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Thursday, May 17, 2012

FEMA’s Community Disaster Loan Program: History, Analysis, and Issues for Congress

Jared T. Brown
Analyst in Emergency Management and Homeland Security Policy

The core purpose of the Community Disaster Loan (CDL) program is to provide financial assistance to local governments that are having difficulty providing government services because of a loss in tax or other revenue following a disaster. The program assists local governments by offering federal loans to compensate for this temporary or permanent loss in local revenue. The CDL program is managed by the Federal Emergency Management Agency (FEMA). First authorized in the Disaster Relief Act of 1974 (P.L. 93-288), the Community Disaster Loan program is currently codified in Section 417 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. §5184, as amended). The program is funded through the Disaster Assistance Direct Loan Program account, rather than the Disaster Relief Fund (DRF) that funds the majority of other Stafford Act programs. In sum, 249 loans were issued to 200 local governments under 26 different disaster declarations from 1974 to 2010. An approximate total of $1,615 million in principal was offered to these governments in loans, of which roughly $1,326 million was borrowed by the governments. Through the program, FEMA may also cancel the repayment of the loans if certain financial conditions prevailed after the three fiscal years following the disaster. Through its cancellation authority, FEMA has forgiven approximately $879 million of the $1,326 million in principal advanced to local governments since program inception.

This report compares and analyzes three different categories of loans issued in different time periods in the program’s history: “traditional” loans issued between 1974-2005, in 2007, and between 2009-2011 (TCDLs); “special” (SCDLs) loans issued in 2005-2006 following Hurricanes Katrina and Rita; and loans issued under unique provisions in 2008 (2008 CDLs). As authorized by Congress and administered by FEMA, the SCDL and 2008 loan categories had different provisions than traditional loans to guide the eligibility of local governments and dollar size of the loans. SCDLs also had unique provisions that slightly altered the purpose of the loans, lowered the interest rate charged on the loans, and clarified the cancellation procedures for the loans.

In the original legislation authorizing and appropriating the SCDLs, the loans were not allowed to be cancelled. However, Congress later amended the law to allow cancellation for SCDLs. Some controversy has arisen over FEMA’s administration of the cancellation authority for these special loans. Table 8 and Table 9 provide several measures for comparing the cancellation rates of TCDLs to SCDLs. In summary, TCDLs had a lower percentage of loans fully cancelled or with some level of cancellation than SCDLs (32.7 % and 45.5% versus 44.2% and 59.7%, respectively). On average, TCDLs also had lower dollar amounts of principal forgiven per loan than SCDLs (37.8% versus 52.4%). However, as a function of total dollar amount of principal cancelled in each loan category, TCDLs had a much higher cancellation rate than SCDLs (97.2% versus 67.3%).

Congress may consider changes to the CDL program in the future. Options could include altering future authorization and appropriations for the program in favor of more tailored disaster assistance programs, or converting the loan assistance into a grant program. There are also options for amending the program less significantly, including changing the way loan funds may be used by local governments, changing the total dollar size of the loans, and altering how the cancellation authority can be applied by FEMA.

Date of Report: May 10, 2012
Number of Pages: 47
Order Number: R42527
Price: $29.95

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Federal Labor Relations Statutes: An Overview

Alexandra Hegji
Presidential Management Fellow

Since 1926, Congress has enacted three major laws that govern labor-management relations for private sector and federal employees. An issue for Congress is the effect of these laws on employers, workers, and the nation’s economy. The Bureau of Labor Statistics estimates that, nationwide, 9.2 million employees are represented by unions. In the 112th Congress alone, more than 30 bills have been introduced to amend federal labor relations statutes. The proposals range from making union recognition without a secret ballot election illegal to further modifying runoff election procedures. This legislative activity, and the significant number of employees affected by federal labor relations laws, illustrate the current relevance of labor relations issues to legislators and their constituents.

The three major labor relations statutes in the United States are the Railway Labor Act, the National Labor Relations Act, and the Federal Service Labor-Management Relations Statute. Each law governs a distinct population of the U.S. workforce.

The Railway Labor Act (RLA) was enacted in 1926, and its coverage extends to railway and airline carriers, unions, and employees of the carriers. The RLA guarantees employees the right to organize and collectively bargain with their employers over conditions of work and protects them against unfair employer and union practices. It lays out specific procedures for selecting employee representatives and provides a dispute resolution system that aims to efficiently resolve labor disputes between parties, with an emphasis on mediation and arbitration. The RLA provides multiple processes for dispute resolution, depending on whether the dispute is based on a collective bargaining issue or the application of an existing collective bargaining agreement.

The National Labor Relations Act (NLRA) was enacted in 1933. The NLRA’s coverage extends to most other private sector businesses that are not covered by the RLA. Like the RLA, the NLRA guarantees employees the right to organize and collectively bargain over conditions of employment and protects them against unfair employer and union activities. However, its dispute resolution system differs from the RLA’s in that it is arguably more adversarial in nature; many disputes are resolved through adjudication, rather than through mediation and arbitration.

The Federal Service Labor-Management Relations Statute (FSLMRS) was enacted in 1978, and its coverage extends to most federal employees. The basic framework of the FSLMRS is similar to that of the NLRA; however, employee rights are more restricted under the FSLMRS, given the unique nature of their employer, the federal government. Federal employees have the right to organize and collectively bargain, but they cannot bargain over wages or strike. Additionally, the President has the power to unilaterally exclude an agency or subdivision from coverage under the FSLMRS if he determines that its primary work concerns national security.

This report provides a brief history and overview of the aims of each of these statutes. It also discusses key statutory provisions for each statute.

Date of Report: May 11, 2012
Number of Pages: 51
Order Number: R42526
Price: $29.95

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Social Services Block Grant: Background and Funding

Karen E. Lynch
Specialist in Social Policy

The Social Services Block Grant (SSBG) is a flexible source of funds that states use to support a wide variety of social services activities. States have broad discretion over the use of these funds. In FY2009, the most recent year for which expenditure data are available, the largest expenditures for services under the SSBG were for child care, foster care, and special services for the disabled.

The FY2012 Consolidated Appropriations Act (H.R. 2055, P.L. 112-74) provided $1.7 billion for the SSBG in FY2012, the same level of funding as had been requested in the FY2012 President’s Budget. This is also the same level of annually appropriated funding that the SSBG has received in every year since FY2002. Since FY2001, annual appropriations for the SSBG have included a provision stipulating that states may transfer up to 10% of their Temporary Assistance for Needy Families (TANF) block grants to the SSBG. In addition to funding from annual appropriations, the SSBG received supplemental appropriations in FY2006 and FY2009 for necessary expenses resulting from natural disasters.

In February 2012, the Obama Administration released its FY2013 budget, which proposed to maintain annual SSBG funding at $1.7 billion in FY2013. By contrast, the committee report (H.Rept. 112-421) accompanying the House-passed concurrent resolution on the FY2013 budget (H.Con.Res. 112) has recommended eliminating the SSBG in FY2013. In its critique of the SSBG, the committee report calls the SSBG a “duplicative” funding stream with “no evidence” of effectiveness. Critics of the proposal to eliminate the SSBG, such as the National Conference of State Legislatures, have argued that the block grant’s flexibility allows states to address the needs of vulnerable populations and respond to local concerns.

On April 18, 2012, the House Committee on Ways and Means marked up legislation to comply with a reconciliation directive included in Section 201 of the House-passed budget resolution for FY2013 (H.Con.Res. 112). The legislation includes a proposal, which was passed (22-14) by the committee, to repeal the SSBG. The legislation was transmitted to the House Committee on the Budget for inclusion in a larger reconciliation bill. On May 7, 2012, the House Committee on the Budget voted (21-9) to approve the Sequester Replacement Reconciliation Act of 2012, which is the reconciliation package that includes the proposal to repeal the SSBG.

Under current law, the SSBG is permanently authorized in Title XX of the Social Security Act (SSA). The 111th Congress amended Title XX of the SSA in the health care reform legislation signed into law by President Obama on March 23, 2010, the Patient Protection and Affordable Care Act (PPACA; P.L. 111-148). This law inserted a new subtitle on elder justice into Title XX, which was itself re-titled as Block Grants to States for Social Services and Elder Justice. The health reform law also amended Title XX by establishing two demonstration projects to address the workforce needs of health care professionals and a new competitive grant program to support the early detection of medical conditions related to environmental health hazards. The purpose of this report is to provide background and funding information about the SSBG; the report does not provide detailed information on other programs authorized within Title XX of the SSA.

Date of Report: May 8, 2012
Number of Pages: 28
Order Number: 94-953
Price: $29.95

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