be seen whether FERC will take the next step in the NOI toward improved clarity on market manipulation. A Role for Congress Some observers argue that the electric power industry is in the process of change due to regulatory and market pressures, resulting in industry mergers and acquisitions, and new entrants. (See CRS Report R43742, Customer Choice and the Power Industry of the Future.) Others argue that new technologies may lead to a distributed generation future for customers, possibly supported by utility base load generation and infrastructure. Given that the impetus for change is coming from drivers both within and from outside the industry, a question that may be asked is whether further changes to the Federal Power Act will be necessary. Under Section 203 of the FPA, FERC is also responsible for determining whether merger and corporate applications are consistent with the public interest, requiring the Commission to examine the merged entity’s effect on competition, rates and regulation, and the potential for cross-subsidization of entities (unless it is deemed consistent with the public interest). Congress has already initiated hearings into the evolution of the FPA with a special emphasis on electricity markets.

Sep 26, 2016

Global Food Security Act of 2016 (P.L. 114-195)

Sep 23, 2016

TPP: Investment Provisions

Sep 23, 2016

Overview of EPA Standards for “Coal Ash” Disposal

On October 19, 2015, U.S. Environmental Protection Agency (EPA) regulations applicable to the disposal of coal combustion residuals (CCR) went into effect. CCR, commonly known as “coal ash,” is generated when power plants burn coal to produce electricity. (See EPA’s Coal Ash website.) EPA promulgated the standards under its existing authorities in the Solid Waste Disposal Act (more commonly referred to by the title of its 1976 amendment, the Resource Conservation and Recovery Act, or RCRA). Codified at 40 C.F.R. 257 Part D, the regulations establish minimum national standards that must be implemented by owners and operators of new and certain existing landfills and surface impoundment ponds that contain CCR. Selected Requirements During its rulemaking process, EPA identified a number of risks associated with the improper management of CCR destined for disposal. Those risks primarily involve contaminants in CCR (e.g., lead, selenium, arsenic, and other heavy metals) leaching from the disposal site and migrating to ground water, contaminants blowing away from landfills when dried ash becomes airborne, and the catastrophic failure of surface impoundment ponds containing coal ash slurry. Requirements intended to address those risks include the following: Location restrictions prohibit locating facilities in certain areas that may pose increased risk (e.g., near an aquifer or in a wetland, fault area, or unstable area) and require certain existing disposal units to close if already located in such areas. Design criteria include requirements that existing surface impoundments meet certain structural integrity and liner design criteria and that certain unlined units contaminating groundwater would be subject to closure. Operating criteria include daily operating requirements that are necessary to keep CCR from moving off-site via fugitive dust, via run-off to surface water, or from a structural failure. Groundwater monitoring and corrective action specify when and how to establish a groundwater monitoring system and steps required if contamination is detected. Closure and post-closure care requirements must be met if a disposal unit closes, including mandates to close inactive CCR surface impoundments that still contain water and to either close or retrofit unlined surface impoundments. Additionally, the final rule set out recordkeeping and reporting requirements as well as the requirement for each facility to establish and post specific information to a publicly accessible website. The final rule also supports CCR recycling by distinguishing the differences between disposal and safe, beneficial use. To comply with the new standards, owner/operators of all new and existing landfills and surface impoundments are required to ensure that their facilities meet applicable requirements. While the rule became effective October 19, 2015, compliance deadlines for individual requirements may extend beyond that date. EPA established deadlines based on its determination of how long it would take owner/operators to implement them. For example, EPA assumed that most daily operating criteria could be met by the October 2015 effective date but that it could take years for owner/operators to determine whether location restrictions were met and to establish a groundwater monitoring program. Federal and State Roles in Implementation During its rulemaking process, EPA considered regulating CCR as a hazardous waste under its broad authorities in RCRA Subtitle C. Instead, EPA chose to promulgate the CCR regulations in accordance primarily with directives and authorities in RCRA Sections 1008(a)(3) and 4004(a). Those authorities pertain to RCRA’s prohibition on open dumping specified in Section 4005(a) included under RCRA Subtitle D. EPA has long claimed limited authority to enforce the open dumping prohibition and, hence, limited opportunity to enforce owner/operator compliance with applicable standards. As a result, EPA designed the CCR disposal standards with the expectation that facility owners/operators could self-implement them without the need to interact with a regulatory authority (e.g., EPA or a state regulatory agency). Under RCRA Section 4005(a), the open dumping prohibition is enforceable under RCRA’s citizen suit provisions. That is, EPA is authorized to promulgate but not directly enforce regulations needed to implement RCRA’s prohibition on open dumping. Given the limits to EPA’s authority to directly enforce the federal standards, the agency has encouraged states to adopt and implement them. By doing so, EPA argues, states could minimize risks associated with improper CCR disposal and limit the potential for energy producers in that state to be subject to citizen suits. More specifically, EPA encourages states to revise their existing Solid Waste Management Plans (SWMPs) to show how they would regulate CCR disposal. EPA approval of revised SWMPs signals the agency’s determination that a state’s SWMP meets or exceeds minimum federal requirements regulating CCR. Further, in its responses to Frequent Questions on the CCR rule, EPA stated that it anticipates that a facility that operates in accord with an [EPA-]approved SWMP will be able to positively use that fact in a citizen suit brought to enforce the federal criteria. A court will likely accord substantial weight to the fact that a facility is operating in accord with an EPA-approved SWMP. That is, in EPA’s opinion, facilities in states with EPA-approved programs to regulate CCR disposal in accordance with federal standards would be less vulnerable to citizen suits than facilities in states that do not have EPA-approved programs. As required under RCRA Section 4005(b), to assist states in complying with RCRA’s prohibition on open dumping, EPA is required to establish an inventory of open dumps. When EPA finalized the CCR disposal requirements, the agency began to prepare a draft initial inventory of utilities that appear to be operating in violation of the CCR disposal standards. (See EPA's website listing the draft initial open dump inventory.) To date, seven facilities in six states and territories are listed on the open dump inventory. At this point, it is uncertain how the data gathered by EPA might be used in possible citizen suits.

Sep 23, 2016

Digital Health Information and the Threat of Cyberattack

Sep 19, 2016

Military Construction: FY2017 Appropriations

Military construction for active and reserve components of the armed forces, military family housing construction and operations, the U.S. contribution to the NATO Security Investment Program, military base closures and realignment actions, and the military housing privatization initiative will be funded through Title I and Title IV of the FY2017 Military Construction, Veterans Affairs, and Related Agencies Appropriations Act. The act is associated with three separate bill numbers: H.R. 4974, S. 2806, and H.R. 2577. For FY2017, the President requested $7.44 billion in new budget authority for regular (base budget) military construction and family housing activities and an additional $172.5 million for Overseas Contingency Operations (OCO) construction for a total of $7.62 billion in new budget authority. The bill’s conference committee recommended $7.73 billion in the base budget and $172.0 million in OCO funding for a total of $7.90 billion in new budget authority. With additional funds available through the rescission of prior-year appropriations, Congress could make available up to $8.03 billion in base funding and $172.0 million in OCO appropriations for a total military construction appropriation of $8.21 billion for FY2017. The FY2017 Military Construction, Veterans Affairs, and Related Agencies Appropriations Act originated in the House as H.R. 4974, introduced on April 15, 2016. A similar bill, S. 2806, was introduced in the Senate on April 18, 2016. On May 19, 2016, the Senate combined the versions of the Transportation, Housing and Urban Development (T-HUD), Military Construction and Veterans Affairs (MILCON/VA), and Zika Response and Preparedness appropriations bills into H.R. 2577 (a T-HUD appropriations bill for FY2016 that the House had passed in June, 2015), passed the amended bill, and sent it to the House. The House substituted its own amendment in three divisions (Division A: MILCON/VA, Division B: Zika Response Appropriations, and Division C: Zika Vector Control), removing the T-HUD portion for H.R. 2577, passed the bill, and requested a conference. The conference met on June 15, 2016, and filed its report (H.Rept. 114-640) the next day. The conference bill contained four divisions: (1) Division A: MILCON/VA; (2) Division B: Zika Response and Preparedness Appropriations; (3) Division C: Zika Vector Control; and (4) Division D: Rescission of Funds. The House agreed to the report on June 23, 2016. Further action in the Senate is pending.

Sep 19, 2016

Corporate Tax Integration and Tax Reform

In January 2016, Senator Orrin Hatch, chairman of the Senate Finance Committee, announced plans for a tax reform that would explore corporate integration. Corporate integration involves the elimination or reduction of additional taxes on corporate equity investment that arise because corporate income is taxed twice, once at the corporate level and once at the individual level. Traditional concerns are that this system of taxation is inefficient because it (1) favors noncorporate equity investment over corporate investment, (2) favors debt finance over equity finance, (3) favors retained earnings over dividends, and (4) discourages the realization of gains on the sale of corporate stock. Increasingly, international concerns such as allocation of investment across countries, repatriation of profits earned abroad, shifting profits out of the United States and into tax havens, and inversions (U.S. firms using mergers to shift headquarters to a foreign country) have become issues in any tax reform, corporate integration included. This report first examines the four traditional efficiency issues by comparing effective tax rates. These estimates suggest that there is little overall difference between corporate and noncorporate investment or even favorable treatment of corporations, for several reasons. A larger share of corporate assets benefits from tax preferences. Moreover, only a quarter of shares in U.S. firms is held by taxable individuals; the remainder is held by tax-exempt and largely tax-exempt pension and retirement accounts, nonprofits, and foreigners. Additionally, tax rates on individual dividends and capital gains are lower than ordinary rates. However, effective tax rates across assets differ markedly, with intangible assets most favored and structures least favored. Debt is treated favorably in both the corporate and noncorporate sectors, but more so in the corporate sector, so that the total stock of assets in the corporate sector is taxed less heavily than in the noncorporate sector when both debt and equity are considered. The distortion between debt and equity finance is large in each sector, with negative tax rates for debt finance in many cases, while differences in taxes affecting dividend payout choices or realization of capital gains on stock appear to be small because of low tax rates. The report outlines several approaches to integration. Full integration would address both dividends and retained earnings. One approach would tax on a partnership basis by allocating income to shareholders and using the firm to withhold taxes. Credits for withheld taxes would be provided to shareholders, and credits could be made nonrefundable for tax-exempt and foreign shareholders. A different full integration approach would eliminate shareholder taxes and tax only at the firm level. A third would tax at the shareholder level and not the firm by imposing ordinary rates and taxing not only dividends and realized capital gains but also unrealized gains by marking shares to market prices (i.e., mark-to-market). Partial integration focuses on dividends and could provide either a dividend deduction by the firm (with a withholding tax and credits) or a dividend exclusion to the shareholder. Disallowing interest deductions in full or in part could be combined with most proposals. The report compares these proposals with respect to impact on revenue, administrative feasibility, and effects on both traditional and international tax choices. Shareholder allocation or deductions with refundable credits produce relatively large revenue losses, as does mark-to-market. Nonrefundability and making modifications in mark-to-market can substantially reduce these revenue losses. Most proposals would have modest efficiency gains, and some would modestly increase efficiency losses. Mark-to-market would tax economic income and potentially produce a number of efficiency gains but may not be feasible on administrative grounds. Disallowing or restricting deductions for interest would lead to efficiency gains on a number of margins and provide revenue to help achieve revenue-neutral reforms.

Sep 16, 2016

FY2017 Defense Spending Under an Interim Continuing Resolution (CR): In Brief

Defense budget experts began discussing the likelihood of a continuing resolution (CR) to start FY2017 early in the second session of the 114th Congress. As the start of fiscal year 2017 (FY2017) approaches, congressional consideration of a CR to fund the federal government through the opening months of the fiscal year is widely anticipated. This report provides a basic discussion of interim CRs and highlights some specific issues for the Department of Defense (DOD) under a CR. It also provides a brief look at selected FY2017 defense programs that could be affected by a CR. As with regular appropriations bills, Congress can draft a CR to provide funding in many different ways. Under current practice, a CR is an appropriations law that provides either interim or full-year funding by referencing a set of established funding levels for the projects and activities that it funds (or covers). Such funding may be provided for a period of days, weeks, or months, and may be extended through further continuing appropriations until regular appropriations are enacted, or until the fiscal year ends. In recent fiscal years, the referenced funding level on which interim or full-year continuing appropriations has been based was the amount of budget authority that was available under specified appropriations acts from the previous fiscal year. CRs may also include provisions that enumerate exceptions to the duration, amount, or purposes for which those funds may be used for certain appropriations accounts or activities. Such provisions are commonly referred to as anomalies. The purpose of anomalies is to preserve Congress’s constitutional prerogative to provide appropriations in the manner it sees fit, even in instances when only interim funding is provided. For affected agencies, CRs can create hurdles that would not exist under a full-year appropriation. For example, an interim CR may prohibit an agency from initiating or resuming any project or activity for which funds were not available in the previous fiscal year (i.e., prohibit new starts). In addition, Congress may include provisions in interim CRs to limit the expenditure of appropriations for programs that spend a relatively high proportion of their funds in the early months of a fiscal year. Also, if a CR provides funds at the rate of the prior year’s appropriation, an agency may be provided additional (even unneeded) funds in one account, such as research and development, while leaving another account, such as procurement, underfunded or lacking. This is sometimes referred to as a problem with the color of money. By its very nature, an interim CR can prevent agencies from taking advantage of efficiencies through bulk buys and multi-year contracts. It can foster inefficiencies by requiring short-term contracts that must be reissued once additional funding is provided, requiring additional paperwork and overhead in contracting actions. DOD has started the fiscal year under a CR for 11 of the last 16 years and every year since FY2010. The amount of time DOD has operated under CR authorities during the year has increased in the last 6 years and equates to a total of more than 26 months since 2010. This has caused DOD to adapt its programming activities to a truncated budget year. For FY2017, the Defense Department requested $523.9 billion in discretionary funding, as compared to the FY2016 enacted level of $521.7 billion. The Overseas Contingency Operations (OCO) request for FY2017 ($58.8 billion) is relatively close to the FY2016 enacted level ($58.6 billion). While these amounts may seem comparatively small (0.4% and 0.3% respectively), the variance in FY2016 enacted and FY2017 requested amounts by appropriation account may be significant under a CR. For example, DOD is seeking an $8.4 billion increase in Operation and Maintenance (O&M) funding from FY2016 to FY2017. O&M appropriations fund critical readiness functions such as individual, unit, and collective training, flying hours, ship steaming days, depot maintenance, and civilian personnel pay. This funding increase would likely require an anomaly in order for it to occur as requested under a CR. Moreover, the DOD Comptroller expects that many DOD programs and activities would be affected by enactment of an interim CR through prohibitions on new starts, limitations on production quantity increases, and color of money issues, if such issues are not specifically addressed through anomalies.

Sep 16, 2016

Zimbabwe: Current Issues and U.S. Policy

Zimbabwe, a southern African country of about 14 million people, gained independence from the United Kingdom in 1980 after a lengthy armed struggle against white minority rule. The armed struggle, and the enduring effects of land allocations that favored whites, have profoundly shaped post-independence politics, as have the nationalist economic policies of the ruling Zimbabwe National Union-Patriotic Front (ZANU-PF), led by long-time president Robert Mugabe. Land seizures, state-centric economic policies, and persistent political turmoil under Mugabe led to a severe economic contraction between 2000 and 2009, which contributed to ZANU-PF’s first-ever loss of its parliamentary majority in elections in 2008. A subsequent political impasse over the contested election results led to dialogue and the creation in 2009 of a Government of National Unity (GNU) joining ZANU-PF and key opposition parties. A politically tense period of GNU governance led to an economic recovery, some political reforms, and the enactment of a new constitution. Elections in 2013, which featured reported irregularities, gave ZANU-PF a strong parliamentary majority, extended Mugabe’s tenure, and ended the GNU. Economic growth has since markedly decreased and intra-ZANU-PF splits and opposition to ZANU-PF’s economic policy and governance practices is growing, as indicated by a wave of protests in 2016. Congress, citing governance and human rights concerns, has enacted legal prohibitions on aid to Zimbabwe’s central government and on U.S. support for multilateral loans to Zimbabwe’s government, under the Zimbabwe Democracy and Economic Recovery Act of 2001 (ZDERA, P.L. 107-99) and foreign aid appropriations measures. Successive U.S. Administrations have condemned human rights violations, breaches of the rule of law, and undemocratic actions by Mugabe and top ZANU-PF officials. U.S. officials have imposed targeted economic and travel sanctions on individuals and firms identified as committing or abetting such actions. Despite such restrictions, the United States funds a relatively diverse set of assistance programs in Zimbabwe that are implemented by nongovernment actors. According to the FY2017 State Department foreign aid budget request, this aid seeks to support a “transition to a democracy” and “human rights, equitable economic growth, political and electoral reform,” leading to “transparent, accountable, and effective” political and economic governance. Aid also addresses humanitarian needs. Bilateral aid allocations totaled $172 million in FY2015 and an estimated $152 million in FY2016; $160 million was requested for FY2017. Health programs are the largest area of aid, and focus on HIV/AIDS, tuberculosis, and malaria. Regional aid also benefits Zimbabwe. Relevant bills in the 114th Congress include H.R. 5912 and S. 3117, the House and Senate appropriations bills for the Department of State, foreign operations, and related programs. The question of who may succeed President Mugabe, who turned 92 years old in early 2016, presents an immediate and pressing challenge for Zimbabwe’s political system and people, as well as for U.S. policymakers. Potential succession challenges could generate political and economic instability, with possible regional humanitarian and migration implications. Additional issues of long-standing concern to U.S. policymakers include what most see as a need for economic reforms to enable private sector growth, improved macroeconomic governance, and reform of land tenure and property rights. An ongoing Zimbabwean government effort to clear its debt arrears with international financial institutions in order to access new loans, for which U.S. support remains restricted under ZDERA and appropriations laws, has recently drawn U.S. attention. Also of interest to some U.S. officials are wildlife protection efforts in Zimbabwe, which came under intense international criticism after a U.S. trophy hunter killed a rare black-maned lion named Cecil near a game reserve in 2015. The United States has taken steps to promote wildlife conservation in Zimbabwe, including by placing temporary bans on the import of sport-hunted elephant trophies and imposing permit requirements on lion imports.

Sep 15, 2016

Behavioral Health Among American Indian and Alaska Natives: An Overview

Behavioral health problems (e.g., mental disorders, substance use disorders, and suicide) among the American Indian and Alaska Native (AI/AN) population have been the subject of multiple congressional hearings, introduced bills, and Administration initiatives in recent years. Research on AI/AN behavioral health demonstrates three key points: Relative to the general U.S. population, the AI/AN population has (1) a high prevalence of risk factors for behavioral health problems, (2) a high prevalence of behavioral health problems, and (3) limited access to care for behavioral health problems. Improving behavioral health among the AI/AN population is a challenging task that requires collaboration among federal agencies, tribal governments, other organizations, communities, and individuals, especially in a resource constrained budget environment. Within the U.S. Department of Health and Human Services (HHS), two key agencies conduct activities designed to improve AI/AN behavioral health: the Indian Health Service (IHS) and the Substance Abuse and Mental Health Services Administration (SAMHSA). IHS is the lead federal agency on health care (including behavioral health care) among the AI/AN population. SAMHSA is the lead federal agency on behavioral health care among the general population (including the AI/AN population). This report describes IHS and SAMHSA programs (listed below) that specifically target behavioral health in the AI/AN population; it does not include every IHS or SAMHSA program available to support behavioral health in the AI/AN population. IHS Programs Fetal Alcohol Spectrum Disorders Integrated Substance Abuse Treatment in Primary Care Methamphetamine and Suicide Prevention Initiative Youth Regional Treatment Centers Behavioral Health Integration with Primary Care Telebehavioral Health and Workforce Development Zero Suicide Initiative SAMHSA Programs Systems of Care Circles of Care Garrett Lee Smith (GLS) Youth Suicide Prevention—Campus GLS Youth Suicide Prevention—State/Tribal Native Connections Project LAUNCH Strategic Prevention Framework–Partnerships for Success Drug Courts Understanding the relationship between AI/AN behavioral health problems and related federal programs may help policymakers consider policy options affecting the AI/AN population. Policymakers could amend, eliminate, or create programs; require different types of coordination or information; and/or provide additional oversight.

Sep 15, 2016

Russia’s Parliamentary Elections

On September 18, 2016, Russians will go to the polls to elect the State Duma, the lower house of parliament. Russia’s last parliamentary elections in December 2011 triggered a wave of protests against electoral fraud and heralded the rise of a revitalized opposition against the government of President Vladimir Putin. Five years later, expectations of democratic change have subsided. The ruling United Russia (UR) party is poised to win an even larger majority than before, with most other seats going to loyal opposition parties. Parties genuinely in opposition to the government are expected to win only a handful of seats. Anticipated Results: More of the Same Russians are electing 450 deputies to the Duma. Elections also will be held for a number of regional and local councils, as well as for some regional heads. Half the Duma deputies will be elected by proportional representation and half in first-past-the-post single-member districts. The 14 parties running are those that received at least 3% of the vote in the last election or hold at least one seat in a regional council (other parties technically could register after collecting 200,000 signatures, but no such registrations were approved). The ruling UR party is expected to secure a decisive victory—possibly even a two-thirds majority (it currently enjoys a simple majority). The party traditionally polls lower than President Putin, who does not formally lead the party, but it has benefited from a surge in patriotic sentiment unleashed by Russia’s annexation of Crimea, Russia’s so-called defense of pro-Russian populations in eastern Ukraine, and appeals for national solidarity in the face of Western criticism. UR also has experienced a certain renewal in advance of elections; party primaries promoted the rise of many candidates new to national politics and eliminated a number of sitting deputies. The Loyal Opposition Besides UR, the three parties expected to gain the most seats are all currently in parliament and are known as the loyal opposition. These parties criticize the government, if not President Putin, but typically support its legislative initiatives. Two are longtime fixtures of Russian politics: the Communist Party (KPRF, led by Gennadiy Zyuganov) and the right-nationalist Liberal Democratic Party (LDPR, led by Vladimir Zhirinovsky). The third, A Just Russia (led by Sergei Mironov), is a center-left party that flirted with the opposition in 2011-2012 before returning to the fold (and expelling some of its members who remained in opposition). In recent polls, LDPR and KPRF enjoy around 15% support from among likely voters, and A Just Russia is expected to have enough support to clear a 5% electoral threshold to enter parliament. The Opposition: Weak and Fractured Genuine opposition parties are expected to receive only a handful of seats. Only two, neither of which is in parliament, are eligible to compete: Yabloko (identified with its former longtime chairman Grigory Yavlinsky) and PARNAS (led by former Prime Minister Mikhail Kasyanov and, previously, Boris Nemtsov, slain in 2015). Both parties consider themselves European-style liberal democratic parties, though other parties have criticized PARNAS for including at least one populist firebrand near the top of its list. Each party has a relatively low level of support in the polls (less than 3%). In addition, 18 single-member races are being contested by candidates representing the Open Russia movement, founded by former oil magnate Mikhail Khodorkovsky, who served 10 years in prison on charges deemed by the opposition and most observers to be politically motivated. Another prominent opposition leader, anticorruption activist and 2013 Moscow mayoral candidate Alexei Navalny, is barred from running due to two criminal convictions. Navalny supporters and most outside observers deem the convictions politically motivated (Navalny received suspended sentences for both convictions). Navalny’s Party of Progress had its registration revoked last year, ostensibly for technical reasons, and is unable to participate in the election. Opposition fragmentation is an issue. Opposition leaders protect their individual brands and fear these brands could be damaged by formal unification with other parties (electoral blocs have been banned since 2005). Last year, Navalny’s Party of Progress joined with PARNAS and others in a “Democratic Coalition,” which was to run candidates under the PARNAS banner. The coalition soon ran into difficulties, however. It was barred from registering candidates in September 2015 regional elections, and this spring the coalition finally collapsed after PARNAS leader Kasyanov was caught in a scandal involving hidden video footage of an affair with a party colleague. Increased Government Control Since the last election period, the Russian government has taken measures that are likely to strengthen the victory of UR and minimize opposition gains across the country. In addition to the government’s tight control over the registration process, state-controlled media and government officials have subjected opposition leaders to a barrage of negative publicity, branding them as agents of the West. Restrictions on mass demonstrations have tightened. A centrally controlled redistricting process has led to the carving up of urban centers that lean toward the opposition. UR’s financial and administrative resources across the countryside are expected to help the party win more seats via single-member races than it would in a purely proportional contest. The government also has used its “foreign agent” law to undermine the reputation of civil society actors that could influence public perceptions of elections. In 2014, Russia’s main domestic election monitoring organization, Golos, was the first organization classified as a foreign agent. In early September 2016, Russia’s most reputable polling organization, the Levada Center, was also branded a foreign agent. Stable for Now Russia’s parliamentary elections are not likely to lead to a new round of democratic revival. Russia’s ongoing economic difficulties have begun to lead to small-scale protests across the country. For now, however, these protests do not show signs of catalyzing any new kind of political movement. Meanwhile, within the Russian government, the trend is less one of accommodating a broader array of political elites (as the UR primaries would suggest) than tightening President Putin’s direct control over a hierarchy of loyal followers. Changes to the system may be occurring, but mostly from within.

Sep 15, 2016

The Financial CHOICE Act in the 114th Congress: Policy Issues

The Financial CHOICE Act (FCA; H.R. 5983), sponsored by Chairman Jeb Hensarling, was ordered to be reported by the House Committee on Financial Services on September 13, 2016. The bill is a wide-ranging proposal with 11 titles that would alter many parts of the financial regulatory system. Much of the FCA is in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act; P.L. 111-203), a broad package of regulatory reform legislation that initiated the largest change to the financial regulatory system since at least 1999. Many of the provisions of the bill would modify or repeal provisions from the Dodd-Frank Act, although others would address long-standing or more recent issues. This report highlights major proposals included in the bill but is not a comprehensive summary. In general, the changes proposed by the FCA can be divided into two categories: (1) changes to financial policies and regulations and (2) changes to the regulatory structure and rulemaking process. Major policy-related changes proposed by the FCA include the following: Leverage Ratio—allowing a banking organization to choose to be subject to a higher, 10% leverage ratio in exchange for being exempt from risk-weighted capital ratios, liquidity requirements, and other regulations. Regulatory Relief—providing regulatory relief throughout the financial system to banks, consumers, and capital market participants, including by repealing the Volcker Rule, Durbin Amendment, and fiduciary rule. Too Big To Fail—repealing the designation of systemically important financial institutions and emergency assistance and replacing an option for winding down systemic institutions with a new chapter in the Bankruptcy Code that is tailored to financial firms. The FCA also includes structural and procedural changes that affect the balance between regulator independence from and accountability to Congress and the judiciary, including Leadership—modifying the leadership structure of agencies with a single head to be bipartisan, multimember commissions. Funding—subjecting regulators that currently set their own budgets to the traditional congressional appropriations process. Rulemaking—requiring regulators to perform more detailed cost-benefit analysis when issuing new rules and to use cost-benefit analysis to review existing rules, as well as requiring congressional approval for a major rule to come into effect. Judicial Review—requiring courts to apply a heightened judicial review standard for agency actions taken by financial regulators rather than applying varying levels of deference to the agencies’ interpretations of the law. Enforcement—increasing the maximum civil penalties that could be assessed for violations of certain banking and securities laws and restraining certain agency enforcement powers. CFPB—renaming the Consumer Financial Protection Bureau as the Consumer Financial Opportunity Commission and modifying its powers, leadership, mandate, and funding.

Sep 14, 2016