Archive for the ‘Congressional Research Service’ Category

CRS — Pilotless Drones: Background and Considerations for Congress Regarding Unmanned Aircraft Operations in the National Airspace System

September 18, 2012 Comments off

Pilotless Drones: Background and Considerations for Congress Regarding Unmanned Aircraft Operations in the National Airspace System (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

Growing interest in the use of unmanned aerial vehicles (UAVs), particularly for homeland security and law enforcement applications, has spurred considerable debate over how to accommodate these unmanned aircraft and keep them safely separated from other air traffic. Additionally, the use of these pilotless aircraft, popularly referred to as drones, for aerial surveillance and law enforcement purposes has raised specific concerns regarding privacy and Fourth Amendment rights and potential intrusiveness. These issues have come to the forefront in policy debate in response to provisions in the FAA Modernization and Reform Act of 2012 (P.L. 112-95) that require the Federal Aviation Administration (FAA) to begin integrating unmanned aircraft into the national airspace system by the end of FY2015.

While drones have been used extensively by the military and small radio-controlled model aircraft have been around for more than 50 years, advances in more complex vehicle controls and imaging sensor capabilities are spurring public sector and commercial interest in unmanned aircraft for a variety of purposes, including law enforcement, homeland security, aerial imaging, and scientific research. FAA currently approves public entities (such as federal agencies, public universities, and local police departments) to operate UAVs on a case-by-case basis, but growing interest is making this approach increasingly untenable. Moreover, commercial users are seeking authorization to fly drones, but so far FAA has only allowed test and demonstration flights by manufacturers. FAA faces a number of challenges to address anticipated growth in demand for civilian UAV operations and develop regulations governing the certification and operation of unmanned aircraft systems in domestic airspace.

Congress has generally supported efforts to integrate unmanned aircraft into the national airspace system and foster growth in the unmanned aircraft industry. It enacted extensive provisions in P.L. 112-95 that are designed to streamline and accelerate the operation of unmanned aircraft in domestic airspace by both public entities and commercial operators. Notably, that law requires FAA to issue regulations pertaining to the operation of small UAVs (weighing less than 55 pounds) and requires FAA to create and implement a plan to begin the integration of unmanned aircraft into the national airspace system by the end of FY2015. Toward that goal, the act requires FAA to establish six test ranges throughout the United States to study unmanned aircraft integration technical issues.

The act establishes an ambitious timeline for FAA to grapple with and resolve a number of complex issues regarding the safety and security of unmanned aircraft operations. Furthermore, aircraft operators have expressed specific concerns that drone operations should not result in airspace restrictions or other measures that could limit accessibility to the national airspace system.

In addition to these various challenges, the privacy implications and potential intrusiveness of drone operations have emerged as a significant issue before Congress. Civil liberties and privacy groups have cautioned that voluntary industry measures, including a code of conduct to, among other things, respect privacy, are inadequate to assure that drones will not be misused in ways that could infringe upon the privacy of individuals and intrude upon their daily activities. Moreover, FAA’s authority over specific uses of civilian unmanned aircraft appears limited so long as safety and national security are not compromised, raising additional concerns that future drone operations could lead to complaints and lawsuits over noise, intrusiveness, and interference with the use and enjoyment of public or private property.

CRS — Whistleblower Protections Under Federal Law: An Overview

September 18, 2012 Comments off

Whistleblower Protections Under Federal Law: An Overview (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

Legal protections for employees who report illegal misconduct by their employers have increased dramatically since the late 1970s when such protections were first adopted for federal employees in the Civil Service Reform Act of 1978. Since that time, with the enactment of the Whistleblower Protection Act of 1989, Congress has expanded such protections for federal employees. Congress has also established whistleblower protections for individuals in certain private-sector employment through the adoption of whistleblower provisions in at least 18 federal statutes. Among these statutes is the Sarbanes-Oxley Act, the FDA Food Safety Modernization Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

In general, claims for relief under the 18 federal statutes follow a similar pattern. Complaints are typically filed with the Secretary of Labor, and an investigation is conducted. Following the investigation, an order is issued by the Secretary, and a party aggrieved by the order is generally permitted to appeal the Secretary’s order to a federal court. However, because 18 different statutes are involved in prescribing whistleblower protections, some notable differences exist. For example, under the Department of Defense Authorization Act of 1987, individuals employed by defense contractors who engage in whistleblowing activities file complaints with the Inspector General rather than the Secretary of Labor. Under some of the statutes, including the Commercial Motor Vehicle Safety Act and the Dodd-Frank Act, the Secretary’s preliminary order will become a final order if no objections are filed within a prescribed time period.

This report provides an overview of key aspects of the 18 selected federal statutes applicable to individuals in certain private-sector industries. It focuses on the protections provided to employees who believe they have been subject to retaliation, rather than on how or where alleged misconduct should be disclosed. In addition, the report also includes an overview of the Whistleblower Protection Act. While state law may also provide whistleblower protections for employees, this report focuses only on the aforementioned federal statutory provisions.

CRS — An Overview of the “Patent Trolls” Debate

September 10, 2012 Comments off

An Overview of the "Patent Trolls" Debate (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

Congress has recently demonstrated significant ongoing interest in litigation by “patent assertion entities” (PAEs), which are colloquially known as “patent trolls” and sometimes referred to as “non-practicing entities” (NPEs). The PAE business model focuses not on developing or commercializing patented inventions but on buying and asserting patents, often against firms that have already begun using the claimed technology after developing it independently, unaware of the PAE patent. PAEs include not only freestanding businesses but patent holding subsidiaries, affiliates, and shells of operating companies that want to participate in the PAE industry and/or a new means of countering competitors. The proliferation of PAEs was among the central factors raised in support of the most recent patent reform legislation, the Leahy-Smith America Invents Act of 2011 (AIA). However, the AIA contains relatively few provisions that arguably might impact PAEs, apparently because of lively debate over what, if anything, should be done about them. Recently, the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act of 2012 (H.R. 6245) was introduced in an effort to affect the number of lawsuits filed by PAEs.

PAEs emerged alongside the burgeoning tech industry around the turn of the 21st century and gained notoriety with lawsuits claiming exclusive ownership of such ubiquitous technologies as wireless email, digital video streaming, and the interactive Web. They have had the attention of Congress, the press, and the public since at least 2006, when a successful PAE suit almost caused the shutdown of BlackBerry wireless service. Such victories in court are rare for PAEs; they lose 92 percent of merits judgments. But few cases make it that far. The vast majority of defendants settle because patent litigation is risky, disruptive, and expensive, regardless of the merits; and many PAEs set royalty demands strategically well below litigation costs to make the business decision to settle an obvious one. For most PAEs, the costs of litigating and losing are more than offset by the licensing fees they can gain by demonstrating their tenacity to future defendants.

PAEs generated $29 billion in revenues from defendants and licensees in 2011, a 400 percent increase over $7 billion in 2005, and some researchers suggest these costs are primarily deadweight, with less than 25 percent flowing to support innovation and at least that much going towards legal fees. Critics assert that they undermine the purposes of patent law—promoting innovation by providing incentives to invest in development and commercialization of inventions—and injure companies that play a vital role in the American economy. However, defenders of PAEs argue that they actually promote invention by adding liquidity options, managing risk, and compensating small inventors. The Federal Trade Commission and several leading scholars suggest that these benefits exist but are significantly less than the costs they impose. What remains unclear is the extent of imbalance between costs and benefits and whether Congress could recalibrate it to advance the goals of patent law while avoiding unintended consequences.

This report reviews the current debate and controversy surrounding PAEs and their effect on innovation, examines the reasons for the rise in PAE litigation, and explores the legislative options available to Congress if it decides that these are issues that should be addressed.

CRS — Researching Current Federal Legislation and Regulations: A Guide to Resources for Congressional Staff

September 10, 2012 Comments off

Researching Current Federal Legislation and Regulations: A Guide to Resources for Congressional Staff (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

This report is designed to introduce congressional staff to selected governmental and nongovernmental sources that are useful in tracking and obtaining information federal legislation and regulations. It includes governmental sources such as the Legislative Information System (LIS), THOMAS, the Government Printing Office’s Federal Digital System (FDsys), and U.S. Senate and House websites. Nongovernmental or commercial sources include resources such as HeinOnline and the Congressional Quarterly (CQ) websites. It also highlights classes offered by the Congressional Research Service (CRS) and the Library of Congress Law Library.

This report will be updated as new information is available.

CRS — NFIB v. Sebelius: Constitutionality of the Individual Mandate

September 10, 2012 Comments off

NFIB v. Sebelius: Constitutionality of the Individual Mandate (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

In one of the most highly anticipated decisions in recent years, the Supreme Court released its ruling regarding the constitutionality of the Affordable Care Act (ACA) in June 2012. In NFIB v. Sebelius, the Court largely affirmed the constitutionality of ACA, including its individual mandate provision. In a move that was unexpected to many, the Court upheld the mandate as a valid exercise of Congress’s taxing power, but not its Commerce Clause power.

First, Chief Justice Roberts, in a controlling opinion, found that the Commerce Clause does not provide Congress with the authority to enact the individual mandate. While the Chief Justice acknowledged that Congress’s authority to regulate interstate commerce is quite broad, he also pointed out that Congress had never attempted to use this power to make individuals buy an undesired product. The Chief Justice further noted that the language of the Clause (i.e., the power to regulate interstate commerce) reflects the idea that there must be something to regulate in the first place (i.e., some type of “activity”). The problem with the individual mandate, as indicated by the Chief Justice, is that it “does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product on the ground that their failure to do so affects interstate commerce.” The Chief Justice also noted that if the mandate were permissible under the Commerce Clause, a mandatory purchase could be permitted to solve almost any problem, thus agreeing with those who had raised concerns about a lack of a limiting principle—the idea that if Congress could require the purchase of health insurance, it could require Americans to purchase anything. While no other Justice joined the opinion of Chief Justice Roberts with respect to the Commerce Clause analysis, four Justices issued a dissenting opinion that reached the same conclusion based on somewhat similar reasoning.

The Chief Justice then found the mandate provision to be a valid exercise of Congress’s taxing power. For this portion of the opinion, Chief Justice Roberts was joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. The key question here was whether the mandate provision was a tax or penalty. The Court used a functional approach to find the provision was in fact a tax, looking at its substance and application, rather than any statutory labels (which used the term “penalty”). The Court rejected the argument that the provision was actually a regulatory penalty, and therefore outside the scope of the taxing power, because it was not prohibitory, had no scienter requirement, and would be collected just like any other tax by the IRS. The provision’s obvious regulatory purpose was not a significant factor, with the Court noting that it is common for taxes to be intended to influence behavior. Further, the Court found the provision did not have to be read as making the failure to buy health insurance unlawful. Finally, the Court found the mandate provision, while a tax, was not a “direct tax” and therefore was not subject to the Constitution’s requirement that direct taxes be apportioned among the states based on population.

It should be noted that the Supreme Court also rendered a decision on the constitutionality of the ACA’s expansion of the Medicaid program. For a discussion of the Supreme Court’s decision on the Medicaid expansion, see CRS Report R42367, Medicaid and Federal Grant Conditions After NFIB v. Sebelius: Constitutional Issues and Analysis, by Kenneth R. Thomas.

Drones in Domestic Surveillance Operations: Fourth Amendment Implications and Legislative Responses

September 10, 2012 Comments off

Drones in Domestic Surveillance Operations: Fourth Amendment Implications and Legislative Responses (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

The prospect of drone use inside the United States raises far-reaching issues concerning the extent of government surveillance authority, the value of privacy in the digital age, and the role of Congress in reconciling these issues.

Drones, or unmanned aerial vehicles (UAVs), are aircraft that can fly without an onboard human operator. An unmanned aircraft system (UAS) is the entire system, including the aircraft, digital network, and personnel on the ground. Drones can fly either by remote control or on a predetermined flight path; can be as small as an insect and as large as a traditional jet; can be produced more cheaply than traditional aircraft; and can keep operators out of harm’s way. These unmanned aircraft are most commonly known for their operations overseas in tracking down and killing suspected members of Al Qaeda and related organizations. In addition to these missions abroad, drones are being considered for use in domestic surveillance operations, which might include in furtherance of homeland security, crime fighting, disaster relief, immigration control, and environmental monitoring.

Although relatively few drones are currently flown over U.S. soil, the Federal Aviation Administration (FAA) predicts that 30,000 drones will fill the nation’s skies in less than 20 years. Congress has played a large role in this expansion. In February 2012, Congress enacted the FAA Modernization and Reform Act (P.L. 112-95), which calls for the FAA to accelerate the integration of unmanned aircraft into the national airspace system by 2015. However, some Members of Congress and the public fear there are insufficient safeguards in place to ensure that drones are not used to spy on American citizens and unduly infringe upon their fundamental privacy. These observers caution that the FAA is primarily charged with ensuring air traffic safety, and is not adequately prepared to handle the issues of privacy and civil liberties raised by drone use.

This report assesses the use of drones under the Fourth Amendment right to be free from unreasonable searches and seizures. The touchstone of the Fourth Amendment is reasonableness. A reviewing court’s determination of the reasonableness of drone surveillance would likely be informed by location of the search, the sophistication of the technology used, and society’s conception of privacy in an age of rapid technological advancement. While individuals can expect substantial protections against warrantless government intrusions into their homes, the Fourth Amendment offers less robust restrictions upon government surveillance occurring in public places and perhaps even less in areas immediately outside the home, such as in driveways or backyards. Concomitantly, as technology advances, the contours of what is reasonable under the Fourth Amendment may adjust as people’s expectations of privacy evolve.

In the 112th Congress, several measures have been introduced that would restrict the use of drones at home. Senator Rand Paul and Representative Austin Scott introduced the Preserving Freedom from Unwarranted Surveillance Act of 2012 (S. 3287, H.R. 5925), which would require law enforcement to obtain a warrant before using drones for domestic surveillance, subject to several exceptions. Similarly, Representative Ted Poe’s Preserving American Privacy Act of 2012 (H.R. 6199) would permit law enforcement to conduct drone surveillance pursuant to a warrant, but only in investigation of a felony.

CRS — Weather-Related Power Outages and Electric System Resiliency

September 6, 2012 Comments off

Weather-Related Power Outages and Electric System Resiliency (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

High winds, especially when combined with precipitation from seasonal storms, can cause damage to electricity utility systems, resulting in service interruptions to large numbers of electricity customers. While most such power outages are caused by damage from trees and tree limbs falling on local electricity distribution lines and poles, major power outages tend to be caused by damage to electricity transmission lines which carry bulk power long distances. Depending on the severity of the storm and resulting impairment, power outages can last a few hours or extend to periods of several days, and have real economic effects. Power outages can impact businesses (primarily through lost orders and damage to perishable goods and inventories), and manufacturers (mainly through downtime and lost production, or equipment damage). Data from various studies lead to cost estimates from storm-related outages to the U.S. economy at between $20 billion and $55 billion annually. Data also suggest the trend of outages from weather-related events is increasing.

Suggested solutions for reducing impacts from weather-related outages include improved treetrimming schedules to keep rights-of-way clear, placing distribution and some transmission lines underground, implementing Smart Grid improvements to enhance power system operations and control, inclusion of more distributed generation, and changing utility maintenance practices and metrics to focus on power system reliability. However, most of these potential solutions come with high costs which must be balanced against the perceived benefits.

A number of options exist for Congress to consider which could help reduce storm-related outages. These range from improving the quality of data on storm-related outages, to a greater strategic investment in the U.S. electricity grid. Congress could empower a federal agency to develop standards for the consistent reporting of power outage data. While responsibility for the reliability of the bulk electric system is under the Federal Energy Regulatory Commission (as per the Energy Policy Act of 2005), no central responsibility exists for the reliability of distribution systems. One possible option could be to bring distribution systems under the Electric Reliability Organization for reliability purposes. Recovery after storm-related outages might be enhanced by a federal role in formalizing the review or coordination of electric utility mutual assistance agreements (MAAs). This would not necessarily mean federal approval of MAAs, but may help in the cooperative coordination of additional federal and state resources, especially in a wide, multi-state weather event. While there has been much discussion of transmission system inadequacies and inefficiencies, many distribution systems are in dire need of upgrades or repairs. The cost of upgrading the U.S. grid to meet future uses is expected to be high, with the American Society of Civil Engineers estimating a need of $673 billion by 2020. While the federal government recently made funding available of almost $16 billion for specific Smart Grid projects and new transmission lines under the American Recovery and Reinvestment Act of 2009, there has not been a comprehensive effort to study the needs, set goals, and provide targeted funding for modernization of the U.S. grid as part of a long-term national energy strategy. Such an effort would also require decisions about the appropriate roles of government and the private sector.

Power delivery systems are most vulnerable to storms and extreme weather events. Improving the overall condition and efficiency of the power delivery system can only serve to improve the resiliency of the system, and help hasten recovery from weather-related outages. Ultimately, however, electric utilities are responsible for this infrastructure. They are in the business of selling electricity, and they cannot sell electricity if their power delivery systems are out of service.

CRS — Navy Irregular Warfare and Counterterrorism Operations: Background and Issues for Congress

August 17, 2012 Comments off

Navy Irregular Warfare and Counterterrorism Operations: Background and Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Navy for several years has carried out a variety of irregular warfare (IW) and counterterrorism (CT) activities. Among the most readily visible of the Navy’s recent IW operations have been those carried out by Navy sailors serving ashore in Afghanistan and Iraq.

Many of the Navy’s contributions to IW operations around the world are made by Navy individual augmentees (IAs)—individual Navy sailors assigned to various DOD operations.

The May 1-2, 2011, U.S. military operation in Abbottabad, Pakistan, that killed Osama bin Laden reportedly was carried out by a team of 23 Navy special operations forces, known as SEALs (an acronym standing for Sea, Air, and Land). The SEALs reportedly belonged to an elite unit known unofficially as Seal Team 6 and officially as the Naval Special Warfare Development Group (DEVGRU).

The Navy established the Navy Expeditionary Combat Command (NECC) informally in October 2005 and formally in January 2006. NECC consolidated and facilitated the expansion of a number of Navy organizations that have a role in IW operations. The Navy established the Navy Irregular Warfare Office in July 2008, published a vision statement for irregular warfare in January 2010, and established “a community of interest” to develop and advance ideas, collaboration, and advocacy related to IW in December 2010.

The Navy’s riverine force is intended to supplement the riverine capabilities of the Navy’s SEALs and relieve Marines who had been conducting maritime security operations in ports and waterways in Iraq.

The Global Maritime Partnership is a U.S. Navy initiative to achieve an enhanced degree of cooperation between the U.S. Navy and foreign navies, coast guards, and maritime police forces, for the purpose of ensuring global maritime security against common threats.

The Southern Partnership Station (SPS) and the Africa Partnership Station (APS) are Navy ships, such as amphibious ships or high-speed sealift ships, that have deployed to the Caribbean and to waters off Africa, respectively, to support U.S. Navy engagement with countries in those regions, particularly for purposes of building security partnerships with those countries and for increasing the capabilities of those countries for performing maritime-security operations. The Navy’s IW and CT activities pose a number of potential oversight issues for Congress, including the definition of Navy IW activities and how much emphasis to place on IW and CT activities in future Navy budgets.

CRS — Receipt of Unemployment Insurance by Higher-Income Unemployed Workers (“Millionaires”)

August 9, 2012 Comments off

Receipt of Unemployment Insurance by Higher-Income Unemployed Workers (“Millionaires”) (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The economic recession that began in December 2007 officially ended in June 2009 when the U.S. economy reached a trough, or low-point, in business activity. This recession lasted 18 months, making it the longest of any recession since World War II. To date, there is some growth in the nation’s Gross Domestic Product (GDP), and unemployment rates have fallen—but they remain persistently high in comparison to previous years. Peaking at 10.0% in October of 2010, the unemployment rate was 8.2% in May of 2012, up from 4.6% in May of 2006.

In response to the sustained period of high unemployment rates, Congress has extended Unemployment Insurance (UI) benefits several times. As a result of the Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96, signed into law on February 22, 2012), UI benefits are potentially available for up to 99 weeks, which is longer than during any previous recession— although in practice, no state currently offers more than 79 weeks of benefits.

The temporary, long-term extension of UI benefits has occurred at a time when the federal government and the states face serious budget constraints. The recent debate in Congress over the latest extension took place in a climate of ongoing concern over the level of federal budget deficits. It was in this context that a proposal to restrict unemployment benefit receipt based on income emerged. Specifically, the House-passed version of H.R. 3630 (the Middle Class Tax Relief and Job Creation Act) included a provision that would impose an income tax on unemployment benefits for high-income individuals. Based on a scaled approach, the tax would increase to 100% for a single tax filer with Adjusted Gross Income (AGI) of $1 million (or AGI of $2 million for a married couple filing a joint return). The provision, however, was not included in the final version of the legislation that became P.L. 112-96.

Several other bills have been introduced in the 112th Congress that would restrict unemployment benefit receipt based on income (i.e., they would change the current requirement to provide unemployment benefits to all workers without income restrictions). S. 1944 would impose an income tax on unemployment benefit income for certain high-income tax filers, among other provisions. S. 1931 includes the same provisions for a tax on unemployment benefits received by high-income individuals as H.R. 3630. H.R. 235 and S. 310 would prohibit the use of federal funds to pay UI benefits to certain high-income individuals, among other provisions. While the recent debate in Congress commonly referred to restricting “millionaires” from receiving UI benefits, the various proposals specify different income thresholds at which the restrictions would apply (i.e., they vary in how they define high-income individuals).

To inform the policy debate, this report provides information relevant to proposals that would restrict the payment of unemployment benefits to individuals with high incomes. Three primary areas that may be of interest to lawmakers are addressed: (1) the current U.S. Department of Labor (DOL) opinion on means-testing UI benefits; (2) the potential number of people who would be affected by such proposals; and (3) policy considerations such as the potential savings associated with such proposals, particularly in terms of federal expenditures. The latter two issues are discussed because a small percentage (approximately 0.02%) of tax filers receiving unemployment benefit income had AGI of $1 million or more in tax year 2009 based on Internal Revenue Service (IRS) data.

CRS — How FDA Approves Drugs and Regulates Their Safety and Effectiveness

July 3, 2012 Comments off

How FDA Approves Drugs and Regulates Their Safety and Effectiveness (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Food and Drug Administration (FDA) is a regulatory agency within the Department of Health and Human Services. A key responsibility is to regulate the safety and effectiveness of drugs sold in the United States. FDA divides that responsibility into two phases: preapproval (premarket) and postapproval (postmarket). FDA reviews manufacturers’ applications to market drugs in the United States; a drug may not be sold unless it has FDA approval. The agency continues its oversight of drug safety and effectiveness as long as the drug is on the market. Beginning with the Food and Drugs Act of 1906, Congress has incrementally refined and expanded FDA’s responsibilities regarding drug approval and regulation.

The progression to drug approval begins before FDA involvement. First, basic scientists work in the laboratory and with animals; second, a drug or biotechnology company develops a prototype drug. That company must seek and receive FDA approval, by way of an investigational new drug (IND) application, to test the product with human subjects. Those tests, called clinical trials, are carried out sequentially in Phase I, II, and III studies, which involve increasing numbers of subjects. The manufacturer then compiles the resulting data and analysis in a new drug application (NDA). FDA reviews the NDA with three major concerns: (1) safety and effectiveness in the drug’s proposed use; (2) appropriateness of the proposed labeling; and (3) adequacy of manufacturing methods to assure the drug’s identify, strength, quality, and identity. The Federal Food, Drug, and Cosmetic Act (FFDCA) and associated regulations detail the requirements at each step. FDA uses a few special mechanisms to expedite drug development and the review process when a drug might address an unmet need or a serious disease or condition. Those mechanisms include accelerated approval, animal efficacy approval, fast track applications, and priority review.

Once a drug is on the U.S. market (following FDA approval of the NDA), FDA continues to address drug production, distribution, and use. Its activities, based on ensuring drug safety and effectiveness, address product integrity, labeling, reporting of research and adverse events, surveillance, drug studies, risk management, information dissemination, off-label use, and directto-consumer advertising, all topics in which Congress has traditionally been interested.

FDA seeks to ensure product integrity through product and facility registration; inspections; chain-of-custody documentation; and technologies to protect against counterfeit, diverted, subpotent, adulterated, misbranded, and expired drugs. FDA’s approval of an NDA includes the drug’s labeling; the agency may require changes once a drug is on the market based on new information. It also prohibits manufacturer promotion of uses that are not specified in the labeling. The FFDCA requires that manufacturers report to FDA adverse events related to its drugs; clinicians and other members of the public may report adverse events to FDA. The agency’s surveillance of drug-related problems, which had primarily focused on analyses of various adverse-event databases, is now expanding to more active uses of evolving computer technology and linking to other public and private information sources.

The FFDCA allows FDA to require a manufacturer to conduct postapproval studies of drugs. The law specifies when FDA must attach the requirement to the NDA approval and when FDA may issue the requirement after a drug is on the market. To manage exception risks of drugs, FDA may require patient or clinician guides and restrictions on distribution. The agency publicly disseminates information about drug safety and effectiveness; and regulates the industry promotion of products to clinicians and the public.

See also: FDA’s Authority to Ensure That Drugs Prescribed to Children Are Safe and Effective (PDF)
See also: FDA Regulation of Medical Devices (PDF)
See also: The FDA Medical Device User Fee Program (PDF)

CRS — Cluster Munitions: Background and Issues for Congress

July 3, 2012 Comments off

Cluster Munitions: Background and Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Cluster munitions are air-dropped or ground-launched weapons that release a number of smaller submunitions intended to kill enemy personnel or destroy vehicles. Cluster munitions were developed in World War II and are part of many nations’ weapons stockpiles. Cluster munitions have been used frequently in combat, including the early phases of the current conflicts in Iraq and Afghanistan. Cluster munitions have been highly criticized internationally for causing a significant number of civilian deaths, and efforts have been undertaken to ban and regulate their use. The Department of Defense (DOD) continues to view cluster munitions as a military necessity but has instituted a policy to reduce the failure rate of cluster munitions to 1% or less by 2018.

There are two major international initiatives to address cluster munitions: the Convention on Cluster Munitions (CCM) and negotiations under the U.N. Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons (CCW). The Obama Administration has reiterated U.S. opposition to the CCM, which entered into force August 1, 2010, but is participating in negotiations regarding cluster munitions under the CCW.

CRS — Navy Shipboard Lasers for Surface, Air, and Missile Defense: Background and Issues for Congress

July 3, 2012 Comments off

Navy Shipboard Lasers for Surface, Air, and Missile Defense: Background and Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Department of Defense (DOD) development work on high-energy military lasers, which has been underway for decades, has reached the point where lasers capable of countering certain surface and air targets at ranges of about a mile could be made ready for installation on Navy surface ships over the next few years. More powerful shipboard lasers, which could become ready for installation in subsequent years, could provide Navy surface ships with an ability to counter a wider range of surface and air targets at ranges of up to about 10 miles. These more powerful lasers might, among other things, provide Navy surface ships with a terminal-defense capability against certain ballistic missiles, including China’s new anti-ship ballistic missile (ASBM).

The Navy and DOD have conducted development work on three principal types of lasers for potential use on Navy surface ships—fiber solid state lasers (SSLs), slab SSLs, and free electron lasers (FELs). One fiber SSL prototype demonstrator developed by the Navy was the Laser Weapon System (LaWS); another Navy fiber SSL effort is called the Tactical Laser System (TLS). Among DOD’s multiple efforts to develop slab SSLs for military use was the Maritime Laser Demonstration (MLD), a prototype laser weapon developed as a rapid demonstration project. The Navy has developed a lower-power FEL prototype and is now developing a prototype with scaled-up power. These lasers differ in terms of their relative merits as potential shipboard weapons.

Although the Navy is developing laser technologies and prototypes of potential shipboard lasers, and has a generalized vision for shipboard lasers, the Navy currently does not have a program of record for procuring a production version of a shipboard laser, or a roadmap that calls for installing lasers on specific surface ships by specific dates. The possibility of equipping Navy surface ships with lasers in coming years raises a number of potential issues for Congress, including the following:

  • whether the Navy should act now to adopt a program of record for procuring a production version of a shipboard laser, and/or a roadmap that calls for installing lasers on specific surface ships by specific dates;
  • how many types of lasers to continue developing, particularly given constraints on Navy funding, and the relative merits of types currently being developed; and
  • the potential implications of shipboard lasers for the design and acquisition of Navy ships, including the Flight III DDG-51 destroyer that the Navy wants to begin procuring in FY2016.

Congress in past years has provided some additional funding to help support Navy development of potential shipboard lasers. For FY2013 and subsequent years, Congress has several options regarding potential shipboard lasers. In addition to decisions on whether or not to fund continued development of potential shipboard lasers, these options include, among other things, the following: encouraging or directing the Navy or some other DOD organization to perform an analysis of alternatives (AOA) comparing the cost-effectiveness of lasers and traditional kinetic weapons (such as missiles and guns) for countering surface, air, and missile targets, and encouraging or directing the Navy to adopt a program of record for procuring a production version of a shipboard laser, and/or a roadmap that calls for installing lasers on specific surface ships by specific dates.

CRS — U.S. Foreign Assistance to Latin America and the Caribbean: Recent Trends and FY2013 Appropriations

July 3, 2012 Comments off

U.S. Foreign Assistance to Latin America and the Caribbean: Recent Trends and FY2013 Appropriations (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Geographic proximity has forged strong linkages between the United States and the nations of Latin America and the Caribbean, with critical U.S. interests in the region 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 is designed to promote economic and social opportunity; ensure citizen security; strengthen effective democratic institutions; and secure a clean energy future. As part of broader efforts to advance these priorities, the United States provides Latin American and Caribbean nations with substantial amounts of foreign assistance. Congress – which authorizes and appropriates aid for the region, and engages in oversight of assistance programs – is currently considering the President’s foreign aid request for FY2013. In recent years, the State Department, Foreign Operations, and Related Programs appropriations measure has been the primary legislative vehicle through which Congress reviews U.S. assistance and influences executive branch policy toward the region.

Trends in Assistance Since 1946, the United States has provided over $148 billion (constant 2010 dollars) in assistance to the region. Funding levels have fluctuated over time, however, according to regional trends and U.S. policy initiatives. U.S. assistance to the region spiked during the 1960s under President Kennedy’s Alliance for Progress, then declined in the 1970s before spiking again during the Central American conflicts of the 1980s. After another decline during the 1990s, assistance to the region remained on a generally upward trajectory through the first decade of this century, reaching its most recent peak in the aftermath of the 2010 earthquake in Haiti. Aid levels for the region have fallen in each of the past two fiscal years, however, as Congress has sought to trim the foreign aid budget.

FY2013 Obama Administration Request The Obama Administration’s FY2013 foreign aid budget request would continue the recent downward trend in assistance to Latin America and the Caribbean. The Administration has requested some $1.7 billion for the region to be provided through the State Department and the U.S. Agency for International Development (USAID). If Congress appropriates funding at the requested levels, Latin America and the Caribbean would receive nearly 9% less assistance than the region received in FY2012, and about 11% less than in FY2011. The proposed cuts are widespread, affecting nearly every foreign aid account. Colombia, Haiti, and Mexico would see some of the largest absolute dollar declines, but would remain the top three regional recipients, collectively accounting for some 55% of the aid to the region. Beyond the assistance provided through the State Department and USAID, many Latin American and Caribbean nations will continue to receive additional aid from agencies such as the Department of Defense, the InterAmerican Foundation, the Millennium Challenge Corporation, and the Peace Corps.

Congressional Action In May 2012, the House and Senate Committees on Appropriations marked up their annual appropriations bills for the State Department, Foreign Operations, and Related Programs (H.R. 5857 and S. 3241). Funding in the FY2013 House bill is 11.8% lower than the Administration’s request, and funding in the Senate bill is 4.7% lower than the Administration’s request. It is unclear how much foreign assistance each of the nations of Latin America and the Caribbean would receive under the two bills, however, since appropriation levels for individual countries and programs are generally not specified in the legislation or accompanying reports. Nevertheless, both of the reports (H.Rept. 112-494 and S.Rept. 112-172) express concerns over conditions in the region and recommend assistance levels that are above the Administration’s request for certain Latin American and Caribbean countries. As the legislation moves forward, Congress may consider issues such as how best to reconcile assistance priorities with budget constraints, improve inter-agency and donor coordination, and ensure the sustainability of U.S. assistance efforts.

CRS — Federal Laws Relating to Cybersecurity: Discussion of Proposed Revisions

July 3, 2012 Comments off

Federal Laws Relating to Cybersecurity: Discussion of Proposed Revisions (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

For more than a decade, various experts have expressed increasing concerns about cybersecurity, in light of the growing frequency, impact, and sophistication of attacks on information systems in the United States and abroad. Consensus has also been building that the current legislative framework for cybersecurity might need to be revised.

The complex federal role in cybersecurity involves both securing federal systems and assisting in protecting nonfederal systems. Under current law, all federal agencies have cybersecurity responsibilities relating to their own systems, and many have sector-specific responsibilities for critical infrastructure.

More than 50 statutes address various aspects of cybersecurity either directly or indirectly, but there is no overarching framework legislation in place. While revisions to most of those laws have been proposed over the past few years, no major cybersecurity legislation has been enacted since 2002.

Recent legislative proposals, including many bills introduced in the 111th and 112th Congresses, have focused largely on issues in 10 broad areas (see “Selected Issues Addressed in Proposed Legislation” for an overview of how current legislative proposals would address issues in several of those areas):

  • national strategy and the role of government,
  • reform of the Federal Information Security Management Act (FISMA),
  • protection of critical infrastructure (including the electricity grid and the chemical industry),
  • information sharing and cross-sector coordination,
  • breaches resulting in theft or exposure of personal data such as financial

  • cybercrime,
  • privacy in the context of electronic commerce,
  • international efforts,
  • research and development, and
  • the cybersecurity workforce.

For most of those topics, at least some of the bills addressing them have proposed changes to current laws. Several of the bills specifically focused on cybersecurity have received committee or floor action, but none have become law.

CRS — Haiti Under President Martelly: Current Conditions and Congressional Concerns

July 3, 2012 Comments off

Haiti Under President Martelly: Current Conditions and Congressional Concerns (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Haiti shares the island of Hispaniola with the Dominican Republic. Since the fall of the Duvalier dictatorship in 1986, Haiti has struggled to overcome its centuries-long legacy of authoritarianism, extreme poverty, and underdevelopment. During that time, economic and social stability improved considerably, and many analysts believed Haiti was turning a corner toward sustainable development. Unfortunately, Haiti’s development was set back by a massive earthquake in January 2010 that devastated much of the capital of Port-au-Prince and other parts of the country. Poverty remains massive and deep, and economic disparity is wide: Haiti remains the poorest country in the western hemisphere.

Haiti is the Obama Administration’s top priority in the Latin America and Caribbean region. Haiti’s developmental needs and priorities are many. The Haitian government and the international donor community are implementing a 10-year recovery plan focusing on territorial, economic, social, and institutional rebuilding. An outbreak of cholera later in 2010 has swept across most of the country and further complicated assistance efforts after the earthquake. While some progress has been made in developing democratic institutions, they remain weak. Following yet another controversial, sometimes violent election process, Haiti saw its first peaceful, democratic transfer of power between presidents of opposing parties in May 2011.

Outgoing President Rene Préval handed the presidential sash to President Michel Martelly, a popular musician without any previous political experience. Martelly’s administration has been without a prime minister for most of his first year in office, hampering reconstruction efforts. The United Nations Stabilization Mission in Haiti (MINUSTAH) has been in Haiti to help restore order since the collapse of former President Jean-Bertrand Aristide’s government in 2004.

MINUSTAH’s current strength is 10,773 troops. The Mission has helped facilitate elections, conducted campaigns to combat gangs and drug trafficking with the Haitian National Police, and played a key role in emergency responses to natural disasters, especially after the earthquake. Popular protests have called for MINUSTAH’s withdrawal because of allegations regarding its role in introducing cholera to the country and sexual abuse by some of its forces.

The main priorities for U.S. policy regarding Haiti are to strengthen fragile democratic processes, continue to improve security, and promote economic development. Other concerns include the cost and effectiveness of U.S. aid; protecting human rights; combating narcotics, arms, and human trafficking; and alleviating poverty. The Obama Administration granted Temporary Protected Status to Haitians living in the United States at the time of the earthquake.

Congressional concerns include the pace and effectiveness of reconstruction; respect for human rights, particularly for women; counternarcotics efforts; and security issues. Congress is also concerned that overdue Senate and local elections be scheduled and be free, fair, and peaceful. Current law related to Haiti includes P.L. 112-74, P.L. 111-171, P.L. 110-246, and P.L. 109-432. Pending legislation related to Haiti includes H.R. 1016/S. 1576, H.R. 3711, H.R. 3771, H.Res. 510, H.Res. 521/S.Res. 352, S. 1023, S.Res. 26, S.Res. 352, and S.Res. 368. For details see “Legislation in the 112 th Congress.”

CRS — The Development of High Speed Rail in the United States: Issues and Recent Events

July 3, 2012 Comments off

The Development of High Speed Rail in the United States: Issues and Recent Events (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The provision of $8 billion for intercity passenger rail projects in the 2009 American Recovery and Reinvestment Act (ARRA; P.L. 111-5) reinvigorated efforts to expand intercity passenger rail transportation in the United States. The Obama Administration subsequently announced that it would ask Congress to provide $1 billion annually for high speed rail (HSR) projects. This initiative was reflected in the President’s budgets for FY2010 through FY2013. Congress approved $2.5 billion for high speed and intercity passenger rail in FY2010 (P.L. 111-117), but zero in FY2011 (P.L. 112-10) and FY2012 (P.L. 112-55). In addition, the FY2011 appropriations act rescinded $400 million from prior year unobligated balances of program funding.

There are two main approaches to building high speed rail (HSR): (1) improving existing tracks and signaling to allow trains to reach speeds of up to 110 miles per hour (mph), generally on track shared with freight trains; and (2) building new tracks dedicated exclusively to high speed passenger rail service, to allow trains to travel at speeds of 200 mph or more. The potential costs, and benefits, are relatively lower with the first approach and higher with the second approach.

Much of the federal funding for HSR to date has focused on improving existing lines in five corridors: Seattle-Portland; Chicago-St. Louis; Chicago-Detroit; the Northeast Corridor (NEC); and Charlotte-Washington, DC. Most of the rest of the money is being used for a largely new system dedicated to passenger trains between San Francisco and Los Angeles, on which speeds could reach up to 220 mph. Plans for HSR in some states were shelved by political leaders opposed to the substantial risks such projects entail, particularly the capital and operating costs; the federal funds allocated to those projects were subsequently redirected to other HSR projects.

Estimates of the cost of constructing HSR vary according to train speed, the topography of the corridor, the cost of right-of-way, and other factors. Few if any HSR lines anywhere in the world have earned enough revenue to cover both their construction and operating costs, even where population density is far greater than anywhere in the United States. Typically, governments have paid the construction costs, and in many cases have subsidized the operating costs as well. These subsidies are often justified by the social benefits ascribed to HSR in relieving congestion, reducing pollution, increasing energy efficiency, and contributing to employment and economic development. It is unclear whether these potential social benefits are commensurate with the likely costs of constructing and operating HSR.

Lack of long-term funding represents a significant obstacle to HSR development in the United States. The federal government does not have a dedicated funding source for HSR, making projects that can take years to build vulnerable to year-to-year changes in discretionary budget allocations.

CRS — Hydropower: Federal and Nonfederal Investment

July 3, 2012 Comments off

Hydropower: Federal and Nonfederal Investment (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Congress is examining numerous energy sources to determine their contribution to the nation’s energy portfolio and the federal role in supporting these sources. Hydropower, the use of flowing water to produce electricity, is one such source. Conventional hydropower accounted for approximately 6% of total U.S. net electricity generation in 2010.

Hydropower has advantages and disadvantages as an energy source. Its advantages include its status as a continuous, or baseload, power source that releases minimal air pollutants during power generation relative to fossil fuels. Some of its disadvantages, depending on the type of hydropower plant, include high initial capital costs, ecosystem disruption, and reduced generation during low water years and seasons.

Hydropower project ownership can be categorized as federal or nonfederal. The bulk of federal projects are owned and managed by the Bureau of Reclamation and the U.S. Army Corps of Engineers. Nonfederal projects are licensed and overseen by the Federal Energy Regulatory Commission (FERC).

Considered by many to be an established energy source, hydropower is not always discussed alongside clean or renewable energy sources in the ongoing energy debate. However, hydropower proponents argue that hydropower is cleaner than some conventional energy sources, and point to recent findings that additional hydropower capacity could help the United States reach proposed energy, economic, and environmental goals. Others argue that the expansion of hydropower in the form of numerous small hydropower projects could have environmental impacts and regulatory concerns similar to those of existing large projects.

Congress faces several issues as it determines how hydropower fits into a changing energy and economic landscape. For example, existing large hydropower infrastructure is aging; many of the nation’s hydropower generators and dams are over 30 years old. Proposed options to address this concern include increasing federal funding, utilizing alternative funding, privatizing federally owned dams, and encouraging additional small-capacity generators, among other options. Additionally, whether to significantly expand or encourage expansion of hydropower is likely to require congressional input due to the uncertainty surrounding the clean and renewable energy portfolio within power markets. Potential expansion of hydropower projects could take place by improving efficiency at existing projects or by building new projects, or both. Congressional support for this approach is evident in the House passage of the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2012 (H.R. 2842). Senate activity on this matter includes the Hydropower Improvement Act of 2011 (S. 629), which proposes to establish a grants program for increased hydropower production, and to amend the Federal Power Act (FPA) to authorize FERC to exempt electric power generation facilities on federal lands from the act’s requirements, among other things. Another issue is the rate at which FERC issues licenses for nonfederal projects, which is slower than some find ideal. The licensing process can be delayed significantly as stakeholders and the approximately dozen federal and state agencies involved give their input. FERC responded by developing a more streamlined licensing process in 2003. Still, some object to “mandatory conditions” that federal agencies can place on new or renewed hydropower facilities. The 112 th Congress has introduced roughly 25 bills regarding hydropower, a quarter of which are state- or site-specific legislation.

CRS — China’s Economic Conditions

July 3, 2012 Comments off

China’s Economic Conditions (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Prior to the initiation of economic reforms and trade liberalization 33 years ago, China maintained policies that kept the economy very poor, stagnant, centrally controlled, vastly inefficient, and relatively isolated from the global economy. Since opening up to foreign trade and investment and implementing free market reforms in 1979, China has been among the world’s fastest growing economies, with real annual gross domestic product (GDP) averaging nearly10% through 2011. In recent years, China has emerged as a major global economic and trade power. It is currently the world’s second largest economy, largest merchandise exporter, second largest merchandise importer, second largest destination of foreign direct investment (FDI), largest manufacturer, largest holder of foreign exchange reserves, and largest creditor nation.

The global economic crisis that began in 2008 significantly affected China’s economy. China’s exports, imports, and FDI inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package, loosening monetary policies to increase bank lending, and providing various incentives to boost domestic consumption. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, while several of the world’s leading economies experienced negative or stagnant economic growth. From 2008 to 2011, China’s real GDP growth averaged 9.6%.

Some economic forecasters project that China will overtake the United States as the world’s largest economy within a few years, although U.S. per capita GDP levels are expected to remain much larger than that of China for many years to come. However, the ability of China to maintain a rapidly growing economy in the long run will depend largely on the ability of the Chinese government to implement comprehensive economic reforms that more quickly hasten China’s transition to a free market economy; rebalance the Chinese economy by making consumer demand, rather than exporting and fixed investment, the main engine of economic growth; and boosting productivity and innovation. China faces numerous other challenges as well that could affect its future economic growth, such as widespread pollution, growing income disparities, an undeveloped social safety net, and extensive involvement of the state in the economy. The Chinese government has acknowledged that its current economic growth model needs to be altered. In October 2006, the Chinese government formally outlined a goal of building a “harmonious socialist society” by taking steps (by 2020) to lessen income inequality, improve the rule of law, enhance environmental protection, reduce corruption, and improve the country’s social safety net (such as expanding health care and pension coverage to rural areas). In addition, the government announced plans to rebalance the economy and boost innovation.

China’s economic rise has significant implications for the United States and hence is of major interest to Congress. On the one hand, China is a large (and potentially huge) export market for the United States. Many U.S. firms use China as the final point of assembly in their global supply chain networks. China’s large holdings of U.S. Treasury securities help the federal government finance its budget deficits and keep U.S. interest rates low. However, some analysts contend that China maintains a number of distortive economic policies (such as an undervalued currency and protectionist industrial policies) that undermine U.S. economic interests. They warn that efforts by the Chinese government to promote innovation could mean that Chinese firms will increasingly pose a “competitive challenge” to many leading U.S. industries. This report surveys the rise of China’s economy, describes major economic challenges facing China, and discusses the challenges, opportunities, and implications of China’s economic rise for the United States.

CRS — Unauthorized Alien Students: Issues and “DREAM Act” Legislation

June 26, 2012 Comments off

Unauthorized Alien Students: Issues and “DREAM Act” Legislation (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The 109th and 110th Congresses considered, but did not enact, comprehensive immigration reform legislation that included large-scale legalization programs for unauthorized aliens. In the aftermath of these unsuccessful efforts, some interested parties have urged the President and Congress to pursue more limited legislation to address the status of unauthorized alien students. Such legislation is commonly referred to as the “DREAM Act.” Unauthorized aliens in the United States are able to receive free public education through high school. They may experience difficulty obtaining higher education, however, for several reasons. Among these reasons is a provision enacted in 1996 that prohibits states from granting unauthorized aliens certain postsecondary educational benefits on the basis of state residence, unless equal benefits are made available to all U.S. citizens. This prohibition is commonly understood to apply to the granting of “in-state” residency status for tuition purposes.

Unauthorized alien students also are not eligible for federal student financial aid. More broadly, as unauthorized aliens, they are not legally allowed to work and are subject to being removed from the country.

Multiple DREAM Act bills have been introduced in recent Congresses to address the unauthorized student population. Most have proposed a two-prong approach of repealing the 1996 provision and enabling some unauthorized alien students to become U.S. legal permanent residents (LPRs) through an immigration procedure known as cancellation of removal. While there are other options for dealing with this population, this report deals exclusively with the DREAM Act approach in light of the considerable congressional interest in it. In the 111th Congress, the House approved DREAM Act language as part of an unrelated bill, the Removal Clarification Act of 2010. However, the Senate failed, on a 55-41 vote, to invoke cloture on a motion to agree to the House-passed DREAM Act amendment and the bill died at the end of the Congress. The House-approved language differed in key respects from earlier versions of the DREAM Act.

Bills to legalize the status of unauthorized alien students (S. 952, H.R. 1842, H.R. 3823) have again been introduced in the 112 th Congress. It is unclear, however, whether any of these measures will be considered.

On June 15, 2012, the Obama Administration announced that certain individuals who were brought to the United States as children and meet other criteria would be considered for relief from removal. Under a memorandum issued by Secretary of Homeland Security Janet Napolitano on that date, these individuals would be eligible for deferred action for two years, subject to renewal, and could apply for employment authorization.

CRS — U.S. Trade Deficit and the Impact of Changing Oil Prices

June 26, 2012 Comments off

U.S. Trade Deficit and the Impact of Changing Oil Prices (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Petroleum prices rose sharply between January 2012 and April 2012, at times reaching more than $109 per barrel of crude oil. Although this is still below the $140 per barrel price reached in 2008, the rising cost of energy was one factor that helped to dampen the rate of growth in the economy during the second half of 2011 and the first half of 2012. While the price of oil was rising, the volume of oil imports, or the amount of oil imported, decreased slightly from the comparable period in the previous year. In general, market demand for oil remains highly resistant to changes in oil prices and reflects the unique nature of the demand for oil. In addition, sustained demand for oil in the face of higher prices reflected an increase in economic activity that occurred following the worst part of the economic recession in 2009. Turmoil in the Middle East was an important factor causing petroleum prices to rise sharply in early 2011 and in 2012. Although prices for imported oil fluctuated somewhat throughout 2011, they averaged 30% higher than in 2010 and added about $100 billion to the total U.S. trade deficit in 2011. Oil futures markets in June indicated that oil prices were expected to fluctuate around the $83 per barrel recorded in June 2012, in part because oil producers agreed in mid-June to maintain the then-current production levels to stabilize market prices. The increase in energy import prices in 2011 pushed up the price of energy to consumers. In such cases, some elements of the public tend to pressure Congress to provide relief to households that are struggling to meet their current expenses. This report provides an estimate of the initial impact of the changing oil prices on the nation’s merchandise trade deficit.


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