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crs_R45461 | crs_R45461_0 | You are given a report by a government agency. Write a one-page summary of the report.
Report:
Background
What is the U.S. International Development Finance Corporation (IDFC)?
The IDFC is authorized by statute to be a "wholly owned Government corporation ... under the foreign policy guidance of the Secretary of State" in the executive branch. Its purpose is to "mobilize and facilitate the participation of private sector capital and skills in the economic development" of developing and transition countries, in order to complement U.S. development assistance objectives and foreign policy interests (§1412). In other words, the IDFC's mission is to promote private investment in support of both U.S. global development goals and U.S. economic interests. Not yet operational, the IDFC represents a potentially major overhaul of U.S. development finance efforts.
The IDFC's enabling legislation is the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), which was enacted on October 5, 2018, as Division F of a law to reauthorize the (unrelated) Federal Aviation Administration (FAA) ( H.R. 302 / P.L. 115-254 ). Under the BUILD Act, the IDFC is to consolidate and expand the U.S. government's existing development finance functions—currently conducted primarily by the Overseas Private Investment Corporation (OPIC) and the U.S. Agency for International Development (USAID). By statute, the IDFC is a successor agency to OPIC, which is to terminate when the IDFC is operational.
What existing agency functions are consolidated?
The BUILD Act consolidates functions currently carried out primarily by OPIC and certain elements of USAID (see Appendix ).
The act established the new IDFC to be a successor entity to OPIC, taking over all of its functions and authorities and adding new ones. The IDFC's authorities would expand beyond OPIC's existing authorities to make loans and guarantees and issue insurance or reinsurance. They would also include the authority to take minority equity positions in investments, subject to limitations. In addition, unlike OPIC, the IDFC would be able to issue loans in local currency.
The extent to which USAID functions will be transferred to the new IDFC is less clear. The act specifies that the Development Credit Authority (DCA), the existing legacy credit portfolio under the Urban and Environment Credit Program, and any other direct loan programs and non-DCA guarantee programs shall be transferred to the IDFC. It also provides the authority for, but does not require, the transfer of USAID's Office of Private Capital and Microenterprise, the existing USAID-managed enterprise funds (it gives the IDFC authority to establish new funds), and the sovereign loan guarantee portfolio. The disposition of these functions is to be detailed in the reorganization plan that the Administration must submit to Congress within 120 days of enactment. The reorganization plan is expected to be submitted by early February 2019.
In addition, the IDFC would have the authority to conduct feasibility studies on proposed investment projects (with cost sharing) and provide technical assistance.
What is development finance?
"Development finance" is a term commonly used to describe government-backed financing to support private sector capital investments in developing and emerging economies. It can be viewed on a continuum of public and private support, situated between pure government support through grants and concessional loans and pure commercial financing at market-rate terms.
Development finance generally is targeted toward promoting economic development by supporting foreign direct investment (FDI) in underserved types of projects, regions, and countries; undercapitalized sectors; and countries with viable project environments but low credit ratings. Such support is aimed to increase private sector activity and public-private partnerships that would not happen otherwise in the absence of development finance support because of the actual or perceived risk associated with the activity. Tools of development finance may include equity (raising capital through the sale of ownership shares), direct loans, loan guarantees, political risk insurance, and technical assistance.
Development financing is particularly important for infrastructure funding, where annual global investment in transportation, power, water, and telecommunications systems falls, by one account, almost $800 million short of the estimated $3.3 trillion required to keep pace with projected economic growth. The largest infrastructure investment gaps are in the road and electricity sectors in developing and emerging economies.
What are development finance institutions (DFIs)?
DFIs are specialized entities that supply development finance, generally aiming to be catalytic agents in promoting private sector investment in developing countries. In the United States, OPIC has been the primary DFI since the 1970s. In FY2017, OPIC reported authorizing $3.8 billion in new commitments for 112 projects, and its exposure reached a record high of $23.2 billion (see Figure 1 ). OPIC estimated that it helped mobilize $6.8 billion in capital and supported 13,000 new jobs in host countries that year. Sub-Saharan Africa represents the largest share of OPIC's portfolio by region. OPIC has committed $2.4 billion in financing and political risk insurance for Power Africa−a major public-private partnership coordinated by USAID−to date, including committing $12.4 million for a loan to support construction of a hydropower plant in Uganda in FY2017. Among other focus areas, OPIC currently has $5 billion invested in the Indo-Pacific in projects to expand access to energy, education, and financial services, as well as to support local farmers. On July 30, 2018, OPIC, the Japanese Bank for International Cooperation (JBIC, Japan's counterpart to OPIC), and the Australian government announced a trilateral partnership to mobilize investments in infrastructure projects in the Indo-Pacific region to support development, connectivity, and economic growth in the region.
Other agencies, such as the U.S. Agency for International Development (USAID), also provide development finance. The IDFC is to take on the DFI mantle for the United States under the BUILD Act.
At the bilateral level, national governments can operate DFIs. The United Kingdom was the first country to establish a DFI in 1948. Many countries have followed suit. In the United States, OPIC began operations in 1971, but the U.S. government's role in overseas investment financing predates OPIC's formal establishment.
Bilateral DFIs are typically wholly or majority government-owned. They operate either as independent institutions or as a part of larger development banks or institutions. Their organizational structures have evolved, in some cases, due to changing perceptions of how to address identified development needs in the most effective way possible. Unlike OPIC, other bilateral DFIs tend to be permanent and not subject to renewals by their countries' legislatures.
DFIs also can operate multilaterally, as parts of international financial institutions (IFIs), such as the International Finance Corporation (IFC), the private-sector arm of the World Bank. They can operate regionally through regional development banks as well. Examples of these banks include the African Development Bank (AfDB), the Asian Development Bank (AsDB), the European Bank for Reconstruction & Development (EBRD), and the Inter-American Development Bank (IDB).
DFIs vary in their specific objectives, management structures, authorities, and activities.
How does development finance relate to foreign assistance?
Historically, official development assistance (ODA) has been a primary way that the United States and other developed countries have provided support for infrastructure projects in developing countries. However, foreign aid for infrastructure has declined over decades while the growth of direct private investment flows has outpaced ODA, making development finance an increasingly prominent way to encourage private investment in undercapitalized areas. Private investors face challenges investing in developing countries due to political risk, exchange rate risk, and weaknesses in legal, regulatory, and institutional environments, among other things. In such cases, government support, whether through equity, financing, or political risk insurance, may provide needed liquidity or assurances to catalyze private investment.
How does the IDFC aim to respond to China's growing economic influence in developing countries?
While it does not mention China by name, the BUILD Act alludes to concerns with state-directed investments, such as China's Belt and Road Initiative (BRI), which launched in 2013. The act states that it is U.S. policy to "facilitate market-based private sector development and inclusive economic growth in less developed countries" through financing, including
to provide countries a robust alternative to state-directed investments by authoritarian governments and [U.S.] strategic competitors using best practices with respect to transparency and environmental and social safeguards, and which take into account the debt sustainability of partner countries (§1411).
Supporters view the IDFC as a central part of the U.S. response to China's growing economic influence in developing countries, exemplified by the BRI—which could provide, by some estimates, anywhere from $1 trillion to $8 trillion in Chinese investments and development financing for infrastructure projects in developing countries (see text box ). The Administration and many Members of Congress have been critical of China's financing model, which they find to lack transparency, operate under inadequate environmental and social safeguards for projects, and employ questionable lending practices that may lead to unsustainable debt burdens in some poorer countries (so-called "debt diplomacy"). Under this view, the IDFC (when operational) may help the United States compete more effectively or strategically with China. While even a strengthened OPIC may not be able to compete "dollar-for-dollar" with China's DFI activity, supporters argue that the United States "can and should do more to support international economic development with partners who have embraced the private sector-driven development model." Others, however, argued that the act could have tightened the IDFC's focus with respect to China, for instance, by requiring the IDFC to have a specific focus on countering China's investment and economic influence; from this perspective, the failure to narrow the IDFC's scope makes it likely that the new entity may support projects of limited U.S. foreign policy and strategic interest—a concern that some critics have levied against OPIC.
BUILD Act Formulation and Debate
What is the BUILD Act's legislative history?15
In February 2018, two proposed versions of the BUILD Act, H.R. 5105 in the House and S. 2463 in the Senate, were introduced to create a new U.S. International Development Finance Corporation (IDFC). Both bills proposed consolidating all of OPIC's functions and certain elements of USAID—including the Development Credit Authority (DCA), Office of Private Capital and Microenterprise, and enterprise funds. A major difference between the two bills, as introduced, was that H.R. 5105 would have authorized the IDFC for seven years, while S. 2463 would have authorized it for two decades, until September 30, 2038. The House-passed version (July 17, 2018; H.Rept. 115-814 ) and Senate committee-reported version (June 27, 2018) bridged some differences, including both providing a seven-year authorization.
On September 26, 2018, the House adopted a resolution ( H.Res. 1082 ) to pass the BUILD Act as part of the Federal Aviation Administration Reauthorization Act of 2018 (FAA Reauthorization Act; H.R. 302 ). The Senate followed with its passage of the BUILD Act as part of the FAA Reauthorization Act on October 3, 2018. On October 5, 2018, the President signed into law the FAA Reauthorization Act, with the BUILD Act in Division F.
What is the Trump Administration's development finance policy approach?
Although the President's FY2018 budget request called for eliminating OPIC's funding as part of its critical view of U.S. government agencies with international development orientations, the Administration ultimately pursued development finance reform through OPIC as an opportunity to respond to China's growing economic influence in developing countries. The Trump Administration included development finance consolidation in its FY2019 budget request and subsequent set of government-wide reorganization proposals. The Administration supported the BUILD Act bills introduced in Congress ( H.R. 5105 , S. 2320 ), viewing them as broadly consistent with its goals, while calling for some modifications. It later said that amendments to the BUILD Act fulfilled the Administration's goals, including to "align U.S. government development finance with broader foreign policy and development goals, enhancing the competitiveness and compatibility of the U.S. development finance toolkit."
What was the policy debate over the BUILD Act?
The BUILD Act follows long-standing debate among policymakers over whether or not government financing of private-sector activity is appropriate. Supporters argued that OPIC helps fill in gaps in private-sector support that arise from market failures and helps U.S. firms compete against foreign firms backed by foreign DFIs for investment opportunities—thereby advancing U.S. foreign policy, national security, and economic interests. Various civil society stakeholders have proposed consolidating the development finance functions of OPIC and other agencies into a new DFI in order to boost OPIC and make U.S. development finance efforts more competitive with those of foreign countries. Opponents held that OPIC diverts capital away from efficient uses and crowds out private alternatives, criticized OPIC for assuming risks unwanted by the private sector, and questioned the development benefits of its programs. They have called for terminating OPIC's functions or privatizing them.
While the BUILD Act garnered overall support, specific aspects of it were subject to debate. Some development advocates expressed concern that the BUILD Act's transfer of DCA and other credit program authority from USAID to the IDFC may sever the close link between these funding mechanisms and the USAID development programs into which they have been embedded, potentially making the tools less effective and less development-oriented. Others saw potential for the DCA to become a more robust financing option for USAID programs under the new IDFC, with its expanded authorities. In response to these concerns, the BUILD Act includes many provisions, discussed later in this report, to promote coordination and linkages between USAID and the IDFC, and to emphasize the development mission of the IDFC. Some in the development community also questioned whether the new DFI would have a sufficiently strong development mandate, as well as raised concerns about the transparency, environmental, and social standards of the new DFI relative to OPIC. Some critics of OPIC supported strengthening statutorily the aim of the IDFC in specifically countering China's influence in the developing countries. Other possible policy alternatives include focusing on enhancing coordination of development finance functions among agencies or supporting development goals through multilateral and regional DFIs in which the United States plays a major leadership role.
IDFC Organizational Structure and Management
While the IDFC authorized by the BUILD Act has yet to be established, and some implementation questions remain, the act detailed many aspects of how the new entity should be structured, managed, and overseen by Congress. This section discusses the BUILD Act provisions that describe how the new IDFC is expected to function once established.
What are the congressional committees of jurisdiction?
The BUILD Act defines "appropriate congressional committees" as the Senate Foreign Relations and Appropriations committees and the House Foreign Affairs and Appropriations committees (§1402(1)). It imposes a number of reporting and notification requirements on the IDFC with respect to these congressional committees. These committees have typically been the same ones in which legislation related to OPIC and USAID is introduced.
What is the IDFC's mission?
The BUILD Act establishes the IDFC for the stated purpose of mobilizing private-sector capital and skills for the economic benefit of less-developed countries, as well as countries in transition from nonmarket to market economies, in support of U.S. development assistance and other foreign policy objectives (§1412(b)). This is very similar to the mission of OPIC, as described in the Foreign Assistance Act of 1961, as amended.
The legislation includes several provisions intended to ensure that the corporation remains focused on this development mission. The act directs the IDFC to prioritize support to countries with low-income or lower-middle-income economies, establishes a position of Chief Development Officer on the board, and requires that a performance measurement system be developed that includes, among other things, standards and methods for ensuring the development performance of the corporation's portfolio. The annual report required by the BUILD Act also must include an analysis of the desired development outcomes for IDFC-supported projects and the extent to which the corporation is meeting associated development metrics, goals, and objectives.
How will the IDFC be managed?
The BUILD Act establishes a Board of Directors ("Board"), a Chief Executive Officer (CEO), a Deputy Chief Executive Officer (Deputy CEO), a Chief Risk Officer, a Chief Development Officer, and any other officers as the Board may determine, to manage the IDFC (§1413(a)).
The BUILD Act vests all powers of the IDFC in the nine-member Board of Directors (§1413(b)). By statute, the Board is composed of
a C hief Executive Officer ; four U.S. government officials —the Secretary of State, USAID Administrator, Secretary of the Treasury, and Secretary of Commerce (or their designees); and four non government members appointed by the President of the United States by and with the advice and consent of the Senate, with "relevant experience" to carry out the IDFC's purpose, which "may include experience relating to the private sector, the environment, labor organizations, or international development." These members have three-year terms, can be reappointed for one additional term, and serve until their successors are appointed and confirmed.
The Board's Chairperson is the Secretary of State and the Vice Chairperson is the USAID Administrator (or their designees).
The Board differs in size and potentially composition from that of OPIC's Board. By statute, OPIC's 15-member Board of Directors is composed of eight "private sector" Directors, with specific requirements for representation of small business, labor, and cooperatives interests, and seven "federal government" Directors (including the OPIC President, USAID Administrator, U.S. Trade Representative, and a Labor Department officer). The President of the United States appoints the Board Chairman and Vice Chairman from among the members of the Board.
Five members of the Board constitutes a quorum for the transaction of business. The Board is required to hold at least two public hearings each year to allow for stakeholder input.
What will be the responsibilities of the officers?
The BUILD Act establishes four officers for IDFC management. A Chief Executive Officer, who is under the Board's direct authority, is responsible for the IDFC's management and exercising powers and duties as the Board directs (§1413(d)). The BUILD Act also establishes a Deputy Chief Executive Officer (§1413(e)). The Chief Executive Officer and Deputy Chief Executive Officer are appointed by the President of the United States, by and with the advice and consent of the Senate, and serve at the pleasure of the President.
The act outlines the positions of the Chief Risk Officer and Chief Development Officer in more detail. Both officers are to be appointed by the CEO, subject to Board approval, from among individuals with senior-level experience in financial risk management and development, respectively. They each are to report directly to the Board and are removable only by a majority Board vote. The Chief Risk Officer, in coordination with the Audit Committee established by the act, is responsible for developing, implementing, and managing a comprehensive process for identifying, assessing, monitoring, and limiting risks to the IDFC (§1413(f)). The Chief Development Officer's responsibilities include coordinating the IDFC's development policies and implementation efforts with USAID, the Millennium Challenge Corporation (MCC), and other relevant U.S. government departments and agencies; managing IDFC employees dedicated to working on transactions and projects codesigned with USAID and other relevant U.S. government entities; and authorizing and coordinating interagency transfers of funds and resources to support the IDFC (§1413(g)). OPIC's enabling legislation does not include either a specific Chief Risk Officer or Chief Development Officer.
Will the IDFC have any advisory support?
The BUILD Act establishes a Development Advisory Council to advise the Board on the IDFC's development objectives (§1413(i)). By statute, its members are Board-appointed on the recommendation of the CEO and Chief Development Officer, and composed of no more than nine members "broadly representative" of NGOs and other international development-related institutions. Its functions are to advise the Board on the extent to which the IDFC is meeting its development mandate and any suggestions for improvements.
What oversight structures will the IDFC have?
The BUILD Act establishes several oversight structures to govern the agency overall and particular aspects.
Unlike OPIC, which is overseen by the USAID Inspector General, the IDFC is to have its own Inspector General (IG) (§1414) to conduct reviews, investigations, and inspections of its operations and activities. In addition, the act requires the Board to establish a "transparent and independent accountability mechanism" to annually evaluate and report to the Board and Congress regarding statutory compliance with environmental, social, labor, human rights, and transparency standards; provide a forum for resolving concerns regarding the impacts of specific IDFC-supported projects with respect to such standards; and provide advice regarding IDFC projects, policies, and practices (§1415).
The BUILD Act also requires the IDFC to establish a Risk Committee and Audit Committee to ensure monitoring and oversight of the IDFC's investment strategies and finances (§1441). Both committees are under the direction of the Board. The Risk Committee is responsible for overseeing the formulation of the IDFC's risk governance structure and risk profile (e.g., strategic, reputational, regulatory, operational, developmental, environmental, social, and financial risks) (§1441(b)), while the Audit Committee is responsible for overseeing the IDFC's financial performance management structure, including the integrity of its internal controls and financial statements, the performance of internal audits, and compliance with legal and regulatory finance-related requirements (§1444(c)).
IDFC Operations
For what purposes can the IDFC use its authorities?
In general, the IDFC's authorities are limited to (§1421(a))
carrying out U.S. policy and the IDFC's purpose, as outlined in the statute; mitigating risks to U.S. taxpayers by sharing risks with the private sector and qualifying sovereign entities through cofinancing and structuring of tools; and ensuring that support provided is "additional" to private-sector resources by mobilizing private capital that would otherwise not be deployed without such support.
The emphasis on additionality reflects OPIC's current policy, but is not explicitly in OPIC's enabling legislation. Policymakers have debated whether OPIC supports or crowds out private-sector activity.
What financial authorities and tools will the IDFC have?
Under the BUILD Act, the IDFC's authorities would expand beyond OPIC's existing authorities to make loans and guarantees and issue insurance or reinsurance (see Table 1 ). They would also include the authority to take minority equity positions in investments. USAID-drawn authorities include technical assistance and the establishment of enterprise funds. In addition, the IDFC would have the authority to conduct feasibility studies on proposed investment projects (with cost-sharing) and provide technical assistance. A chart depicting the current development finance functions of relevant U.S. agencies, as well as how those functions may be shifted by the BUILD Act, is in the Appendix .
The IDFC's functions are discussed below.
Loan and Guarantees. The IDFC is authorized to make loans or guarantees upon the terms and conditions that it determines (§1421(b)). Loans and guarantees are subject to the Federal Credit Reform Act of 1990 (FCRA).
IDFC financing may be denominated and repayable in either U.S. dollars or foreign currencies, the latter only in cases where the Board determines there is a "substantive policy rationale." This is distinct from OPIC, which is limited to making loans in U.S. currency.
Equity Investments. The BUILD Act authorizes the IDFC to take equity stakes in private investments (§1421(c)). The IDFC can support projects as a minority investor acquiring equity or quasiequity stake of any entity, including as a limited partner or other investor in investment funds, upon such terms and conditions as the IDFC may determine. Loans and guarantees may be denominated and repayable in either U.S. dollars or foreign currencies, the latter only in cases where the Board determines there is a "substantive policy rationale." The IDFC is required to develop guidelines and criteria to require that the use of equity authority has a clearly defined development and foreign policy purpose, taking into account certain factors.
The BUILD Act places limitations on equity investment, both in terms of the specific project and the overall support. The total amount of support with respect to any project cannot exceed 30% of the total amount of all equity investment made to that project at the time the IDFC approves support. Furthermore, equity support is limited to no more than 35% of the IDFC's total exposure. The BUILD Act directs the IDFC to sell and liquidate its equity investment support as soon as commercially feasible commensurate with other similar investors in the project, taking into account national security interests of the United States.
The addition of equity authority is potentially significant. OPIC does not have the capacity to make equity investments; it can only provide debt financing as a senior lender, meaning it is repaid first in the event of a loss. Foreign DFIs often have been reluctant to partner with OPIC because they would prefer to be on an equal footing. Potential expansion of OPIC's equity authority capability has met resistance from some Members of Congress in the past, based on discomfort with the notion of the U.S. government acquiring ownership stakes in private investments, among other concerns.
Insurance and r einsurance . The IDFC may issue insurance or reinsurance to private-sector entities and qualifying sovereign entities assuring protection of their investments in whole or in part against political risks (§1421(d)). Examples include currency inconvertibility and transfer restrictions, expropriation, war, terrorism, civil disturbance, breach of contract, or non-honoring of financial obligations.
Investment promotion . The IDFC is authorized to initiate and support feasibility studies for planning, developing, and managing of and procurement for potential bilateral and multilateral development projects eligible for support (§1421(e)). This includes training on how to identify, assess, survey, and promote private investment opportunities. The BUILD Act directs the IDFC, to the maximum extent practicable, to require cost-sharing by those receiving funds for investment promotion.
Special projects and programs. The IDFC is authorized to administer and manage special projects and programs to support specific transactions, including financial and advisory support programs that provide private technical, professional, or managerial assistance in the development of human resources, skills, technology, capital savings, or intermediate financial and investment institutions or cooperatives (§1421(f)). This includes the initiation of incentives, grants, or studies for the energy sector, women's economic empowerment, microenterprise households, or other small business activities.
Enterprise funds. The BUILD Act authorizes but does not require the transfer of existing USAID enterprise funds to the IDFC (§1421(g)). Existing Europe/Eurasia enterprise funds are winding down. The two newer funds, in Tunisia and Egypt, remain primarily funded by U.S. government grant funds and are private sector-managed, arguably requiring close USAID oversight and an in-country presence to ensure the funds fulfill a development, rather than a purely for-profit, mission. As such, their removal to an agency without either feature may make this model less effective as a development instrument. The BUILD Act also gives the IDFC authority to establish new enterprise funds. It has been argued, however, that the IDFC's authority to conduct equity investment would make enterprise funds unnecessary.
Will the IDFC's activities have U.S. government backing?
All of the IDFC's authorities, like prior support by OPIC and USAID components, are backed by the full faith and credit of the U.S. government. In other words, the full faith and credit of the U.S. government is pledged for full payment and performance of obligations under these authorities (§1434(e)).
Will the IDFC have an exposure limit?
The maximum contingent liability (overall portfolio) that the IDFC can have outstanding at any one time cannot exceed $60 billion (§1433). This is more than double OPIC's current exposure limit—$29 billion. In recent years, OPIC support has reached record highs—totaling $23.2 billion in FY2017. While the IDFC's exposure cap is small compared to the potentially trillions of dollars that China is pouring into development efforts like the BRI, supporters argue that the IDFC could catalyze other private investment to developing countries through the U.S. development finance model.
How will the IDFC be funded?
According to the BUILD Act, the IDFC will be funded through a Corporate Capital Account comprised of fees for services, interest earnings, returns on investments, and transfers of unexpended balances from predecessor agencies (§1434). Annual appropriations legislation will designate a portion of these funds that may be retained for operating and program expenses, while the rest will revert to the Treasury, much like the current OPIC funding process. Like OPIC, the new IDFC is expected to be self-sustaining, meaning that anticipated collections are expected to exceed expenses, resulting in a net gain to the Treasury. The act also authorizes transfers of funds appropriated to USAID and the State Department to the IDFC. This authority will allow USAID missions and bureaus to continue to fund DCA activities related to their projects through transfers, as they now do through transfers to the DCA office within USAID.
The BUILD Act does not authorize annual appropriations levels for administrative and program expenses for the new IDFC, and it is unclear how future appropriations provisions for the IDFC will compare to current OPIC and DCA provisions. In FY2018, appropriators made $79.2 million of OPIC revenue available for OPIC's administrative expenses and $20 million available for loans and loan guarantees. DCA was appropriated $10 million for administrative expenses and authorized to use up to $55 million transferred from foreign assistance accounts managed by USAID to support loan guarantees.
How are losses to be repaid?
In general, if the IDFC determines that the holder of a loan guaranteed by the IDFC suffers a loss as a result of default by the loan borrower, the IDFC shall pay to the holder the percentage of loss per contract after the holder of the loan has made further collection efforts and instituted any required enforcement proceedings (§1423). The IDFC also must institute recovery efforts on the borrower. The BUILD Act puts limitations on the payment of losses, such as generally limiting it to the dollar value of tangible or intangible contributions or commitments made in the project plus interest, earnings, or profits actually accrued on such contributions or commitments to the extent provided by such insurance, reinsurance, or guarantee. The Attorney General must take action as may be appropriate to enforce any right accruing to the United States as a result of the issuance of any loan or guarantee under this title. The BUILD Act also imposes certain limitations on payments of losses.
For how long is the IDFC authorized?
The BUILD Act provides that the IDFC's authorities terminate seven years after the date of the enactment of the act (§1424). It also provides that the IDFC terminates on the date on which its portfolio is liquidated. This is markedly different from the annual extensions of authority required for OPIC in recent years. A longer-term authorization as given to the IDFC could be beneficial for supporting investments in infrastructure projects, which often are multiyear endeavors, as well as underscore a sustained U.S. commitment to respond to China's BRI.
Statutory Parameters for IDFC Project Support
Will there be terms and conditions of IDFC support?
The BUILD Act authorizes the IDFC to set terms and conditions for its support, subject to certain parameters.
Reason for support. The IDFC is only permitted to provide its support if it is necessary either to alleviate a credit market imperfection or to achieve a specified goal of U.S. development or foreign policy by providing support in the most efficient way to meet those objectives on a case-by-case basis (§1422(b)(1)).
Length of support. The final maturity of a loan or guarantee cannot exceed 25 years or the debt servicing capabilities of the project to be financed by the loan, whichever is lesser (§1422(b)(2)).
Risk-sharing. With respect to any loan guarantee to a project, the IDFC must require parties to bear the risk of loss in an amount equal to at least 20% of the guaranteed support by the IDFC to the project (§1422(b)(3))—compared to 50% risk-sharing in most cases for OPIC.
U.S. financial interest. The IDFC may not make a guarantee or loan unless it determines that the borrower or lender is responsible and that adequate provision is made for servicing the loan on reasonable terms and protecting the U.S. financial interest (§1422(b)(4)).
Interest rate. The interest rate for direct loans and interest supplements on guaranteed loans shall be set by reference to a benchmark interest rate (yield) on marketable Treasury securities or other widely recognized or appropriate comparable benchmarks, as determined in consultation with the Director of the Office of Management and Budget and the Secretary of the Treasury. The IDFC must establish appropriate minimum interest rates for loan guarantees, and other instruments as necessary. The minimum interest rate for new loans must be adjusted periodically to account for changes in the interest rate of the benchmark financial interest (§1422(b)(5) and (6)).
Fees and premiums. The IDFC must set fees or premiums for support at levels that minimize U.S. government cost while supporting the achievement of objectives for that support. The IDFC must review fees for loan guarantees periodically to ensure that fees on new loan guarantees are at a level sufficient to cover the IDFC's most recent estimates of its cost (§1422(b)(7)).
Budget authority. The IDFC may not make loans or loan guarantees except to the extent that budget authority to cover their costs is provided in advance in an appropriations act (§1422(b)(10)).
Standards. The IDFC must prescribe explicit standards for use in periodically assessing the credit risk of new and existing direct loans or guaranteed loans. It also must rely upon specific standards to assess the developmental and strategic value of projects for which it provides support and should only provide the minimum level of support needed to support such projects (§1422(b)(9) and (11)).
Seniority. Any loan or guarantee by the IDFC is to be on a senior basis or pari passu with other senior debt unless there is a substantive policy rationale for otherwise (§1422(b)(12)).
In which countries can the IDFC operate?
In general, the IDFC is to prioritize support for less-developed countries (i.e., with a "low-income economy or a lower-middle-income economy"), as defined by the World Bank (§1402 and §1411). It must restrict support in less-developed countries with "upper-middle-income economies" unless (1) the President certifies to Congress that such support furthers U.S. national economic or foreign policy interests; and (2) such support is designed to have "significant development outcomes or provide developmental benefits to the poorest population" of that country (§1412). This arguably narrows the IDFC's focus to low-income and lower-middle-income countries, compared to OPIC's statutory requirements and practice.
The IDFC may provide support in any country the government of which has entered into an agreement with the United States authorizing the IDFC to provide support (§1431).
What considerations will factor into the IDFC's decision to support projects?
Preference for U.S. sponsors. The IDFC must give preferential consideration to projects sponsored by or involving private-sector entities that are "U.S. persons"—defined as either U.S. citizens or entities owned or controlled by U.S. citizens (§1451(b)). This presumably eases OPIC's requirement for projects to have a "U.S. connection" based on U.S. citizenship or U.S. ownership shares; the particular requirements vary by program. This change arguably opens up the possibility that the IDFC could support investments by foreign project sponsors, assuming they meet other statutory requirements.
Preference for countries in compliance with i nternational trade obligations . The IDFC must consult at least annually with the U.S. Trade Representative (USTR) regarding countries' eligibility for IDFC support and compliance with international trade obligations (§1451(c)). The IDFC must give preferential consideration to countries in compliance with (or making substantial progress in coming into compliance with) their international trade obligations. While OPIC does not have a comparable obligation, the USTR (or a designated Deputy USTR) is a member of OPIC's Board of Directors.
Worker rights. The IDFC can only support projects in countries taking steps to adopt and implement laws that extend internationally recognized worker rights (as defined in §507 of the Trade Act of 1974, 19 U.S.C. 2467) to workers in that country. It must include specified language in all contracts for support regarding worker rights and child labor (§1451(d)). These provisions appear to be similar to OPIC's requirements in terms of worker rights.
Environmental and social impact. The Board is prohibited from voting in favor of any project that is likely to have "significant adverse environmental or social impact impacts that are sensitive, diverse, or unprecedented" unless it provides an impact notification (§1451(e)). The act requires that (1) the notification be at least 60 days before the date of the Board vote and take the form of an environmental and social impact assessment or initial audit; (2) the notification be made available to the U.S. public and locally affected groups and nongovernmental organizations (NGOs) in the host country; and (3) the IDFC include provisions in any contract relating to the project to ensure mitigation of any such adverse environmental or social impacts. OPIC's enabling legislation has substantially similar requirements as the IDFC's first two requirements with respect to environmental and social impacts.
Women's economic empowerment consideration. The IDFC must consider the impact of its support on women's economic opportunities and outcomes and take steps to reduce gender gaps and maximize development impact by working to improve women's economic opportunities (§1451(f)). This is distinct from OPIC's statutory requirements.
C ountries embracing private enterprise. The IDFC is directed to give preferential consideration to projects for which support may be provided in countries whose governments have demonstrated "consistent support for economic policies that promote the development of private enterprise, both domestic and foreign, and maintain the conditions that enable private enterprise to make full contribution to the development of such countries" (§1451(g)). The BUILD Act gives examples of market-based economic policies, protection of private property rights, respect for rule of law, and systems to combat corruption and bribery. OPIC's private enterprise-related requirement appears to be more limited.
Small business support. The IDFC must, using broad criteria, to the maximum extent possible, give preferential consideration to supporting projects sponsored by or involving small business, and ensure that small business-related projects are not less than 50% of all projects for which the IDFC provides support and that involve U.S. persons (§1451(i)). OPIC's small business support requirement has a 30% target.
What limitations will there be on the IDFC's support?
Limitation on support for a single entity. No entity receiving IDFC support may receive more than an amount equal to 5% of the IDFC's maximum contingent liability (§1451(a)). In comparison, OPIC has specific limitations by program; for example, no more than 10% of maximum contingent liability of investment insurance can be issued to a single investor, and no more than 15% of maximum contingent liability of investment guarantees can be issued to a single investor.
Boycott restriction. When considering whether to approve a project, the IDFC must take into account whether the project is sponsored by or substantially affiliated with any individual involved in boycotting a country that is "friendly" with the United States and is not subject to a boycott under U.S. law or regulation (§1451(h)). The measure is aimed at ensuring that beneficiaries of the new DFI's support are "not undermining [U.S.] foreign policy goals." Concerns about boycotts against Israel appear to figure prominently.
International terrorism/human rights violations restriction . The IDFC is prohibited from providing support for a government or entity owned or controlled by a government if the Secretary of State has determined that the government has repeatedly provided support for acts of international terrorism or has engaged in a consistent pattern of gross violations of internationally recognized human rights (§1453(a)). In comparison, OPIC must take into account human rights considerations in conducting its programs.
Sanctions restriction. The IDFC is also prohibited from all dealings related to any project prohibited under U.S. sanctions laws or regulations, including dealings with persons on the list of specially designated persons and blocked persons maintained by the Office of Foreign Assets Control (OFAC) of the Department of the Treasury, except to the extent otherwise authorized by the Secretaries of the Treasury or State (§1453(b) and (c)). OPIC is subject to sanctions restrictions as well.
What requirements will the IDFC have to avoid market distortion?
Commercial banks can provide financing for foreign investment, such as through project finance, and political risk insurance. The BUILD Act requires that before the IDFC provides support, it must ensure that private-sector entities are afforded an opportunity to support the project. The IDFC must develop safeguards, policies, and guidelines to ensure that its support supplements and encourages, but does not compete with, private-sector support; operates according to internationally recognized best practices and standards to avoid market-distorting government subsidies and crowding out of private-sector lending; and does not have significant adverse impact on U.S. employment (§1452).
Monitoring and Transparency
What performance measures and evaluation will the IDFC have?
The BUILD Act requires the IDFC to develop a performance measurement system to evaluate and monitor its projects and to guide future project support, using OPIC's current development impact measurement system as a starting point (§1442). The IDFC must develop standards for measuring the projected and ex post development impact of a project. It also must regularly make information about its performance available to the public on a country-by-country basis.
Measuring development impact can be complicated for a number of reasons, including definitional issues, difficulties isolating the impact of development finance from other variables that affect development outcome, challenges in monitoring projects for development impact after DFI support for a project ends, and resource constraints. Comparing development impacts across DFIs is also difficult as development indicators may not be harmonized. To the extent that the proposed DFI raises questions within the development community about whether it would be truly "developmental" at its core, rigorous adherence to development objectives through a measurement system will likely be critical to gauging its effectiveness. Moreover, Congress may choose to take a broader view of U.S. development impact, given the active U.S. contributions to regional and multilateral DFIs.
What are the IDFC's reporting and notification requirements?
At the end of each fiscal year, the IDFC must submit to Congress a report including an assessment of its economic and social development impact, the extent to which its operations complement or are compatible with U.S. development assistance programs and those of qualifying sovereign entities, and the compliance of projects with statutory requirements (§1443). In addition, no later than 15 days before the IDFC makes a financial commitment over $10 million, the Chief Executive Officer must submit to the appropriate congressional committees a report with information on the financial commitment (§1446(a) and (b)). The CEO also must notify the committees no later than 30 days after entering into a new bilateral agreement (§1446(c)).
What information must it make available to the public?
The IDFC must "maintain a user-friendly, publicly available, machine-readable database with detailed project-level information," including description of support provided, annual report information provided to Congress, and project-level performance metrics, along with a "clear link to information on each project" online (§1444).
The new agency also must cooperate with USAID to engage with investors to develop a strategic relationship "focused at the nexus of business opportunities and development priorities" (§1445). This includes IDFC actions to develop risk mitigation tools and provide transaction-structuring support for blending finance models (generally referring to the strategic use of public or philanthropic capital to catalyze private-sector investment for development purposes).
Implementation
How and when is the IDFC expected to become operational?
The BUILD Act requires the President to submit to Congress within 120 days of enactment a reorganization plan that details the transfer of agencies, personnel, assets, and obligations to the IDFC. The reorganization plan is expected to be submitted by early February 2019.
The President must consult with Congress on the plan not less than 15 days before the date on which the plan is transmitted, and before making any material modification or revision to the plan before it becomes operational.
The reorganization plan becomes effective for the IDFC on the date specified in the plan, which may not be earlier than 90 days after the President has transmitted the reorganization plan to Congress (§1462(e)). The actual transfer of functions may occur only after the OPIC President and CEO and the USAID Administrator jointly submit to the foreign affairs committees a report on coordination, including a detailed description of the procedures to be followed after the transfer of functions to coordinate between the IDFC and USAID (§1462(c)). During the transition period, OPIC and USAID are to continue to perform their existing functions.
Thus, the IDFC could become operational as early as summer 2019 based on this timeline ( Figure 2 ). OPIC anticipates that the IDFC could become operational as of October 1, 2019. At that time, OPIC is to be terminated and its enabling legislation is to be repealed (§1464).
How will the IDFC relate to other U.S. trade and investment promotion efforts?
The IDFC is to replace OPIC, and, as such, would be among other federal entities that play a role in promoting U.S. trade and investment efforts. The Export-Import Bank (Ex-Im Bank) provides direct loans, loan guarantees, and export credit insurance to support U.S. exports, in order to support U.S. jobs. The Trade and Development Agency (TDA) aims to link U.S. businesses to export opportunities in overseas infrastructure and other development projects, in order to support economic growth in these overseas markets. TDA provides funding for project preparation activities, such as feasibility studies, and partnership building, such as reverse trade missions bringing foreign decisionmakers to the United States. The IDFC's authority to conduct feasibility studies and provide other forms of technical assistance has raised questions about overlap with the functions of TDA, but BUILD Act supporters note that while functions may overlap, they will be for different purposes—supporting U.S. investment abroad in the case of the IDFC and supporting U.S. exports in the case of TDA.
There may also be some overlap of function between the IDFC and USAID if the reorganization plan calls for the transfer of the Office of Private Capital and Microenterprise from USAID to the IDFC and the IDFC starts its own microfinance programs, as microfinance activities are integrated throughout USAID and would not cease with the transfer of the office. Similarly, if the IDFC uses its authority to create new enterprise funds while declining to transfer existing funds under USAID authority, there may be some overlap in that authority as well.
Issues for the 116th Congress
The 116 th Congress will have responsibility for overseeing the implementation of the BUILD Act, including review of the reorganization plan, the transition it prescribes, and impact on U.S. foreign policy objectives. As part of this process, Congress may consider a number of policy issues, including the following:
Is the Administration meeting the implementation requirements of the BUILD Act? Does the reorganization plan reflect congressional intent, and are the choices made within the discretion allowed by the BUILD Act justified? How can the IDFC best balance its mission to support U.S. businesses in competing for overseas investment opportunities with its development mandate? What are the policy trade-offs associated with the capacity limits, authorities, policy parameters, and other features formulated by Congress in the BUILD Act? Does the legislation find the right balance, or does the implementation process identify areas where legislative changes might be beneficial? In creating the BUILD Act, Congress gave great consideration to strategic foreign policy concerns. In addition to providing commercial opportunities for U.S. firms, development finance may shape how countries connect to the rest of the world through ports, roads, and other transportation and technological links, providing footholds for the United States to advance its approaches to regulations and standards. Another potential role for development finance is to provide a means to spread U.S. values on governance, transparency, and environmental and social safeguards. Does the current statutory framework enable the IDFC to respond effectively to U.S. strategic concerns, particularly with regard to China's BRI? More fundamentally, is the IDFC's aim to compete with, contain, or counter the BRI and Chinese world vision it represents? Beyond establishing the IDFC, Congress may consider whether to advocate for creating international "rules for the road" for development finance. Such rules could help ensure that the IDFC operates on a "level playing field" relative to its counterparts, given the variation in terms, conditions, and practices of DFIs internationally. U.S. involvement in developing such rules could help advance U.S. strategic interests. However, such rules would only be effective to the extent that major suppliers of development finance are willing to abide by them. For example, China is not a party to international rules on export credit financing, though it has been involved in recent negotiations to develop new rules on such financing. Should Congress press the Administration to pursue international rules on development finance? Is it feasible to engage China in this regard?
Appendix. Reorganization of U.S. Government Development and/or Finance Functions
Summary:
| Members of Congress and Administrations have periodically considered reorganizing the federal government's trade and development functions to advance various U.S. policy objectives. The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), which was signed into law on October 5, 2018 (P.L. 115-254), represents a potentially major overhaul of U.S. development finance efforts. It establishes a new agency—the U.S. International Development Finance Corporation (IDFC)—by consolidating and expanding existing U.S. government development finance functions, which are conducted primarily by the Overseas Private Investment Corporation (OPIC) and some components of the U.S. Agency for International Development (USAID).
While the IDFC is expected to carry over OPIC's authorities and many of its policies, there are some key distinctions. For example, in comparison to OPIC, the new IDFC, by statute, is to have the following:
More "tools" to provide investment support (e.g., authority to make limited equity investments and provide technical assistance). More capacity (a $60 billion exposure cap compared to OPIC's $29 billion exposure cap). A longer authorization period (seven years compared to OPIC's year-to-year authorization through appropriations legislation in recent years). More specific oversight and risk management (including its own Inspector General [IG], compared to OPIC, which is under the USAID IG's jurisdiction).
A key policy rationale for the BUILD Act was to respond to China's Belt and Road Initiative (BRI) and China's growing economic influence in developing countries. In this regard, the IDFC aims to advance U.S. influence in developing countries by incentivizing private investment as an alternative to a state-directed investment model. The BUILD Act also aims to increase the effectiveness and efficiency of U.S. government development finance functions, as well as to achieve greater cost savings through consolidation.
The BUILD Act requires the Administration to submit to Congress a reorganization plan within 120 days of enactment of the act, and the IDFC is not permitted to become operational any sooner than 90 days after the President has transmitted the reorganization plan.
The 116th Congress will have responsibility for overseeing the Administration's implementation of the BUILD Act. As the IDFC is operationalized, Members of Congress may examine whether the current statutory framework allows the IDFC to balance both its mandates to support U.S. businesses in competing for overseas investment opportunities and to support development, as well as whether it enables the IDFC to respond effectively to strategic concerns especially vis-à-vis China. Congress also may consider whether to press the Administration to pursue international rules on development finance comparable to those that govern export credit financing. More broadly, the IDFC's establishment could renew legislative debate over the economic and policy benefits and costs of U.S. government activity to support private investment, and whether such activity is an effective way to promote broad U.S. foreign policy objectives. | 96 | 54,332 | 54,334 | 54,334 | ... [The rest of the report is omitted]
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crs_R44668 | crs_R44668_0 | You are given a report by a government agency. Write a one-page summary of the report.
Report:
Introduction
The Temporary Assistance for Needy Families (TANF) block grant was created by the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ( P.L. 104-193 ). It replaced the program of cash assistance for needy families that dated back to the New Deal, Aid to Families with Dependent Children (AFDC), and some of its related programs. The enactment of the 1996 welfare reform law was the culmination of a debate about how to overhaul programs providing cash assistance to needy families with children—specifically, those headed by single mothers—that spanned four decades: from the 1960s to the 1990s.
The 1996 welfare law provided both program authority and funding (appropriations) for TANF through the end of FY2002. Most of the legislative activity on TANF since 2002 has been to extend the program funding and financing authority for TANF. Most of these extensions did not change TANF policy, though policy changes were included in extensions enacted in 2006, 2010, and 2012. The TANF Extension Act of 2019 ( P.L. 116-4 ) extended TANF funding through June 30, 2019.
This report will begin with a brief overview of the history of the AFDC program and the welfare reform debates of the 1960s to the 1990s. That overview will be followed by a summary of the 1996 welfare reform law and the changes made since 1996. The report concludes with a detailed chronology of TANF legislation.
Brief History of AFDC and the Welfare Reform Debates
The modern form of cash assistance for needy families with children dates back to the Progressive Era of the early 1900s, and state- or locally funded mothers' pensions for "fatherless" families. The purpose of these programs was to permit these mothers to stay at home and care for their children.
Federal funding for these programs was first provided in the Social Security Act of 1935 (P.L. 74-271) through the Aid to Dependent Children (ADC) program, later renamed the Aid to Families with Dependent Children program (AFDC). Many of the later changes, and the welfare reform debates of the 1960s to the 1990s, focused on issues of work and whether providing cash to nonworking single mothers served as disincentives for both work and marriage.
However, the history of the ADC/AFDC program touched many other facets of the well-being of children and their families. ADC/AFDC provided federal funding for social services, medical assistance, child care, and foster care. These were later spun off into separate programs, with dedicated federal funding. While much of the focus of the welfare reform debates was on the single mother (custodial parent), ADC/AFDC policy also touched on noncustodial parents. The Child Support Enforcement (CSE) program was created, in great part, to reimburse states and the federal government for the costs of providing assistance to single mothers, and making noncustodial fathers responsible for these costs. CSE has evolved into a program that distributes child support payments collected from noncustodial parents to custodial parents, mostly to families that have never received or are no longer receiving cash assistance.
The Early Years: 1930s to mid-1950s
The Social Security Act of 1935 (P.L. 74-271) created the social insurance programs of Old Age Benefits and unemployment compensation, where workers earned protection against lost wages because of old age and involuntary unemployment. It also created federal funding for state programs providing assistance for low-income aged persons, blind persons, and programs for needy families with children where one parent (usually the father) was unable to support the family.
The ADC program provided grants to the states to help finance programs to assist children who were "deprived of parental support or care by reason of the death, continued absence from the home, or physical or mental incapacity of a parent" and who lived with the other parent or a relative. States ran the program and determined eligibility for its benefits. The federal government provided funding for a portion of the expenditures made in state ADC programs.
The legislative history of the 1935 act explicitly stated that the purpose of ADC payments was to permit mothers to stay at home rather than work:
The very phrases "mothers' aid" and "mothers' pensions" place an emphasis equivalent to misconstruction of the intention of these laws. These are not primarily aids to mothers but defense measures for children. They are designed to release from the wage-earning role the person whose natural function is to give her children the physical and affectionate guardianship necessary not alone to keep them from falling into social misfortune, but more affirmatively to rear them into citizens capable of contributing to society.
The 1935 Social Security Act left administration and many decisions about eligibility to the states. States also determined ADC benefit amounts.
In the early years, families receiving ADC benefits were often headed by a widow or had a disabled father. However, over time the natures of both the program and the families it aided changed. The Social Security Amendments of 1939 (P.L. 76-379) added "survivor" benefits to the program of old age benefits, renaming it Old Age and Survivors Insurance. Survivor benefits, like old age benefits, were social insurance benefits earned through work in a covered job and paid to spouses and children upon the death of a worker or retiree. This provided an alternative, and more universal, means of aiding widows and their children. The Social Security Amendments of 1956 (P.L. 84-881) added Disability Insurance to Old Age and Survivor Insurance, with the combined program now commonly referred to as Social Security. The 1956 amendments also expanded the types of jobs covered by Social Security. These changes, too, provided more universal means of aiding the types of families that were originally assisted by ADC.
The families receiving ADC increasingly were families where the father was alive but absent. The caseload also became increasingly nonwhite.
The mid-1950s to the 1960s: Self-Sufficiency and Work
The issue of whether single mothers should work was also much debated. The intent of ADC to allow single mothers to stay home and raise their children was often met with resistance at the state and local levels. It was also contrary to the reality that low-income women, particularly women of color, were sometimes expected to, and often did, work. Further, the increase in women's labor force participation in the second half of the 20 th century—particularly among married white women—eroded support for payments that permitted single mothers to remain at home and out of the workforce.
The Social Security Amendments of 1956 (P.L. 84-881) added the goals of creating "self-sufficiency" and strengthening family life to ADC, along with funding for services that would seek to achieve these goals.
P.L. 87-31, enacted in 1961, first made cash assistance benefits available to families headed by two able-bodied parents at state option. This authority was temporary at first (in response to an economic downturn), but was later made permanent. In 1962, the program was renamed Aid to Families with Dependent Children. The 1962 amendments, the Public Welfare Amendments of 1962 (P.L. 87-543), also established a community work and training program for adult AFDC recipients, largely intended for men in two-parent families.
The Social Security Amendments of 1967 (P.L. 90-248) enacted both financial incentives for adult recipients to work and, for the first time, requirements for AFDC mothers to work. These amendments required states to disregard from a family's countable income some earnings when determining its "need" and benefits. The amendments also created a new work program under AFDC—the Work Incentive Program (WIN)—that expanded the population served by an AFDC-related work program to women.
The Late 1960s and 1970s: Negative Income Tax and Guaranteed Incomes
The late 1960s marked the beginning of the welfare reform debates, with proposals put to Congress to completely replace AFDC with a different type of program. This occurred as AFDC's costs and the number of families receiving its benefits increased. In 1964, fewer than 1 million families received AFDC. By 1973, the AFDC rolls had increased to 3.1 million families.
For the decade beginning in 1969, these proposals were based on the "negative income tax" (NIT) concept. The NIT proposals would have provided a guaranteed income to families who had no earnings (the "income guarantee" that was part of these proposals). For families with earnings, the NIT would have provided for a gradual reduction in the benefit as earnings increased.
President Nixon proposed to replace AFDC with an NIT-type program in 1969, the Family Assistance Plan (FAP). This proposal also would have nationalized the program, with the federal government paying the income guarantee and states able to supplement the federal guarantee with their own funds. This legislation was not enacted; it passed the House twice but never passed the Senate. In 1972, the Senate Finance Committee proposed to guarantee jobs—rather than income—for parents of school-age children. That proposal, too, did not ultimately pass.
President Carter also proposed an NIT-based cash assistance program coupled with a public service job program in 1977. President Carter's proposals died in committee (they were never reported to either the full House or Senate). A less ambitious proposal from President Carter in 1979 passed the House but did not pass the Senate.
The 1980s: Devolution and Early Experiments
The proposals to change AFDC made by President Reagan at the beginning of his Administration differed sharply from the earlier welfare reform proposals. They emphasized devolution to the states in decisionmaking, rather than nationalization. They also emphasized requirement to work, rather than work incentives. The Omnibus Budget Reconciliation Act of 1981 ( P.L. 97-35 ) limited the earnings disregard that was enacted in 1967, ending benefits for many who were on the rolls and working. It also gave states expanded authority to require recipients to engage in community service or work experience programs (unpaid work) in exchange for their AFDC benefit. In 1982, President Reagan proposed to completely devolve cash assistance for families with children. That proposal did not pass.
In the 1980s, there was increasing attention to "welfare dependency." Research at that time showed that while many mothers were on cash assistance for a short period of time, a substantial minority of mothers remained on the rolls for long periods. Additionally, policymakers began to focus on the possibility that a single mother who left welfare for work might be financially worse off than if she did not work and continued to collect benefits. Such a single mother, who might command relatively low wages in the labor force, risked losing medical assistance from Medicaid for herself and her children and faced work-related costs such as child care.
The Family Support Act of 1988 ( P.L. 100-485 ) established in AFDC the notion of mutual responsibility between the cash assistance recipient and the state. It created the Job Opportunities and Basic Skills (JOBS) Training program, which provided employment services, education, and training for cash assistance recipients. The Family Support Act also mandated that states provide benefits for two-parent families, though it was on more restrictive terms than those for single-parent families.
The Family Support Act also established the Transitional Medical Assistance (TMA) program that continued Medicaid coverage for a period of time for those who otherwise would have lost eligibility for Medicaid when moving from welfare to work. Further, it guaranteed child care for AFDC recipients engaged in work activities and provided time-limited (transitional) child care for those who left AFDC for work. Subsequent legislation, enacted in 1990, further expanded child care by creating a new block grant for those without a connection to AFDC, new matching funds to subsidize child care for those "at risk" of receiving AFDC, and a major expansion of the Earned Income Tax Credit (EITC).
Additionally, an era of experimentation on "welfare-to-work" initiatives began in the 1980s. President Reagan proposed legislation in 1987 that would have authorized states to conduct demonstration projects that could have included AFDC and any other low-income assistance programs. These demonstrations would have been overseen at the federal level by an Interagency Low-Income Opportunity Board. Though the proposed legislation was not enacted, the Reagan Administration, and subsequently the Administrations of George H. W. Bush and Bill Clinton, issued waivers of AFDC requirements under another provision of law. The experimentation on "welfare-to-work" initiatives found that requiring participation in work or job preparation activities could effectively move single mothers off the benefit rolls and into jobs.
1992 to 1996: "Ending Welfare As We Know It"
The number of families receiving cash assistance had been fairly stable during the period from 1982 to 1988. However, beginning in the summer of 1989 the number of families receiving cash assistance began to increase once again.
President Clinton's Proposal
During the 1992 presidential campaign, then-candidate Bill Clinton promised to "end welfare as we know it." He stressed time-limited aid and expanded financial supports for those who did go to work. The 1993 tax bill further expanded the EITC.
President Clinton made his welfare reform proposal in June 1994. It would have phased in a two-year limit on AFDC receipt without work, followed by required participation in a wage-paying work program after two years. It would also have expanded funding for training within the first two years. It was estimated to increase child care costs for participants in the JOBS program or the wage-paying work program. The proposal would have barred AFDC to unwed minor mothers.
President Clinton's proposal was never considered by either the House or the Senate. However, during the period before the enactment of the 1996 welfare reform law, the Administration granted waivers of AFDC law to 43 states allowing them to engage in "welfare reform" demonstration projects. Some of these waivers were for small-scale demonstrations, but some were for statewide demonstrations of state-designed cash assistance and work programs.
The Contract with America
Welfare reform was one of 10 legislative initiatives that was included in the "Contract with America," developed by Republicans for the 1994 congressional campaign. The welfare proposal in the Contract with America would have required recipients to work after two years of AFDC (like the Clinton Administration proposal), but it also would have imposed a lifetime five-year limit on benefits. It would have barred AFDC to unwed minor mothers and would have imposed a "family cap," not increasing benefits for new babies born into AFDC families. Funding for AFDC and child care would have been capped, with states given the option to receive AFDC as a block grant.
A Block Grant for Temporary Assistance to Needy Families
H.R. 4 , as introduced at the start of the 104 th Congress, was the Contract with America proposal. However, immediately following the 1994 congressional election, House Republicans worked with several Republican governors to craft an alternative proposal that would block grant funding for AFDC and other social programs. The welfare reform legislation considered by House committees reflected the block grant proposals rather than the original H.R. 4 legislation. Legislation reported from the House committees was bundled into an omnibus welfare reform bill that included the end of AFDC and its replacement with TANF. That bill, the Personal Responsibility Act, substituting for the original text of H.R. 4 , passed the House on March 24, 1995.
H.R. 4 , as passed by the House, formed the basis for all later welfare reform bills considered and passed by the 104 th Congress. It would have
replaced AFDC and related programs of Emergency Assistance, and the work and training program for AFDC recipients, with a block grant to the states for Temporary Assistance for Needy Families; allotted TANF basic block grant funds to states based on recent expenditures in AFDC and related programs; allowed states to spend their TANF grants on a broad range of benefits and services; gradually phased in a requirement that 50% of the caseload be either working or engaged in activities, but limited the ability of states to count education and training toward that target; the requirement could also be met, fully or partially, through caseload reduction (i.e., the caseload reduction credit); established a five-year lifetime limit on cash assistance; prohibited unwed minor parents from receiving cash assistance; prohibited states from increasing cash benefits when a new baby was born to a family already on the rolls (the family cap); and limited need-tested benefits for noncitizens in need-tested programs, including requiring that noncitizens be in the United States for five years before being eligible for TANF.
The House-passed bill also consolidated AFDC-related child care funding with the block grant created in 1990, and it increased funding for child care. However, it ended the guarantee that those transitioning from welfare-to-work be provided child care.
The Senate Finance Committee ordered H.R. 4 reported in May 1995. The Finance Committee bill adopted a similar structure to the House bill. Different from the House bill, however, the Senate Finance Committee bill
would have continued a separate employment and training program; did not include a family cap; and did not include the prohibition on benefits to unwed minor parents.
Disputes about the committee-reported measure over items such as the distribution of funds held up consideration of the bill until August and September of 1995. Negotiations between party leaders in the Senate, Senator Robert Dole for the Republicans and Senator Thomas Daschle for the Democrats, produced an accord that also adopted the basic structure of the House bill but made some substantial modifications. The compromise bill included
a requirement that states continue to spend some of their own funds (a "maintenance of effort," or MOE requirement) in order to receive their full block grant funds; supplemental grants to states with high rates of population growth and/or low historical welfare spending per poor child; a contingency fund for states experiencing economic need; a provision to allow aid to unwed minor parents who were living in an adult supervised setting; and "charitable choice" provisions to permit increased participation of faith-based organizations in the delivery of welfare services.
The Senate passed its version of H.R. 4 on September 19, 1995.
Welfare Reform Added to the 1995 Budget Bill—First Veto of Welfare Reform
Following passage of welfare reform legislation in the Senate, both the House and Senate began the process of crafting legislation to implement the budget adopted for FY1996. On October 17, 1995, the House Budget Committee reported its budget reconciliation bill ( H.R. 2491 ), which included the end of AFDC and its replacement with TANF. It passed the House on October 26, 1995. The Senate version of the budget reconciliation bill also generally included the Senate-passed version of the TANF proposal, and it passed on October 28, 1995. Conferees came to an agreement on the budget reconciliation bill—including the welfare reform provisions—on November 17, 1995. The House- and Senate-approved conference agreement was vetoed by President Clinton on December 6, 1995. President Clinton's veto message highlighted his opposition to cuts to Medicare, Medicaid, the EITC, and child nutrition programs. The President said:
On welfare reform, I strongly support real welfare reform that strengthens families and encourages work and responsibility. But the provisions in this bill, when added to the EITC cuts, would cut low-income programs too deeply.
Final Agreement on H.R. 4 and Second Veto of Welfare Reform
With the veto of the budget reconciliation bill, attention turned toward finalizing House-Senate agreements on the stand-alone welfare reform bill ( H.R. 4 ). A final conference report on H.R. 4 was filed on December 20, 1995. The final agreement included many of the modifications to TANF that were adopted in the Senate, including
a compromise maintenance of effort requirement; supplemental grants to states with high population growth and/or low historical spending per poor child, but with limited funding; and a state option to impose a family cap.
President Clinton vetoed H.R. 4 on January 9, 1996. In vetoing the bill, the President remarked:
The final welfare reform legislation should provide sufficient child care to enable recipients to leave welfare to work; reward States for placing people in jobs; restore the guarantee of health coverage for poor families; require States to maintain their stake in moving people from welfare to work; and protect States and families in the event of economic downturn and population growth.
The President also objected to budget cuts not related to the TANF proposal, such as provisions that would have cut spending in food stamps (now the Supplemental Nutrition Assistance Program), benefits for disabled children, benefits for noncitizens, school lunches, and foster care and adoption assistance.
Legislation Action in 1996
With welfare reform twice vetoed, the National Governor's Association (NGA) in February 1996 adopted a policy position asking for additional child care funds, additional contingency funds for recessionary periods, and bonus payments for states that meet certain employment outcomes. In May 1996, House and Senate Republicans introduced bills that reflected the policies of the vetoed H.R. 4 and provided additional funding for child care, the TANF contingency fund, and performance bonuses.
H.R. 3734 , the budget reconciliation bill for that year, included these welfare reform provisions together with a proposal to revise Medicaid. H.R. 3734 passed the House on July 18, 1996. The Senate made a key modification to the bill by dropping its Medicaid provisions. The welfare reform provisions remained in H.R. 3734 , and it passed the Senate on July 23, 1996. A conference agreement on the bill was filed July 30, 1996; it passed the House on July 31, 1996, and the Senate on August 1, 1996.
President Clinton signed the legislation, known as the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA; P.L. 104-193 ), into law on August 22, 1996.
Major Differences Between AFDC and TANF
The 1996 welfare reform law repealed AFDC and some of its related programs and replaced it with the TANF block grant. Funding for the AFDC-related child care programs was consolidated into a separate funding stream dedicated to child care. Some things did not change with the 1996 law. As was the case with AFDC, TANF programs are run by states (and sometimes localities), and they determine the maximum benefits under the programs and set the income eligibility thresholds.
Table 1 summarizes some of the major differences between AFDC and TANF. It should be noted that at the time of enactment of the 1996 law many states were operating under waivers of the AFDC rules that related to cash assistance. These waivers imposed time limits, set different rules for counting earnings than did the AFDC federal rules, and set different rules for work or participation in job activities. TANF permitted states to continue programs operated under waivers, even if the provisions of the waiver were inconsistent with TANF rules. The last of these waivers expired in 2007.
Overview of Post-1996 TANF Legislation
Balanced Budget Act of 1997
The Balanced Budget Act of 1997 (BBA97, P.L. 105-33 ), enacted one year after the 1996 welfare reform law, made a number of changes to TANF. It created a program providing additional funding dedicated to financing work activities. The Welfare-to-Work Grant program (WTW) provided $3 billion for two years, FY1998 and FY1999. Under the program, funding was divided, with 75% provided to states and local workforce areas through a formula and 25% dedicated to competitive grants. The program was originally targeted at the hardest to serve population on TANF and similarly disadvantaged noncustodial parents. The WTW grant program was administered by the Department of Labor (DOL), not the Department of Health and Human Services (HHS), which administers TANF. Subsequent legislation relaxed requirements for targeting services to the hardest to serve, and as funds were spent more slowly than anticipated, the deadline for expenditures was extended.
The BBA97 made several other permanent changes to TANF, including
permitting a greater percentage of recipients to be counted as engaged in work through education and training, but retaining a limit on counting such participation; setting a statutory limit on transfers from TANF to the Social Services Block Grant at 10%; and making technical corrections to the 1996 welfare reform bill, including technical corrections to TANF.
Attempts at Reauthorization: 2002-2005
In February 2002, President George W. Bush made proposals for the reauthorization of the TANF block grant and related welfare reform proposals. The document, Working for Independence, outlined a five-year reauthorization that would have
funded the basic TANF block grant at the same level provided from FY1997 through FY2002 for an additional five years; provided mandatory child care funding through FY2007 at its FY2002 level (with no inflation or other adjustment over the period FY2003-FY2007); provided dedicated funding for grants to promote healthy marriage; raised the work participation standard to a minimum of 70% of families with a "work-eligible individual" that must be working or engaged in activities; required 40 hours per week of work or engagement in activities for full credit toward meeting the standard, but allowed for partial credit for hours less than 40 hours per week; allowed states to count rehabilitative activities for three months on the rolls, but narrowed the activities that counted after three months to work or community service or work experience; and ended the caseload reduction credit against the work standards, replacing it with a credit for recipients who left the rolls for work.
The Bush Administration proposals were incorporated (with some modifications) into bills that passed the House in 2002 and 2003: H.R. 4737 (107 th Congress) and H.R. 4 (108 th Congress). A major difference between the Bush Administration proposal and the House proposals of 2002 and 2003 was that the House proposals retained the caseload reduction credit and provided extra credit to states that had large historical caseload reductions. Following House action, the Senate Finance Committee reported substantially differing versions of each bill. The Senate Finance Committee bills did not narrow the activities that could be counted toward the work participation standard after three months, and they expanded the ability of states to count participation in rehabilitative activities toward the TANF work participation standard. The Senate Finance Committee bills would have replaced the caseload reduction credit with a credit based on employed leavers, families diverted from the rolls, and families receiving work supports. The full Senate never acted on either of the Senate Finance Committee-reported bills.
In the absence of reauthorization legislation, TANF program and funding authority was extended on a temporary basis 13 times from 2002 to 2006.
The Deficit Reduction Act of 2005
The early part of 2005 again saw committee action on legislation to reauthorize TANF. On March 9, 2005, the Senate Finance Committee ordered reported legislation that became S. 667 (109 th Congress). The following week, the House Ways and Means Committee's Subcommittee on Human Resources considered H.R. 240 and sent it to the full committee. However, further action on TANF reauthorization did not occur until the fall of 2005, when the House and Senate began considering legislation under the budget reconciliation process.
The House passed as part of their reconciliation bill (the House amendment to S. 1932 ) the TANF reauthorization bills that essentially incorporated the proposals passed by the House in 2002 and 2003 and were contained in H.R. 240 . The Senate version of the reconciliation bill contained no TANF provisions.
The conference report on the budget reconciliation bill included TANF provisions different from those that passed the House. The Deficit Reduction Act of 2005 (DRA, P.L. 109-171 ) included (1) a long-term extension of TANF funding, through the end of FY2010; (2) the elimination of performance bonuses to states; (3) the establishment of a $150 million fund for research and competitive grants on healthy marriage and responsible fatherhood, with $100 million per year for healthy marriage initiatives and $50 million per year for responsible fatherhood initiatives; and (4) changes to TANF work rules, such as counting caseload reduction only from 2005 (rather than 1995) toward the work participation standards, requiring HHS to define specific work activities that may count for each listed statutory work activity, and requiring that states verify work activities of recipients. The DRA also included an increase in mandatory child care funding from $2.717 billion per year to $2.917 billion per year.
The conference report on the DRA passed the House on December 19, 2005. Congress finished reconciling differences between the two chambers in February 2006. President Bush signed the DRA into law as P.L. 109-171 on February 8, 2006.
American Recovery and Reinvestment Act of 2009
The economy entered into a recession after December 2007, with a major financial crisis and accelerating job loss occurring in late 2008. In response, the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ) passed Congress and was signed by President Obama. ARRA included tax cuts; unemployment insurance provisions; and extra funding for programs, including provisions to provide fiscal relief to states.
ARRA also included $5 billion for a new TANF Emergency Contingency Fund (ECF) available to be spent in FY2009 and FY2010. The ECF supplemented funding for the regular TANF contingency fund, which itself was depleted in early FY2010. The ECF reimbursed states for 80% of the cost of increased expenditures for basic assistance, short-term emergency aid, and subsidized employment. ARRA also temporarily froze the TANF caseload reduction credit at prerecession levels, through its application to the FY2011 work participation standards.
TANF Legislation from 2010 to 2019
The long-term extension of TANF enacted in the DRA expired at the end of FY2010 (September 30, 2010). Since then, Congress continued TANF program authority and funding through a series of short-term extensions. TANF extensions have been incorporated into stop-gap continuing resolutions or omnibus appropriations bills to fund all or most of the government, added to tax bills, added to unrelated legislation, or passed as stand-alone legislation. (As used in this report, stand-alone legislation represents laws enacted that addressed only TANF and related programs.) There were two gaps in funding for TANF during this period. Funding lapsed during broader "government shutdowns" in October 2013 and beginning in December 2018. States were permitted to draw on unspent, previously appropriated TANF funds to finance their TANF activities during the shutdown.
While many of the short-term extensions of TANF funding did not make changes to TANF policy, three extension laws did
The Claims Resolution Act of 2010 (CRA, P.L. 111-291 ), a bill to settle claims against the federal government for certain Indian tribes, included a TANF extension through the end of FY2011. It also altered funding for the healthy marriage and responsible fatherhood programs, splitting the combined $150 million appropriation for them at $75 million for healthy marriage and $75 million for responsible fatherhood (it had previously been $100 million for healthy marriage and $50 million for responsible fatherhood). Additionally, the CRA required special one-time reports from the states on how they spend funds and on individuals with no reported hours of work participation. The CRA also provided funding for TANF supplemental grants only through June 30, 2011 (rather than September 30, 2011, the end of the fiscal year). Supplemental grants were not funded for the last quarter of FY2011, nor any fiscal year thereafter. The Middle Class Tax Relief and Job Creation Act of 2012 ( P.L. 112-96 ) extended TANF through the end of FY2012, and also permanently amended TANF law to require states to act to prevent cash assistance recipients from withdrawing their benefits at Automated Teller Machines (ATMs) at strip clubs, casinos, and liquor stores. The FY2017 Consolidated Appropriations Act ( P.L. 115-31 ) extended funding for the TANF block grant for the remainder of FY2017 and for FY2018. It also financed TANF-related research through a set-aside of 0.33% of the TANF basic block grant appropriation. This reduced the TANF basic block grant to each state by 0.33%.
In 2018, the House Ways and Means Committee reported legislation ( H.R. 5861 , 115 th Congress) that would have reauthorized and funded TANF for five years; revised TANF's work rules to measure employment outcomes rather than participation; required all assistance recipients to have an individualized plan; required that all TANF funds be spent on families with incomes at or below 200% of poverty; and required a minimum percentage of TANF funds to be spent on assistance, work activities, or short-term economic aid. The bill was not considered by the full House.
Detailed Legislative Chronology
1996
P.L. 104-193 , enacted August 22, 1996, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, established the block grant of Temporary Assistance for Needy Families. Funds for most TANF grants were appropriated through FY2002; supplemental grants and the TANF contingency fund were appropriated through FY2001. States were required to implement TANF, and accept their block grant funding, by July 1, 1997, though they could opt to implement earlier.
P.L. 104-327 , enacted October 19, 1996, amended the transition rule from the pre-TANF programs to TANF that limited total FY1997 federal funding for TANF and pre-TANF programs. It changed the limit on funding to the states for FY1997 from an amount equal to their basic block grant to an amount equal to their basic block grant plus, if they qualified, what they would have received from the TANF contingency fund.
1997
P.L. 105-33 , enacted August 5, 1997, the Balanced Budget Act of 1997, raised the cap limiting the counting of education as work from 20% to 30% of those considered engaged in work, and temporarily removed from that cap teen parents engaged in education through FY1999; set the maximum allowable TANF transfer to Title XX social services at 10% of the block grant (rather than one-third of total transfers); and made technical corrections to P.L. 104-193 . P.L. 105-33 also established the Welfare-to-Work (WTW) grant program within TANF (funded at $3 billion over two years, FY1998 and FY1999), but administered by the Department of Labor at the federal level, with local administration by state workforce investment boards and competitive grantees.
P.L. 105-89 , enacted November 19, 1997, the Adoption and Safe Families Act, reduced the contingency fund appropriation by $40 million.
1998
P.L. 105-178 , enacted June 9, 1998, the Transportation Act for the 21 st Century, permitted the use of federal TANF funds as matching funds for reverse commuter grants. It also set the statutory limit on TANF transfers to Title XX social services at 4.25% of the block grant. (Note that subsequent annual appropriation bills restored the 10% limit on TANF transfers to SSBG.)
1999
P.L. 106-113 , enacted November 29, 1999, an omnibus appropriations act, broadened eligibility for recipients to be served by the WTW grant program and added limited authority for vocational education or job training to be WTW activities.
2000
P.L. 106-554 , enacted December 21, 2000, an omnibus appropriation act, gave grantees two more years to spend WTW grant funds (for a total of five years from the date of the grant award).
2002
P.L. 107-147 , enacted March 9, 2002, the Job Creation and Worker Assistance Act, extended the TANF supplemental grants and contingency funds, both of which had expired on September 30, 2001, through FY2002. Supplemental grants were extended at FY2001 levels.
P.L. 107-229 , enacted September 30, 2002, a short-term continuing resolution, extended TANF basic grants, supplemental grants, bonus funds, and contingency funds (and other related programs) through December 20, 2002.
P.L. 107-294 , enacted November 22, 2002, a short-term continuing resolution, extended TANF and related funding through March 30, 2003.
2003
P.L. 108-7 , enacted February 20, 2003, an omnibus appropriations act, extended TANF and related funding through June 30, 2003.
P.L. 108-40 , enacted June 30, 2003, a stand-alone bill, extended TANF and related funding through September 30, 2003.
P.L. 108-89 , enacted October 1, 2003, a multipurpose bill, included an extension of TANF and related funding through March 31, 2004.
2004
P.L. 108-199 , enacted January 23, 2004, a consolidated appropriations bill, rescinded all remaining unspent WTW formula grant funds, effectively ending the WTW grant program.
P.L. 108-210 , enacted March 31, 2004, a stand-alone bill, extended TANF and related funding through June 30, 2004.
P.L. 108-262 , enacted June 30, 2004, a stand-alone bill, extended TANF and related funding through September 30, 2004.
P.L. 108-308 , enacted September 30, 2004, a stand-alone bill, extended TANF and related funding through March 31, 2005.
2005
P.L. 109-4 , enacted March 25, 2005, a stand-alone bill, extended TANF and related funding through June 30, 2005.
P.L. 109-19 , enacted July 1, 2005, a stand-alone bill, extended TANF and related funding through September 30, 2005.
P.L. 109-68 , enacted September 21, 2005, allowed states to draw upon contingency funds to assist those displaced by Hurricane Katrina, allowing directly affected states to receive funds from the loan fund, with repayment of the loan forgiven, and suspending penalties for failure to meet certain requirements for states directly affected by the hurricane. It also temporarily extended TANF grants through December 30, 2005.
P.L. 109-161 , enacted December 30, 2005, a stand-alone bill, extended TANF grants through March 30, 2006.
2006
P.L. 109-171 , enacted February 8, 2006, the Deficit Reduction Act of 2005, extended most TANF grants through FY2010 (supplemental grants were extended through the end of FY2008), eliminated TANF bonus funds, established competitive grants within TANF for healthy marriage and responsible fatherhood initiatives, revised the caseload reduction credit, and required HHS to issue regulations to define specific activities that count toward the TANF work participation standards as well as verify work and participation in activities.
2008
P.L. 110-275 , enacted July 15, 2008, the Medicare Improvements and Patients and Providers Act of 2008, included an extension of TANF supplemental grants through the end of FY2009.
2009
P.L. 111-5 , enacted February 17, 2009, the American Recovery and Reinvestment Act, established a $5 billion Emergency Contingency Fund (ECF) to reimburse states for increased costs associated with the Great Recession for FY2009 and FY2010. The fund reimbursed states, territories, and tribes for 80% of the increased costs of basic assistance, nonrecurrent short-term benefits, and subsidized employment. The law also permitted states to freeze caseload reduction credits at prerecession levels, allowed states to use TANF reserve funds for any benefit or service (it was previously restricted to assistance), and extended supplemental grants through the end of FY2010.
2010
P.L. 111-242 , enacted September 30, 2010, a short-term continuing resolution, extended TANF funding through December 3, 2010.
P.L. 111-290 , enacted December 4, 2010, a short-term continuing resolution, extended TANF funding authority through December 18, 2010.
P.L. 111-291 , enacted December 8, 2010, the Claims Resolution Act of 2010, extended basic TANF funding through the end of FY2011 (September 30, 2011) but provided supplemental grants only through June 30, 2011. It also altered funding for the healthy marriage and responsible fatherhood programs, splitting the combined $150 million appropriation for them at $75 million for healthy marriage and $75 million for responsible fatherhood. The act required some additional reporting on work activities and TANF expenditures.
2011
P.L. 112-35 , enacted September 30, 2011, the Short-Term TANF Extension Act, extended basic TANF funding for three months, through December 31, 2011. No funding was provided for TANF supplemental grants.
P.L. 112-78 , enacted December 23, 2011, the Temporary Payroll Tax Cut Continuation Act of 2011, extended basic TANF funding for two months, through February 29, 2012.
2012
P.L. 112-96 , enacted February 22, 2012, the Middle Class Tax Relief and Job Creation Act of 2012, extended basic TANF funding for the remainder of FY2012 (to September 30, 2012). It also prevented electronic benefit transaction access to TANF cash at liquor stores, casinos, and strip clubs; states would be required to prohibit access to TANF cash at ATMs at such establishments. It also required states to report TANF data in a manner that facilitates the exchange of that data with other programs' data systems.
P.L. 112-175 , enacted September 28, 2012, a continuing resolution providing funding for the first six months of FY2013, extended TANF funding through March, 2013.
2013
P.L. 112-275 , enacted January 14, 2013, the Protect Our Kids Act of 2012, appropriated $612 million to the TANF contingency fund for FY2013 and FY2014, and reserved $2 million from each of the two years' appropriations for the activities of a commission to examine child welfare fatalities.
P.L. 113-6 , enacted March 26, 2013, an omnibus appropriations bill, extended TANF funding through the remainder of FY2013.
P.L. 113-46 , enacted October 17, 2013, a short-term continuing resolution , extended TANF funding through January 15, 2014. (T h is resolution ended the government shutdown and a TANF funding gap from October 1, 2013, through October 16, 2013.)
2014
P.L. 113-73 , enacted January 15, 2014, a short-term continuing resolution, extended TANF funding through January 18, 2014.
P.L. 113-76 , enacted January 17, 2014, a consolidated appropriations act, extended TANF funding for the remainder of FY2014 (through September 30, 2014).
P.L. 113-164 , enacted September 19, 2014, a short-term continuing resolution, extended TANF funding through December 11, 2014.
P.L. 113-202 , enacted December 12, 2014, a short-term continuing resolution, extended TANF funding through December 13, 2014.
P.L. 113-203 , enacted December 13, 2014, a short-term continuing resolution, extended TANF funding through December 17, 2014.
P.L. 113-235 , enacted December 16, 2014, an omnibus appropriations act, extended TANF funding through September 30, 2015.
2015
P.L. 114-53 , enacted September 30, 2015, a short-term continuing resolution, extended TANF funding through December 11, 2015.
P.L. 114-96 , enacted December 11, 2015, a short-term continuing resolution, extended TANF funding through December 16, 2015.
P.L. 114-100 , enacted December 16, 2015, a short-term continuing resolution, extended TANF funding through December 22, 2015.
P.L. 114-113 , enacted December 18, 2015, a consolidated appropriations act, extended TANF funding for the remainder of FY2016 as part of an omnibus appropriations act.
2016
P.L. 114-223 , enacted September 29, 2016, a short-term continuing resolution, extended TANF funding through December 9, 2016.
P.L. 114-254 , enacted December 10, 2016, extended TANF funding through April 28, 2017.
2017
P.L. 115-30 , enacted April 28, 2017, extended TANF funding through May 5, 2017.
P.L. 115-31 , the Consolidated Appropriation Act, 2017, enacted May 5, 2017, extended TANF funding for the remainder of FY2017 and through the end of FY2018. It provided that 0.33% of the funding in the TANF basic block grant pay for TANF-related research activities. This reduced the basic TANF block grant for each state by that percentage (0.33%). The act also required the Department of Health and Human Services, in consultation with the Department of Labor, to develop a database named "What Works Clearinghouse of Proven and Promising Projects to Move Welfare Recipients into Work," to consist of research projects that deliver services to move TANF recipients into work.
2018
P.L. 115-245 , enacted September 28, 2018, a short-term continuing resolution, extended TANF funding through December 7, 2018.
P.L. 115-298 , enacted December 7, 2018, a short-term continuing resolution, extended TANF funding through December 21, 2018.
2019
P.L. 116-4 , the TANF Extension Act of 2019, enacted January 24, 2019, a stand-alone TANF bill, extended TANF funding through June 30, 2019. (This legislation ended a TANF funding gap that occurred after the expiration of P.L. 115-298 on December 21, 2018.)
Summary:
| 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 2019 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. From FY2002 to FY2006, TANF was funded by a series of short-term extensions. 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. The DRA also 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. Since the end of FY2010, TANF has again been funded by a series of short-term extensions. Most recently, it was extended through June 30, 2019, by the TANF Extension Act of 2019 (P.L. 116-4). | 96 | 46,284 | 46,286 | 46,286 | ... [The rest of the report is omitted]
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crs_R45546 | crs_R45546_0 | You are given a report by a government agency. Write a one-page summary of the report.
Report:
Introduction
From its headwaters in Colorado and Wyoming to its terminus in the Gulf of California, the Colorado River Basin covers more than 246,000 square miles. The river runs through seven U.S. states (Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, and California) and Mexico. Pursuant to federal law, the Bureau of Reclamation (Reclamation, part of the Department of the Interior [DOI]) plays a prominent role in the management of the basin's waters. In the Lower Basin (i.e., Arizona, Nevada, and California), Reclamation also serves as water master on behalf of the Secretary of the Interior, a role that elevates the status of the federal government in basin water management. The federal role in the management of Colorado River water is magnified by the multiple federally owned and operated water storage and conveyance facilities in the basin, which provide low-cost water and hydropower supplies to water users.
Colorado River water is used primarily for agricultural irrigation and municipal and industrial (M&I) purposes. The river's flow and stored water also are important for power production, fish and wildlife, and recreation, among other uses. A majority (70%) of basin water supplies are used to irrigate 5.5 million acres of land; basin waters also provide M&I water supplies to nearly 40 million people. Much of the area that depends on the river for water supplies is outside of the drainage area for the Colorado River Basin. Storage and conveyance facilities on the Colorado River provide trans-basin diversions that serve areas such as Cheyenne, WY; multiple cities in Colorado's Front Range (e.g., Fort Collins, Denver, Boulder, and Colorado Springs, CO); Provo, UT; Albuquerque and Santa Fe, NM; and Los Angeles, San Diego, and the Imperial Valley in Southern California ( Figure 1 ). Colorado River hydropower facilities can provide up to 42 gigawatts of electrical power per year. The river also provides habitat for a wide range of species, including several federally endangered species. It flows through 7 national wildlife refuges and 11 National Park Service (NPS) units; these and other areas of the river support important recreational opportunities.
Precipitation and runoff in the basin are highly variable. Water conditions on the river depend largely on snowmelt in the basin's northern areas. Observed data (1906-2018) show that natural flows in the Colorado River Basin in the 20 th century averaged about 14.8 million acre-feet (MAF) annually. Flows have dipped significantly during the current drought, which dates to 2000; natural flows from 2000 to 2018 averaged approximately 12.4 MAF per year . In 2018, Reclamation estimated that the 19-year period from 2000 to 2018 was the driest period in more than 100 years of record keeping. The dry conditions are consistent with prior droughts in the basin that were identified through tree ring studies; some of these droughts lasted for decades. Climate change impacts, including warmer temperatures and altered precipitation patterns, may further increase the likelihood of prolonged drought in the basin.
Pursuant to the multiple compacts, federal laws, court decisions and decrees, contracts, and regulatory guidelines governing Colorado River operations (collectively known as the Law of the River ), Congress and the federal government play a prominent role in the management of the Colorado River. Specifically, Congress funds and oversees Reclamation's management of Colorado River Basin facilities, including facility operations and programs to protect and restore endangered species. Congress has also approved and continues to actively consider Indian water rights settlements involving Colorado River waters, and development of new and expanded water storage in the basin. In addition, Congress has approved funding to mitigate drought and stretch basin water supplies and has considered new authorities for Reclamation to combat drought and enter into agreements with states and Colorado River contractors.
This report provides background on management of the Colorado River, including a discussion of trends and agreements since 2000. It also discusses the congressional role in the management of basin waters.
The Law of the River: Foundational Documents and Programs
In the latter part of the 19 th century, interested parties in the Colorado River Basin began to recognize that local interests alone could not solve the challenges associated with development of the Colorado River. Plans conceived by parties in California's Imperial Valley to divert water from the mainstream of the Colorado River were thwarted because these proposals were subject to the sovereignty of both the United States and Mexico. The river also presented engineering challenges, such as deep canyons and erratic water flows, and economic hurdles that prevented local or state groups from building the necessary storage facilities and canals to provide an adequate water supply. Because local or state groups could not resolve these "national problems," Congress considered ideas to control the Colorado River and resolve potential conflicts between the states. Thus, in an effort to resolve these conflicts and prevent litigation, Congress gave its consent for the states and Reclamation to enter into an agreement to apportion Colorado River water supplies in 1921.
The below sections discuss the resulting agreement, the Colorado River Compact, and other documents and agreements that form the basis of the Law of the River, which governs Colorado River operations.
Colorado River Compact
The Colorado River Compact of 1922, negotiated by the seven basin states and the federal government, was signed by all but one basin state (Arizona). Under the compact, the states established a framework to apportion the water supplies between the Upper Basin and the Lower Basin, with the dividing line between the two basins at Lee Ferry, AZ, near the Utah border. Each basin was apportioned 7.5 MAF annually for beneficial consumptive use, and the Lower Basin was given the right to increase its beneficial consumptive use by an additional 1 MAF annually. The agreement also required Upper Basin states to deliver to the Lower Basin a total of 75 MAF over each 10-year period, thus allowing for averaging over time to make up for low-flow years. The compact did not address inter- or intrastate allocations of water (which it left to future agreements and legislation), nor did it address water to be made available to Mexico, the river's natural terminus; this matter was addressed in subsequent international agreements. The compact was not to become binding until it had been approved by the legislatures of each of the signatory states and by Congress.
Boulder Canyon Project Act
Congress approved and modified the Colorado River Compact in the Boulder Canyon Project Act (BCPA) of 1928. The act ratified the 1922 compact, authorized the construction of a federal facility to impound water in the Lower Basin (Boulder Dam, later renamed Hoover Dam) and related facilities to deliver water in Southern California (e.g., the All-American Canal, which delivers Colorado River water to California's Imperial Valley), and apportioned the Lower Basin's 7.5 MAF per year among the three Lower Basin states. It provided 4.4 MAF per year to California, 2.8 MAF to Arizona, and 300,000 acre-feet (AF) to Nevada, with the states to divide any surplus waters among them. It also directed the Secretary of the Interior to serve as the sole contracting authority for Colorado River water use in the Lower Basin and authorized several storage projects for study in the Upper Basin.
Congress's approval of the compact in the BCPA was conditioned on a number of factors, including ratification by California and five other states (thereby allowing the compact to become effective without Arizona's concurrence), and California agreeing by act of its legislature to limit its water use to 4.4 MAF per year and not more than half of any surplus waters. California met this requirement by passing the California Limitation Act of March 4, 1929.
Arizona Ratification and Arizona v. California Decision
Arizona did not ratify the Colorado River Compact until 1944, at which time the state began to pursue a federal project to bring Colorado River water to its primary population centers in Phoenix and Tucson. California opposed the project, arguing that under the doctrine of prior appropriation, California's historical use of the river trumped Arizona's rights to the Arizona allotment. California also argued that Colorado River apportionments under the BCPA included water developed on Colorado River tributaries, whereas Arizona claimed, among other things, that these apportionments included the river's mainstream waters only.
In 1952, Arizona filed suit in the U.S. Supreme Court to settle the issue. Eleven years later, in the 1963 Arizona v. California decision, the Supreme Court ruled in favor of Arizona, finding that Congress had intended to apportion the mainstream of the Colorado River and that California and Arizona each would receive one-half of surplus flows. The same Supreme Court decision held that Section 5 of the BCPA controlled the apportionment of waters among Lower Basin States, and that the BCPA (and not the law of prior appropriation) controlled the apportionment of water among Lower Basin states. The ruling was notable for its directive to forgo traditional Reclamation deference to state law under the Reclamation Act of 1902, and formed the basis for the Secretary of the Interior's unique role as water master for the Lower Basin. The decision also held that Native American reservations on the Colorado River were entitled to priority under the BCPA. Later decrees by the Supreme Court in 1964 and 1979 supplemented the 1963 decision.
Following the Arizona v. California decision, Congress eventually authorized Arizona's conveyance project for Colorado River water, the Central Arizona Project (CAP), in the Colorado River Basin Project Act of 1968 (CRBPA). As a condition for California's support of the project, Arizona agreed that, in the event of shortage conditions, California's 4.4 MAF has priority over CAP water supplies.
1944 U.S.-Mexico Water Treaty27
In 1944, the United States signed a water treaty with Mexico (1944 U.S.-Mexico Water Treaty) to guide how the two countries share the waters of the Colorado River and the Rio Grande. The treaty established water allocations for the two countries and created a governance framework (the International Boundary and Water Commission) to resolve disputes arising from the treaty's execution. The treaty requires the United States to provide Mexico with 1.5 MAF of water annually, plus an additional 200,000 AF when a surplus is declared. During drought, the United States may reduce deliveries to Mexico in similar proportion to reductions of U.S. consumptive uses. The treaty has been supplemented by additional agreements between the United States and Mexico, known as m inutes .
Upper Basin Compact and Colorado River Storage Project Authorizations
Projects originally authorized for study in the Upper Basin under BCPA were not allowed to move forward until the Upper Basin states determined their individual water allocations, which they did under the Upper Colorado River Basin Compact of 1948. The Upper Basin Compact established Colorado (where the largest share of runoff to the river originates) as the largest entitlement holder in the Upper Basin, with rights to 51.75% of any Upper Basin flows after Colorado River Compact obligations to the Lower Basin have been met. Other states also received percentage-based allocations, including Wyoming (14%), New Mexico (11.25%), and Utah (23%). Arizona was allocated 50,000 AF in addition to its Lower Basin apportionment, in recognition of the small portion of the state in the Upper Basin. Basin allocations by state following approval of the Upper Basin Compact (i.e., the allocations that generally guide current water deliveries) are shown below in Figure 2 . The Upper Basin Compact also established the Upper Colorado River Commission, which coordinates operations and positions among Upper Basin states.
Subsequent federal legislation paved the way for development of Upper Basin allocations. The Colorado River Storage Project (CRSP) Act of 1956 authorized storage reservoirs and dams in the Upper Basin, including the Glen Canyon, Flaming Gorge, Navajo, and Curecanti Dams. The act also established the Upper Colorado River Basin Fund, which receives revenues collected in connection with the projects, to be made available for defraying the project's costs of operation, maintenance, and emergency expenditures.
In addition to the aforementioned authorization of CAP in Arizona, the 1968 CRBPA amended CRSP to authorize several additional Upper Basin projects (e.g., the Animas La Plata and Central Utah projects) as CRSP participating projects. It also directed that the Secretary of the Interior propose operational criteria for Colorado River Storage Project units (including the releases of water from Lake Powell) that prioritize (1) Treaty Obligations to Mexico, (2) the Colorado River Compact requirement for the Upper Basin to deliver 75 MAF to Lower Basin states over any 10-year period, and (3) carryover storage to meet these needs. The CRBPA also established the Upper Colorado River Basin Fund and the Lower Colorado River Basin Development Fund, both of which were authorized to utilize revenues from power generation from relevant Upper and Lower Basin facilities to fund certain expenses in the sub-basins.
Water Storage and Operations
Due to the basin's large water storage projects, basin water users are able to store as much as 60 MAF, or about four times the Colorado River's annual flows. Thus, storage and operations in the basin receive considerable attention, particularly at the basin's two largest dams and their storage reservoirs: Glen Canyon Dam/Lake Powell in the Upper Basin (26.2 MAF of storage capacity) and Hoover Dam/Lake Mead in the Lower Basin (26.1 MAF). The status of these projects is of interest to basin stakeholders and observers and is monitored closely by Reclamation.
Glen Canyon Dam, completed in 1963, provides the linchpin for Upper Basin storage and regulates flows from the Upper Basin to the Lower Basin, pursuant to the Colorado River Compact. It also generates approximately 5 billion kilowatt hours (KWh) of electricity per year, which the Western Area Power Administration (WAPA) supplies to 5.8 million customers in Upper Basin States. Other significant storage in the Upper Basin includes the initial "units" of the CRSP: the Aspinall Unit in Colorado (including Blue Mesa, Crystal, and Morrow Point dams on the Gunnison River, with combined storage capacity of more than 1 MAF), the Flaming Gorge Unit in Utah (including Flaming Gorge Dam on the Green River, with a capacity of 3.78 MAF), and the Navajo Unit in New Mexico (including Navajo Dam on the San Juan River, with a capacity of 1 MAF). The Upper Basin is also home to 16 "participating" projects which are authorized to use water for irrigation, municipal and industrial uses, and other purposes.
In the Lower Basin, Hoover Dam, completed in 1936, provides the majority of the Lower Basin's storage and generates about 4.2 billion KWh of electricity per year for customers in California, Arizona, and Nevada. Also important for Lower Basin Operations are Davis Dam/Lake Mohave, which regulates flows to Mexico under the 1944 Treaty, and Parker Dam/Lake Havasu, which impounds water for diversion into the Colorado River Aqueduct (thereby allowing for deliveries to urban areas in southern California) and CAP (allowing for diversion to users in Arizona). Further downstream on the Arizona/California border, Imperial Dam (a diversion dam) diverts Colorado River water to the All-American Canal for use in California's Imperial and Coachella Valleys.
Annual Operating Plans
Reclamation monitors Colorado River reservoir levels and projects them 24 months into the future in monthly studies (called 24-month studies ). The studies take into account forecasted hydrology, reservoir operations, and diversion and consumptive use schedules to model a single scenario of reservoir conditions. The studies inform operating decisions by Reclamation looking one to two years into the future. They express water storage conditions at Lake Mead and Lake Powell in terms of elevation, as feet above mean sea level (ft).
In addition to the 24-month studies, the CRBPA requires the Secretary to transmit to Congress and the governors of the basin states, by January 1 of each year, a report describing the actual operation for the preceding water year and the projected operation for the coming year. This report is commonly referred to as the annual operating plan (AOP). The AOP's projected January 1 water conditions for the upcoming calendar year establish a baseline for future annual operations.
Since the adoption of guidelines by Reclamation and basin states in 2007 (see below section, " 2007 Interim Guidelines "), operations of the Hoover and Glen Canyon Dams have been tied to specific pool elevations at Lake Mead and Lake Powell. For Lake Mead, the first level of shortage (1 st Tier Shortage Condition), under which Arizona and Nevada's allocations would be decreased, would be triggered if Lake Mead falls below 1,075 ft. For Lake Powell, releases under tiered operations are based on storage levels in both Lake Powell and Lake Mead (specific delivery curtailments based on lake levels similar to Lake Mead have not been adopted).
As of January 2019, Reclamation predicted that Lake Mead's 2019 elevation would remain above 1,075 ft (approximately 9.6 MAF of storage) and that Lake Powell would remain at its prior year level (i.e., the Upper Elevation Balancing Tier) during 2019. However, Reclamation also projected that there was a 69% chance of a 1 st Tier Shortage Condition at Lake Mead beginning in January 2020. Reclamation predicted a small (3%) chance of Lake Powell dropping to 3,490 feet, or minimum power pool (i.e., a level beyond which hydropower could not be generated) by 2020; the chance of this occurring by 2022 was greater (15%). Improved hydrology for 2019 may decrease the likelihood of shortage in the immediate future.
Mitigating the Environmental Effects of Colorado River Basin Development
Construction of most of the Colorado River's water supply infrastructure predated major federal environmental protection statutes, such as the National Environmental Policy Act (NEPA; 42 U.S.C. §§4321 et seq. ) and the Endangered Species Act (ESA; 87 Stat. 884, 16 U.S.C. §§1531-1544). Thus, many of the environmental impacts associated with the development of basin resources were not originally taken into account. Over time, multiple efforts have been initiated to mitigate these effects. Some of the highest-profile efforts have been associated with water quality (in particular, salinity control) and the effects of facility operations on endangered species.
Salinity Control
Salinity and water quality are long-standing issues in the Colorado River Basin. Parts of the Upper Basin are covered by salt-bearing shale (which increases salt content in water inflows), and salinity content increases as the river flows downstream due to both natural leaching and return flows from agricultural irrigation. The 1944 U.S.-Mexico Water Treaty did not set water quality or salinity standards in the Colorado River Basin. However, after years of dispute between the United States and Mexico regarding the salinity of the water reaching Mexico's border, the two countries reached an agreement on August 30, 1973, with the signing of Minute 242 of the International Boundary and Water Commission. The agreement guarantees Mexico that the average salinity of its treaty deliveries will be no more than 115 parts per million higher than the salt content of the water diverted to the All-American Canal at Imperial Dam in Southern California. To control the salinity of Colorado River water in accordance with this agreement, Congress passed the Colorado River Basin Salinity Control Act of 1974 ( P.L. 93-320 ), which authorized desalting and salinity control facilities to improve Colorado River water quality. The most prominent of these facilities is the Yuma Desalting Plant, which was largely completed in 1992 but has never operated at capacity. In 1974, the seven basin states also established water quality standards for salinity through the Colorado River Basin Salinity Control Forum.
Endangered Species Efforts and Habitat Improvements
Congress enacted the ESA in 1973. As basin species became listed in accordance with the act, federal agencies and nonfederal stakeholders consulted with the U.S. Fish and Wildlife Service (FWS) to address the conservation of the listed species. As a result of these consultations, several major programs have been developed to protect and restore fish species on the Colorado River and its tributaries. Summaries of some of the key programs are below.
Upper Colorado Endangered Fish Recovery Program
The Upper Colorado Endangered Fish Recovery Program was established in 1988 to assist in the recovery of four species of endangered fish in the Upper Colorado River Basin. Congress authorized this program in P.L. 106-392 . The program is implemented through several stakeholders under a cooperative agreement signed by the governors of Colorado, Utah, and Wyoming; DOI; and the Administrator of WAPA. The recovery goals of the program are to reduce threats to species and improve their status so they are eventually delisted from the ESA. Some of the actions taken in the past include providing adequate instream flows for fish and their habitat, restoring habitat, reducing nonnative fish, augmenting fish populations with stocked fish, and conducting research and monitoring. Reclamation is the lead federal agency for the program and provides the majority of federal funds for implementation. It is also funded through a portion of Upper Basin hydropower revenues from WAPA; FWS; the states of Colorado, Wyoming, and Utah; and water users, among others.
San Juan River Basin Recovery Implementation Program
The San Juan River Basin Recovery Implementation Program was established in 1992 to assist in the recovery of ESA-listed fish species on the San Juan River, the Colorado's largest tributary. The program is concerned with the recovery of the Razorback sucker ( Xyrauchen texanus ) and Colorado pikeminnow ( Ptychocheilus Lucius ). Congress authorized this program in P.L. 106-392 with the aim to protect the genetic integrity and population of listed species, conserve and restore habitat (including water quality), reduce nonnative species, and monitor species. The Recovery Program is coordinated by FWS. Reclamation is responsible for operating the Animas-La Plata Project and Navajo Dam on the San Juan River in a way that reduces effects on the fish populations. The program is funded by a portion of revenues from power generation, Reclamation, participating states, and the Bureau of Indian Affairs. Recovery efforts for listed fish are coordinated with the Upper Colorado River Program discussed above.
Glen Canyon Dam Adaptive Management Program
The Glen Canyon Dam Adaptive Management Program was established in 1997 in response to a directive from Congress under the Grand Canyon Protection Act of 1992 ( P.L. 102-575 ) to operate Glen Canyon Dam "in such a manner as to protect, mitigate adverse impacts to, and improve the values for which Grand Canyon National Park and Glen Canyon National Recreation Area were established." This program uses experiments to determine how water flows affect natural resources south of the dam. Reclamation is in charge of modifying flows for experiments, and the U.S. Geological Survey conducts monitoring and other studies to evaluate the effects of the flows. The results are expected to better inform managers how to provide water deliveries and conserve species. The majority of program funding comes from hydropower revenues generated at Glen Canyon Dam.
Lower Colorado Multi-Species Conservation Program (MSCP)
The MSCP is a multistakeholder initiative to conserve 27 species (8 listed under ESA) along the Lower Colorado River while maintaining water and power supplies for farmers, tribes, industries, and urban residents. The MSCP began in 2005 and is planned to last for at least 50 years. The MSCP was created through consultation under ESA. To achieve compliance under ESA, federal entities involved in managing water supplies in the Lower Colorado River met with resource agencies from Arizona, California, and Nevada; Native American Tribes; environmental groups; and recreation interests to develop a program to conserve species along a portion of the Colorado River. A biological opinion (BiOp) issued by the FWS in 1997 served as a basis for the program. Modifications to the 1997 BiOp were made in 2002, and in 2005, the BiOp was renewed for 50 years. Nonfederal entities received an incidental take permit under Section 10(a) of the ESA for their activities in 2005 and shortly thereafter implemented a habitat conservation plan.
The objective of the MSCP is to create habitat for listed species, augment the populations of species listed under ESA, maintain current and future water diversions and power production, and abide by the incidental take authorizations for listed species under the ESA. The estimated total cost of the program over its lifetime is approximately $626 million in 2003 dollars ($882 million in 2018 dollars) and is to be split evenly between Reclamation (50%) and the states of California, Nevada, and Arizona (who collectively fund the remaining 50%). The management and implementation of the MSCP is the responsibility of Reclamation, in consultation with a steering committee of stakeholders.
Tribal Water Rights
Twenty-two federally recognized tribes in the Colorado River Basin have quantified water diversion rights that have been confirmed by court decree or final settlement. These tribes collectively possess rights to 2.9 MAF per year of Colorado River water. However, as of 2015, these tribes typically were using just over half of their quantified rights. Additionally, 13 other basin tribes have reserved water rights claims that have yet to be resolved. Increased water use by tribes with existing water rights, and/or future settlement of claims and additional consumptive use of basin waters by other tribes, is likely to exacerbate the competition for basin water resources.
The potential for increased use of tribal water rights (which, once ratified, are counted toward state-specific allocations where the tribal reservation is located) has been studied in recent years. In 2014, Reclamation, working with a group of 10 tribes with significant reserved water rights claims on the Colorado River, initiated a study known as the 10 Tribes Study . The study, published in 2018, estimated that, cumulatively, the 10 tribes could have reserved water rights (including unresolved claims) to divert nearly 2.8 MAF per year. Of these water rights, approximately 2 MAF per year were decreed and an additional 785,273 AF (mostly in the Upper Basin) remained unresolved. The report estimated that, overall, the 10 tribes are diverting (i.e., making use of) almost 1.5 MAF of their 2.8 MAF in resolved and unresolved claims. Table 1 shows these figures at the basin and sub-basin levels. According to the study, the majority of unresolved claims in the Upper Basin are associated with the Ute Tribe in Utah (370,370 AF per year), the Navajo Nation in Utah (314,926 AF), and the Navajo Nation in the Upper Basin in Arizona (77,049 AF).
Drought and the Supply/Demand Imbalance in the Colorado River Basin
When the Colorado River Compact was originally approved, it was assumed based on the historical record that average annual flows on the river were 16.4 MAF per year. According to Reclamation data, from 1906 to 2018, observed natural flows on the river at Lee Ferry, AZ—the common point of measurement for observed basin flows—averaged 14.8 MAF annually. Natural flows from 2000 to 2018 (i.e., during the ongoing drought) averaged considerably less than that—12.4 MAF annually. While natural flows have trended down, consumptive use in the basin has grown and has regularly exceeded natural flows since 2000. From 1971 to 2015, average total consumptive use grew from 13 MAF to over 15 MAF annually. Combined, the two trends have caused a significant drawdown of basin storage levels ( Figure 3 ).
From 2009 to 2015, the largest consumptive water use occurred in the Lower Basin (7.5 MAF per year), while Upper Basin consumptive use averaged about 3.8 MAF annually. Use of Treaty water by Mexico (1.5 MAF per year) and evaporative loss from reservoirs (approximately 2 MAF per year) in both basins also factored significantly into total basin consumptive use. Notably, consumptive use in the Lower Basin, combined with mandatory releases to Mexico, regularly exceeds the mandatory 8.23 MAF per year that must be released from the Upper Basin to the Lower Basin and Mexico pursuant to Reclamation requirements. This imbalance between Lower Basin inflows and use, known as the structural deficit , causes additional stress on basin storage.
The current drought in the basin has included some of the lowest flows on record. According to Reclamation, the 19-year period from 2000 to 2018 was the driest period in more than 100 years of record keeping. Observers have pointed out that flows in some recent years have been lower than would be expected given the amount of precipitation that has occurred, and have noted that warmer temperatures appear to be a significant contributor to these diminished flows. Based on these and other observations, some have argued that Colorado River flows are unlikely to return to 20 th century averages, and that future water supply risk is high.
2012 Reclamation Study
A 2012 study by Reclamation projected a long-term imbalance in supply and demand in the Colorado River Basin. In the study, Reclamation noted that the basin had thus far avoided serious impacts on water supplies due to the significant storage within the system, coupled with the fact that some Upper Basin states have yet to fully develop the use of their allocations. However, Reclamation projected that in the coming half century, flows would decrease by an average of 9% at Lee Ferry and drought would increase in frequency and duration. At the same time, Reclamation projected that demand for basin water supplies would increase, with annual consumptive use projected to rise from 15 MAF to 18.1-20.4 MAF by 2050, depending on population growth. A range of 64%-76% of the growth in demand was expected to come from increased M&I demand.
Reclamation's 2012 study also posited several potential ways to alleviate future shortages in the basin, such as alternative water supplies, demand management, drought action plans, water banking, and water transfer/markets. Some of these options already are being pursued. In particular, some states have become increasingly active in banking unused Colorado River surface water supplies, including through groundwater banks or storage of unused surface waters in Lake Mead (see below section, " 2007 Interim Guidelines ").
Developments and Agreements Since 2000
Drought conditions throughout the basin have raised concerns about potential negative impacts on water supplies. Concerns center on uncertainty that might result if the Secretary of the Interior were to determine that a shortage condition exists in the Lower Basin, and that related curtailments were warranted. Some in Upper Basin States are also concerned about the potential for a c ompact call of Lower Basin states on Upper Basin states. Drought and other uncertainties related to water rights priorities (e.g., potential tribal water rights claims) spurred the development of several efforts that generally attempted to relieve pressure on basin water supplies, stabilize storage levels, and provide assurances of available water supplies. Some of the most prominent developments since the year 2000 (i.e., the beginning of the current drought) are discussed below.
2003 Quantitative Settlement Agreement
Prior to the 2003 QSA, California had been using approximately 5.2 MAF of Colorado River on average each year (with most of its excess water use attributed to urban areas). Under the QSA, an agreement between several California water districts and DOI, California agreed to reduce its use to the required 4.4 MAF under the Law of the River. It sought to accomplish this aim by quantifying Colorado River entitlement levels of several water contractors; authorizing efforts to conserve additional water supplies (e.g., the lining of the All-American Canal); and providing for several large-scale, long-term agriculture-to-urban water transfers. The QSA also committed the state to a path for restoration and mitigation related to the Salton Sea, a water body in Southern California that was historically sustained by Colorado River irrigation runoff from the Imperial and Coachella Valleys.
A related agreement between Reclamation and the Lower Basin states, the Inadvertent Overrun and Payback Policy (IOPP), went into effect concurrently with the QSA in 2004. IOPP is an administrative mechanism that provides an accounting of inadvertent overruns in consumptive use compared to the annual entitlements of water users in the Lower Basin. These overruns must be "paid back" in the calendar year following the overruns, and the paybacks must be made only from "extraordinary conservation measures" above and beyond normal consumptive use.
2004 Arizona Water Settlements Act
The 2004 Arizona Water Settlements Act ( P.L. 108-451 , AWSA) significantly altered the allocation of CAP water in Arizona and set the stage for some of the cutbacks in the state that are currently under discussion. It ratified three water rights settlements (one in each title) between the federal government and the State of Arizona, the Gila River Indian Community (GRIC), and the Tohono O'odham Nation, respectively. For the state and its CAP water users, the settlement resolved a final repayment cost for CAP by reducing the water users' reimbursable repayment obligation from about $2.3 billion to $1.65 billion. Additionally, Arizona agreed to new tribal and non-tribal allocations of CAP water so that approximately half of CAP's annual allotment would be available to Indian tribes in Arizona, at a higher priority than most other uses. The tribal communities were authorized to lease the water so long as the water remains within the state via the state's water banking authority. The act also authorized funds to cover the cost of infrastructure required to deliver the water to the Indian communities, much of it derived from power receipts accruing to the Lower Colorado River Basin Development Fund.
2007 Interim Guidelines/Coordinated Operations for Lake Powell and Lake Mead
Another significant development in the basin was the 2007 adoption of the Colorado River Interim Guidelines for Lower Basin Shortages and the Coordinated Operations for Lake Powell and Lake Mead (2007 Interim Guidelines). Development of the agreement began in 2005, when, in response to drought in the Southwest and the decline in basin water storage (and a record low point in Lake Powell of 33% active capacity), the Secretary of the Interior instructed Reclamation to develop coordinated strategies for Colorado River reservoir operations during drought or shortages. The resulting guidelines included criteria for releases from Lakes Mead and Powell determined by "trigger levels" in both reservoirs, as well as a schedule of Lower Basin curtailments at different operational tiers ( Table 2 ). Under the guidelines, Arizona and Nevada, which have junior rights to California, would face reduced allocations if Lake Mead elevations dropped below 1,075 ft. At the time, it was thought that the 2007 Guidelines would significantly reduce the risk of Lake Mead falling to 1,025 feet. The guidelines are considered "interim" because they were scheduled to expire in 20 years (i.e., at the end of 2026).
The 2007 agreement also included for the first time a mechanism by which parties in the Lower Basin were able to store conserved water in Lake Mead, known as Intentionally Created Surplus (ICS). Reclamation accounts for this water annually, and the users storing the water may access the surplus in future years, in accordance with the Law of the River. From 2013 to 2017, the portion of Lake Mead water in storage that was classified as ICS ranged from a low of 711,864 AF in 2015 to a high of 1.261 MAF in 2017 ( Figure 4 ).
Pilot System Conservation Program
In 2014, Reclamation and several major basin water supply agencies (Central Arizona Water Conservation District, Southern Nevada Water Authority, Metropolitan Water District of Southern California, and Denver Water) executed a memorandum of understanding to provide funding for voluntary conservation projects and reductions of water use. These activities had the goal of developing new system water , to be applied toward storage in Lake Mead, by the end of 2019. Congress formally authorized federal participation in these efforts in the Energy and Water Development and Related Agencies Appropriations Act, 2015 ( P.L. 113-235 , Division D ), with an initial sunset date for the authority at the end of FY2018. The Energy and Water Development and Related Agencies Appropriations Act, 2019 ( P.L. 115-244 , Division A ) extended the authority through the end of FY2022, with the stipulation that Upper Basin agreements could not proceed without the participation of the Upper Basin states through the Upper Colorado River Commission. As of mid-2018, Reclamation estimated that the program had resulted in a total of 194,000 AF of system water conserved. These savings were carried out through 64 projects conserving 47,000 AF in the Upper Basin and 11 projects conserving 147,000 AF in the Lower Basin.
Minute 319 and Minute 323 Agreements with Mexico87
In 2017, the United States and Mexico signed Minute 323, which extended and replaced elements of a previous agreement, Minute 319, signed in 2012. Minute 323 included, among other things, options for Mexico to hold water in reserve in U.S. reservoirs for emergencies and water conservation efforts, as well as U.S. commitments for flows to support the ecological health of the Colorado River Delta. It also extended initial Mexican cutback commitments made under Minute 319 (which were similar in structure to the 2007 cutbacks negotiated for Lower Basin states) and established a Binational Water Scarcity Contingency Plan that included additional cutbacks that would be triggered if drought contingency plans (DCPs) are approved by U.S. basin states (see following section, " 2019 Drought Contingency Plans ").
2019 Drought Contingency Plans
Ongoing drought conditions and the potential for water supply shortages prompted discussions and negotiations focused on how to conserve additional basin water supplies. After several years of negotiations, on March 19, 2019, Reclamation and the Colorado River Basin states finalized DCPs for both the Upper Basin and the Lower Basin. These plans required final authorization by Congress to be implemented. Following House and Senate hearings on the DCPs in early April, on April 16, 2019, Congress authorized the DCP agreements in the Colorado River Drought Contingency Plan Authorization Act ( P.L. 116-14 ). Each of the basin-level DCPs is discussed below in more detail.
Upper Basin Drought Contingency Plan
The Upper Basin DCP aims to protect against Lake Powell reaching critically low elevations; it also authorizes storage of conserved water in the Upper Basin that could help establish the foundation for a water use reduction effort (i.e., a "Demand Management Program") that may be developed in the future. Under the Upper Basin DCP, the Upper Basin states agree to operate system units to keep the surface of Lake Powell above 3,525 ft, which is 35 ft above the minimum elevation needed to run the dam's hydroelectric plant. Other large Upper Basin reservoirs (e.g., Navajo Reservoir, Blue Mesa Reservoir, and Flaming Gorge Reservoir) would be operated to protect the targeted Lake Powell elevation, potentially through drawdown of their own storage. If established by the states, an Upper Basin DCP Demand Management Program would likely entail willing seller/buyer agreements allowing for temporary paid reductions in water use that would provide for more storage volume in Lake Powell.
Reclamation and other observers have stated their belief that these efforts will significantly decrease the risk of Lake Powell's elevation falling below 3,490 ft, an elevation at which significantly reduced hydropower generation is possible.
Lower Basin Drought Contingency Plan
The Lower Basin DCP is designed to require Arizona, California, and Nevada to curtail use and thereby contribute additional water to Lake Mead storage at predetermined "trigger" elevations, while also creating additional flexibility to incentivize voluntary conservation of water to be stored in Lake Mead, thereby increasing lake levels. Under the DCP, Nevada and Arizona (which were already set to have their supplies curtailed beginning at 1,075 ft under the 2007 Interim Guidelines) are to contribute additional supplies to maintain higher lake levels (i.e., beyond previous commitments). The reductions of supply would reach their maximums when reservoir levels drop below 1,045 ft. At the same time, the Lower Basin DCP would, for the first time, include commitments for delivery cutbacks by California. These cutbacks would begin with 200,000 AF (4.5%) in reductions at Lake Mead elevations of 1,040-1,045 ft, and would increase to as much as 350,000 AF (7.9%) at elevations of 1,025 ft or lower.
The curtailments in the Lower Basin DCP are in addition to those agreed to under the 2007 Interim Guidelines and under Minute 323 with Mexico. Specific and cumulative reductions are shown in Table 2 . In addition to the state-level reductions, under the Lower Basin DCP, Reclamation also would agree to pursue efforts to add 100,000 AF or more of system water within the basin. Some of the largest and most controversial reductions under the Lower Basin DCP would occur in Arizona, where pursuant to previous changes under the 2004 AWSA, a large group of agricultural users would face major cutbacks to their CAP water supplies.
Reclamation has noted that the Lower Basin DCP significantly decreases the chance of Lake Mead elevations falling below 1,020 ft, which would be a critically low level. Some parties have pointed out that although the DCP is unlikely to prevent a shortage from being declared at 1,075 ft, it would slow the rate at which the lake recedes thereafter. Combined with the commitments from Mexico, total planned cutbacks under shortage scenarios (i.e., all commitments to date, combined) would reduce Lower Basin consumptive use by 241,000 AF to 1.375 MAF per year, depending on Lake Mead's elevation.
Drought Contingency Plan Opposition
Although the DCPs and the related negotiations were widely praised, some expressed concerns related to the implementation of the DCPs as they relate to federal and state environmental laws. Most Colorado River contractors supported the agreements, but one major basin contractor, Imperial Irrigation District (IID, a major holder of Colorado River water rights in Southern California), did not approve the DCPs. IID has argued that the DCPs will further degrade the Salton Sea, a shrinking and ecologically degraded water body in southern California that relies on drainage flows from lands irrigated using Colorado River water. Following enactment of the DCPs, IID filed suit in state court alleging that state approval of the DCPs violated the California Environmental Quality Act. Others have questioned whether federal implementation of the DCPs without a new or supplemental Environmental Impact Statement might violate federal law, such as NEPA.
Issues for Congress
Funding and Oversight of Existing Facilities and Programs
The principal role of Congress as it relates to storage facilities on the Colorado River is funding and oversight of facility operations, construction, and programs to protect and restore endangered species (e.g., Glen Canyon Dam Adaptive Management Program and the Upper Colorado River Endangered Fish Program). In the Upper Basin, Colorado River facilities include the 17 active participating units in the Colorado River Storage Projects, as well as the Navajo-Gallup Water Supply Project. In the Lower Basin, major facilities include the Salt River Project and Theodore Roosevelt Dam, Hoover Dam and All-American Canal, Yuma and Gila Projects, Parker-Davis Project, Central Arizona Project, and Robert B. Griffith Project (now Southern Nevada Water System).
Congressional appropriations in support of Colorado River projects and programs typically account for a portion of overall project budgets. For example, the Lower Colorado Region's FY2017 operating budget was $517 million; $119.8 million of this total was provided by discretionary appropriations, and the remainder of funding came from power revenues (which are made available without further appropriation) and nonfederal partners. In recent years, Congress has also authorized and appropriated funding that has targeted the Colorado River Basin in general (i.e., the Pilot System Conservation Plan). Congress may choose to extend or amend these and other authorities specific to the basin.
While discretionary appropriations for the Colorado River are of regular interest to Congress, Congress may also be asked to weigh in on Colorado River funding that is not subject to regular appropriations. For instance, in the coming years, the Lower Colorado River Basin Development Fund is projected to face a decrease in revenues and may thus have less funding available for congressionally established funding priorities for the Development Fund.
Indian Water Rights Settlements and Plans for New and Augmented Water Storage
Congress has previously approved Indian water rights settlements associated with more than 2 MAF of tribal diversion rights on the Colorado River. Only a portion of this water has been developed. Congress likely will face the decision of whether to fund development of previously authorized infrastructure associated with Indian water rights settlements in the Colorado River Basin. For example, the ongoing Navajo-Gallup Water Supply Project is being built to serve the Jicarilla Apache Nation, the Navajo Nation, and the City of Gallup, New Mexico. Congress may also be asked to consider new settlements that may result in tribal rights to more Colorado River water. For example, in the 116 th Congress, H.R. 244 would authorize the Navajo Nation Water Settlement in Utah.
In addition to development of new tribal water supplies, some states in the Upper Basin have indicated their intent to further develop their Colorado River water entitlements. For example, in the 115 th Congress, Section 4310 of America's Water Infrastructure Act ( P.L. 115-270 ) authorized the Secretary of the Interior to enter into an agreement with the State of Wyoming whereby the state would fund a project to add erosion control to Fontenelle Reservoir in the Upper Basin. The project would allow the state to potentially utilize an additional 80,000 acre-feet of water storage on the Green River, a tributary of the Colorado River.
Drought Contingency Plan Implementation
Congress may remain interested in implementation of the DCPs, including their success or failure at stemming further Colorado River cutbacks and the extent to which the plans comply with federal environmental laws such as NEPA. Similarly, Congress may be interested in the overall hydrologic status of the Colorado River Basin, as well as future efforts to plan for increased demand in the basin and stretch limited basin water supplies.
Summary:
| The Colorado River Basin covers more than 246,000 square miles in seven U.S. states (Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, and California) and Mexico. Pursuant to federal law, the Bureau of Reclamation (part of the Department of the Interior) manages much of the basin's water supplies. Colorado River water is used primarily for agricultural irrigation and municipal and industrial (M&I) uses, but it also is important for power production, fish and wildlife, and recreational uses.
In recent years, consumptive uses of Colorado River water have exceeded natural flows. This causes an imbalance in the basin's available supplies and competing demands. A drought in the basin dating to 2000 has raised the prospect of water delivery curtailments and decreased hydropower production, among other things. In the future, observers expect that increasing demand for supplies, coupled with the effects of climate change, will further increase the strain on the basin's limited water supplies.
River Management
The Law of the River is the commonly used shorthand for the multiple laws, court decisions, and other documents governing Colorado River operations. The foundational document of the Law of the River is the Colorado River Compact of 1922. Pursuant to the compact, the basin states established a framework to apportion the water supplies between the Upper and Lower Basins of the Colorado River, with the dividing line between the two basins at Lee Ferry, AZ (near the Utah border). The Upper and Lower Basins each were allocated 7.5 million acre-feet (MAF) annually under the Colorado River Compact; an additional 1.5 MAF in annual flows was made available to Mexico under a 1944 treaty. Future agreements and court decisions addressed numerous other issues (including intrastate allocations of flows), and subsequent federal legislation provided authority and funding for federal facilities that allowed users to develop their allocations. A Supreme Court ruling also confirmed that Congress designated the Secretary of the Interior as the water master for the Lower Basin, a role in which the federal government manages the delivery of all water below Hoover Dam.
Reclamation and basin stakeholders closely track the status of two large reservoirs—Lake Powell in the Upper Basin and Lake Mead in the Lower Basin—as an indicator of basin storage conditions. Under recent guidelines, dam releases from these facilities are tied to specific water storage levels. For Lake Mead, the first tier of "shortage," under which Arizona's and Nevada's allocations would be decreased, would be triggered if Lake Mead's January 1 elevation is expected to fall below 1,075 feet above mean sea level. As of early 2019, Reclamation projected that there was a 69% chance of a shortage condition at Lake Mead in 2020; there was also a lesser chance of Lake Powell reaching critically low levels. Improved hydrology in early 2019 may decrease the chances of shortage in the immediate future.
Drought Contingency Plans
Despite previous efforts to alleviate future shortages, the basin's hydrological outlook has generally worsened in recent years. After several years of negotiations, in early 2019 Reclamation and the basin states transmitted to Congress additional plans to alleviate stress on basin water supplies. These plans, known as the drought contingency plans (DCPs) for the Upper and Lower Basins, were authorized by Congress in April 2019 in the Colorado River Drought Contingency Plan Authorization Act (P.L. 116-14). The DCPs among other things obligate Lower Basin states to additional water supply cutbacks at specified storage levels (i.e., cutbacks beyond previous curtailment plans), commit Reclamation to additional water conservation efforts, and coordinate Upper Basin operations to protect Lake Powell storage levels and hydropower generation.
Congressional Role
Congress plays a multifaceted role in federal management of the Colorado River basin. Congress funds and oversees management of basin facilities, including operations and programs to protect and restore endangered species. It has also enacted and continues to consider Indian water rights settlements involving Colorado River waters and development of new water storage facilities in the basin. In addition, Congress has approved funding to mitigate water shortages and conserve basin water supplies and has enacted new authorities to combat drought and its effects on basin water users (i.e., the DCPs and other related efforts). | 96 | 48,580 | 48,582 | 48,582 | ... [The rest of the report is omitted]
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