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Sunday, January 31, 2010

U.S. Immigration Policy on Haitian Migrants

Ruth Ellen Wasem
Specialist in Immigration Policy

The environmental, social, and political conditions in Haiti have long prompted congressional interest in U.S. policy on Haitian migrants, particularly those attempting to reach the United States by boat. While some observers assert that such arrivals by Haitians are a breach in border security, others maintain that these Haitians are asylum seekers following a decades old practice of Haitians coming by boat without legal immigration documents. Migrant interdiction and mandatory detention are key components of U.S. policy toward Haitian migrants, but human rights advocates express concern that Haitians are not afforded the same treatment as other asylum seekers. 

The devastation caused by the January 12, 2010, earthquake in Haiti has led Department of Homeland Security (DHS) Secretary Janet Napolitano to grant Temporary Protected Status (TPS) to Haitians in the United States at the time of the earthquake. The scale of current humanitarian crisis—estimated thousands of Haitians dead and reported total collapse of the infrastructure in the capital city of Port au Prince—resulted in this TPS announcement on January 15, 2010. More broadly, there are concerns that the crisis conditions in Haiti may result in mass migration from the island. Agencies within DHS that are the leads in handling a potential mass migration include the U.S. Coast Guard (interdiction); Customs and Border Protection (apprehensions and inspections); Immigration and Customs Enforcement (detention and removal); and the U.S. 

Citizenship and Immigration Services (credible fear determinations). The balancing of DHS's border security and immigration control responsibilities in the midst of a humanitarian disaster poses a challenge.


Date of Report: January 20, 2010
Number of Pages: 13
Order Number: RS21349
Price: $29.95

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Gangs in Central America

Clare Ribando Seelke
Specialist in Latin American Affairs


During its second session, the 111th Congress is likely to maintain an interest in the effects of crime and gang violence in Central America, and on the expanding activities of transnational gangs with ties to that region operating in the United States. The violent Mara Salvatrucha (MS- 13) and its main rival, the "18th Street" gang (also known as M-18) continue to threaten citizen security and challenge government authority in Central America. Gang-related violence has been particularly acute in Honduras, El Salvador, and Guatemala, which have among the highest homicide rates in the world. Governments in those countries appear to have moved away, at least on a rhetorical level, from repressive anti-gang strategies. However, they have yet to implement effective anti-gang policies that include an emphasis on prevention and rehabilitation of former gang members. 

U.S. officials have expressed concerns about the expanding presence of the MS-13 and M-18 in cities across the United States, as well as reports that these gangs may be evolving into more sophisticated transnational criminal enterprises. Between February 2005 and September 2009, U.S. officials arrested some 2,572 alleged MS-13 members in cities across the United States, many of whom were subsequently deported. Evidence suggests, however, that previously deported members of both the MS-13 and the M-18 often reenter the United States illegally across the U.S.-Mexico border. 

Several U.S. agencies have been actively engaged on both the law enforcement and preventive side of dealing with Central American gangs. An inter-agency committee worked together to develop a U.S. Strategy to Combat Criminal Gangs from Central America and Mexico, first announced at a July 2007 U.S.-Central American Integration System (SICA) summit on security issues. The strategy, which is now being implemented, states that the U.S. government will pursue coordinated anti-gang activities through five broad areas: diplomacy, repatriation, law enforcement, capacity enhancement, and prevention. 

In recent years, Congress has increased funding to support anti-gang efforts in Central America. Congress appropriated roughly $7.9 million in FY2008 and $5 million in FY2009 in global International Narcotics Control and Law Enforcement (INCLE) funds for anti-gang efforts in Central America. Congress provided additional support for anti-gang efforts in the region through the Mérida Initiative, including, by CRS calculation, at least $22 million in FY2008 supplemental assistance and close to $19 million in FY2009 funding. On December 13, 2009, Congress passed the FY2010 Consolidated Appropriations Act (H.R. 3288/P.L. 111-117), which provides $83 million for combating gangs and drug trafficking in Central America under a new Central America Regional Security Initiative (CARSI). P.L. 111-117 also includes $8 million in global INCLE for gang programs in the region. 

This report describes the gang problem in Central America, discusses country and regional approaches to deal with the gangs, and analyzes U.S. policy with respect to gangs in Central America. For more information on the Mérida Initiative, see CRS Report R40135, Mérida Initiative for Mexico and Central America: Funding and Policy Issues. For information on Central American gangs in the United States, see CRS Report RL34233, The MS-13 and 18th Street Gangs: Emerging Transnational Gang Threats?, by Celinda Franco. 


Date of Report: January 11, 2010
Number of Pages: 22
Order Number: RL34112
Price: $29.95

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El Salvador: Political, Economic, and Social Conditions and U.S. Relations


Clare Ribando Seelke
Specialist in Latin American Affairs


Throughout the last few decades, the United States has maintained a strong interest in El Salvador, a small Central American country with a population of 7.2 million. During the 1980s, El Salvador was the largest recipient of U.S. aid in Latin America as its government struggled against the Farabundo Marti National Liberation Front (FMLN) insurgency during a 12-year civil war. A peace accord negotiated in 1992 brought the war to an end and formally assimilated the FMLN into the political process as a political party. After the peace accords were signed, U.S. involvement shifted towards helping the government rebuild democracy and implement marketfriendly economic reforms.

Mauricio Funes of the FMLN was inaugurated to a five-year presidential term in June 2009. Funes won a close election in March 2009, marking the first FMLN presidential victory and the first transfer in political power between parties since the end of El Salvador's civil war. Funes' victory followed strong showings by the FMLN in the January 2009 municipal and legislative elections, in which the party won a plurality of the seats in National Assembly and the largest share of the municipal vote.

Seven months into his term, President Funes has extremely high approval ratings, but faces a number of political, economic, and social challenges. The National Assembly is fragmented, which means that Funes has to form coalitions with other parties in order to advance his legislative agenda. The U.S. recession has negatively impacted El Salvador's economy, increasing the country's already widespread poverty. The country's economic situation worsened considerably after Tropical Storm Ida hit in early November 2009. The storm caused 190 deaths, left 14,000 people homeless, and wrought millions of dollars in agricultural and infrastructural damage. In addition to these political and economic challenges, El Salvador's violent crime rates remain among the highest in the world and will need to be addressed.

Maintaining close ties with the United States has been a primary foreign policy goal of successive National Republican Alliance (ARENA) governments, and will likely be a key focus for the Funes government as well. The Saca Administration (2004-2009) cooperated in U.S. and regional counter-narcotics operations, supported the U.S. coalition forces in Iraq, and implemented the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). Although some Members of Congress expressed reservations about working with an FMLN administration, relations between El Salvador and the United States will likely remain friendly. President Funes has pledged to remain in CAFTA-DR and expressed his willingness to work with the United States on a variety of issues. Following his election, the Obama Administration congratulated President Funes for his victory and pledged to work with him to build on the already strong ties between the United States and El Salvador.

For more information, see CRS Report R40135, Mérida Initiative for Mexico and Central America: Funding and Policy Issues, by Clare Ribando Seelke and CRS Report RL34112, Gangs in Central America, by Clare Ribando Seelke. 
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Date of Report: January 21, 2010
Number of Pages: 12
Order Number: RS21655
Price: $29.95

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U.S. Trade Policy and the Caribbean: From Trade Preferences to Free Trade Agreements

J. F. Hornbeck
Specialist in International Trade and Finance

For over 40 years, the United States has relied on unilateral trade preferences to promote exportled development in poor countries. Congressionally authorized trade preferences give market access to selected developing country goods, duty free or at tariffs below normal rates, without requiring reciprocal trade concessions, although their extension is conditioned on extensive eligibility criteria and the use of U.S. inputs in many cases. The Caribbean Basin has benefitted from multiple preferential trade arrangements, the first being the Caribbean Basin Initiative (CBI), passed by Congress in the Caribbean Basin Economic Recovery Act of 1983. Other programs include the Caribbean Basin Trade Partnership Act (CBTPA) of 2000, which provides tariff preferences for imports of apparel products, and the Haiti HOPE Act of 2006 (amended in 2008), which gives even more generous preferences to imports of Haitian apparel. 

Since the preferences have been implemented, U.S.-Caribbean trade has grown, but evaluations of the early programs suggest that their effects were not as robust as originally hoped. Benefits tended to be concentrated in a few countries and products, limiting export promotion and deterring product diversification. Over time, benefits have been "eroded" by multilateral trade liberalization and other regional U.S. preference programs. Bilateral free trade agreements, particularly the CAFTA-DR, have actually replaced unilateral preferences with permanent, more attractive tariff reductions and trade rules for former CBI countries such as the Dominican Republic and Central American countries. As the main exporters of apparel in the Caribbean Basin, they were among the primary beneficiaries of the Caribbean trade preference programs. 

In recent years, Congress has decided on only short-term extensions of the Caribbean and other preference programs. A number of Members seek a comprehensive review of these programs with an eye on harmonizing and revamping their various provisions. Congressional concern over eligibility criteria, simplifying rules of origin, targeting the least developed countries, and standardizing benefits are among a number of broad issues being debated as part of the preference reform agenda. In the 111th Congress, the discussion of extending the Caribbean programs may be part of a broader reauthorization effort for all preference arrangements. In addition, there are a number of issues and circumstances converging that may suggest the need for reorienting U.S. trade policy in the Caribbean region. The most effective trade preferences are the apparel provisions provided under the CBTPA, which expire on December 31, 2010. But, they are sparsely used by the smaller Eastern Caribbean countries, now the main beneficiaries in the region after CAFTA-DR was implemented, because they have largely services-based economies. Also, there is a reluctance by these countries to make the transition to an FTA without some guarantee of a "development component" to the agreement. These concerns persist, despite the promise of permanent market access and increased investment that an FTA holds out. The Caribbean countries, long involved in dependent economic relationships, appear content to take a cautious path toward any new trade arrangement with the United States. 

For U.S. trade policy, any thoughts of achieving broader regional integration are challenged by these circumstances. Broader integration may be difficult to reconcile with the needs of very small developing countries, which are highly vulnerable to the vicissitudes of global economic trends and may require new and creative solutions, particularly if U.S. policy is still driven by the historical focus on development and regional security issues in addition to trade liberalization. In the context of continuing with trade preferences in similar or altered form, or opting for an FTA, the solution is not immediately obvious. 


Date of Report: January 14, 2010
Number of Pages: 26
Order Number: RL33951
Price: $29.95

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Temporary Protected Status: Current Immigration Policy and Issues

Ruth Ellen Wasem
Specialist in Immigration Policy

Karma Ester
Information Research Specialist


When civil unrest, violence, or natural disasters erupt in spots around the world, concerns arise over the safety of foreign nationals from these troubled places who are in the United States. Provisions exist in the Immigration and Nationality Act (INA) to offer temporary protected status (TPS) or relief from removal under specified circumstances. A foreign national who is granted TPS receives a registration document and an employment authorization for the duration of TPS. The United States currently provides TPS or deferred enforced departure (DED) to over 300,000 foreign nationals from a total of seven countries: El Salvador, Haiti, Honduras, Liberia, Nicaragua, Somalia, and Sudan. Liberians have had relief from removal for the longest period, first receiving TPS in March 1991 following the outbreak of civil war. 

The devastation caused by the January 12, 2010, earthquake in Haiti prompted calls for the Administration of President Barrack Obama to grant TPS to Haitians in the United States at the time of the earthquake. The scale of current humanitarian crisis—estimated thousands of Haitians dead and reported total collapse of the infrastructure in the capital city of Port au Prince—led the Department of Homeland Security (DHS) to announce on January 13, 2010, that it is temporarily halting the deportation of Haitians. On January 15, 2010, DHS Secretary Janet Napolitano granted TPS to Haitians in the United States at the time of the earthquake. 

Under the INA, the executive branch grants TPS or relief from removal. Congress, however, has also provided TPS legislatively. Legislation pertaining to TPS has been introduced in the 111th Congress. 


Date of Report: January 19, 2010
Number of Pages: 10
Order Number: RS20844
Price: $29.95

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Argentina’s Defaulted Sovereign Debt: Dealing with the “Holdouts”

J. F. Hornbeck
Specialist in International Trade and Finance

In December 2001, following an extended period of economic and political instability, Argentina suffered a severe financial crisis, leading to the largest default on sovereign debt in history. It was widely recognized that Argentina faced an untenable debt situation that was in need of restructuring. In 2005, after prolonged, contentious, and unsuccessful attempts to find a mutually acceptable solution with its creditors, Argentina abandoned the negotiation process and made a one-time unilateral offer on terms highly unfavorable to the creditors. Although 76% of them accepted the offer, a diverse group of "holdouts" opted instead for litigation in hopes of achieving a better settlement in the future. Although Argentina succeeded in reducing much of its sovereign debt, its unorthodox methods have left it ostracized from international credit markets for nearly a decade and triggered legislative action and sanctions in the United States. 

Argentina still owes private creditors $20 billion in defaulted debt and $10 billion in past-due interest, as well as $6.2 billion to Paris Club countries. Of the disputed privately held debt, U.S. investors hold approximately $3.0 billion. Some of the more vocal investor groups have lobbied Congress to pressure Argentina to reopen debt negotiations. Some Members of Congress have introduced punitive legislation in both the 110th and 111th Congress, but to date it has not received any legislative action. Nearly five years after the original debt workout, however, a confluence of circumstances has persuaded Argentina to restructure the holdout debt, particularly the need to secure long-term public financing. 

On December 16, 2009, Argentina filed a registration statement and prospectus to issue $15 billion in bonds, the proceeds of which will be used to finance an exchange of defaulted debt. The terms of exchange were not included and are not expected until late January 2010. Some analyses speculate that the structure of the new exchange will be similar to the one offered in 2005, which would entail a discount of 65% from the face value of the bonds, with past due interest capitalized and financed separately. Given that Argentine law prohibits the new exchange from offering better terms than the 2005 offer, and that bondholders who participated in that exchange benefitted from additional payments based on Argentina's strong economic growth, it appears likely that the new offer will be the less favorable of the two. 

For Argentina, a successful restructuring requires a sufficiently large participation rate for the courts to set aside existing judgments and attachment orders. This action would allow Argentina renewed access to the international credit markets. Historically, sovereign debt workouts with at least a 90% participation rate have achieved this goal. Since holdouts compose 24% of the original bondholders, a 60% participation rate of this group would allow for the total participation rate to reach the 90% threshold. If the exchange succeeds, Argentina will have completed a debt restructuring with the deepest write-off of principal in history. The original bondholders were severely hurt by this deal, but so was Argentina by the crisis. It appears that nothing can be done for the original investors who have traded their bonds. If there is a legacy to the Argentine case, it may be in the changes to bond contracts that seek to improve outcomes for creditors. One option is collective action clauses (CACs) in bonds, which require all creditors to bargain collectively, with a compulsory majority decision applicable to all bondholders. This provision may allow for more coordinated creditor responses, which could increase their bargaining leverage, allow for more equitable treatment of all bondholders, and lead to a far quicker resolution to any future sovereign default. 


Date of Report: January 21, 2010
Number of Pages: 15
Order Number: R41029
Price: $29.95

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Charitable Contributions for Haiti’s Earthquake Victims

Molly F. Sherlock
Analyst in Economics

On January 12, 2010, a magnitude 7.0 earthquake struck Haiti. As of January 20, 2010, 72,000 had been confirmed dead with hundreds of thousands more in need of assistance. The earthquake has left an estimated 1.5 million Haitians homeless. Congress has passed legislation with the goal of promoting charitable donations for the earthquake victims in Haiti. Similar action was taken following the 2004 Indian Ocean tsunami and the 2005 Gulf Coast Hurricanes, when Congress enacted legislation to promote charitable giving to organizations providing aid to victims of these natural disasters. 

On January 20, 2010, the House passed the Haiti Assistance Income Tax Incentive Act (HAITI Act; H.R. 4462), a bill to accelerate the income tax benefits for charitable cash contributions for the relief of earthquake victims. The Senate introduced companion legislation (S. 2936) on January 20, 2010, but passed the identical House legislation H.R. 4462 on January 21, 2010. If enacted, the HAITI Act would allow taxpayers making charitable contributions of cash made to organizations providing aid to earthquake victims after January 11, 2010, and before March 1, 2010, to take the associated charitable deduction on their 2009 income tax returns. A similar provision, discussed in greater detail below, was adopted under P.L. 109-1 following the 2004 Indian Ocean tsunami. The Joint Committee on Taxation (JCT) estimates that the HAITI Act would result in revenue losses of approximately $2 million over the 10-year budget window spanning FY2010 through FY2019. 

Under current law, charitable contributions to 501(c)(3) charitable organizations from individuals, corporations, and estates and trusts are tax deductible in the year they are made. Individuals can deduct up to 50% of their adjusted gross income (AGI), phased-out for higher income individuals. Corporations can deduct up to 10% of their taxable income. Individuals and corporations can carry forward any unclaimed charitable deductions for up to five years. Total charitable giving in 2008 was $307.65 billion. 

In the past, Congress has passed legislation to encourage charitable giving following natural disasters. Following the 2004 Indian Ocean tsunami, legislation was passed that allowed taxpayers making charitable contributions to aid tsunami victims in January 2005 to take the charitable deduction on their 2004 tax return. This provision is similar to the one proposed in the HAITI Act. In September 2005, following Hurricane Katrina, individual and corporate giving limits were suspended. The rules surrounding charitable contributions of food inventory and books were also relaxed to encourage in-kind giving. 

The HAITI Act, like other tax policies, can be evaluated along the dimensions of efficiency and equity. Efficiency is greatest when the policy's marginal impact, the giving induced by the program, is large relative to the policy's inframarginal impact, the benefits given to those whose behavior was not directly caused by the tax policy. Using this framework, the HAITI Act is unlikely to be economically efficient. In general, tax benefits for charitable giving do not appear to significantly increase donations. Furthermore, tax deductions violate principles of vertical equity in that the benefits of tax deductions accrue disproportionately to higher income groups and provide larger benefits to those with a greater ability to pay.


Date of Report: January 22, 2010
Number of Pages: 13
Order Number: R41036
Price: $29.95

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