Congressional Testimony
Here's a look at documents involving congressional testimony and member statements
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Senate Budget Committee Ranking Member Merkley Issues Opening Statement at Hearing on Social Security
WASHINGTON, April 4 -- Sen. Jeff Merkley, D-Oregon, ranking member of the Senate Budget Committee, released the following opening statement from a March 25, 2026, hearing entitled "Social Security: A Discussion on the Facts and the Path Forward":* * *
Mr. Chairman:
Thank you for holding today's hearing.
In 1935, President Roosevelt told the nation in a Fireside Chat: "Provisions for social security are protections for the future."
Today, about half of elderly households rely on Social Security for at least half of their income.
And 20 percent of Americans over age 50 have no retirement savings ... Show Full Article WASHINGTON, April 4 -- Sen. Jeff Merkley, D-Oregon, ranking member of the Senate Budget Committee, released the following opening statement from a March 25, 2026, hearing entitled "Social Security: A Discussion on the Facts and the Path Forward": * * * Mr. Chairman: Thank you for holding today's hearing. In 1935, President Roosevelt told the nation in a Fireside Chat: "Provisions for social security are protections for the future." Today, about half of elderly households rely on Social Security for at least half of their income. And 20 percent of Americans over age 50 have no retirement savingsat all. Meaning that Social Security is these seniors' only protection from a life of poverty.
But provisions for Social Security's future are in jeopardy.
According to independent estimates by the Social Security Administration and the Congressional Budget Office, the Social Security retirement trust fund will be insolvent by 2032. That's just six years from now - or a single Senate term.
If that happens, benefits will be slashed between 23 and 28 percent.
Every month, approximately 68 million Americans open their mailbox or bank account to get their Social Security benefits. That includes 940,000 Oregonians, nearly 200,000 of whom would live in poverty without Social Security.
If Social Security benefits are cut, those folks can't afford to lose the equivalent of 25 cents off every dollar. These are seniors who paid into Social Security their entire careers and deserve the full benefits they earned.
But the two laws governing Social Security payments are in direct tension with one another.
One law says that Social Security must pay full benefits to enrollees.
But the other law says that Social Security can only pay benefits with the funds it has.
So, either Social Security will have to cut benefits, in violation of the law, or Social Security will have to borrow additional funds, in violation of the law, which is a problem with two unworkable outcomes that is entirely avoidable.
There are many ideas for how to strengthen Social Security solvency.
Two of our Senate colleagues will share their ideas today, in addition to testimony from several experts.
The American people have ideas and priorities, too.
Every year, I hold a town hall in each of Oregon's 36 counties. I've held 20 town halls so far this year where I've asked Oregonians to fill out a survey about how they would make Social Security solvent.
The results have been clear and consistent across red, purple, and blue counties, from big cities to rural communities.
When asked how to save Social Security, a top response is raising the cap on Social Security contributions.
Folks think it's unfair that a local firefighter and a billionaire hedge fund manager have the exact same contribution cap of $184,500 because they know the firefighter will pay a much bigger slice of their family's income than the hedge fund manager ever will.
In 1983, when Congress passed Social Security reforms, 90 percent of Americans' collective earnings were subject to Social Security payroll taxes.
That was projected to keep the trust fund solvent for 75 years - into the 2050s.
Over the last four decades, though, wealth inequality has exploded but the contribution caps mean that that payments into the trust fund haven't kept up with the highest earners' income growth.
So, the trust fund will run out of money more than 20 years sooner than was projected in 1983.
Raising the contribution cap is a clear, simple, bipartisan fix that voters support.
Another top response from folks at my town halls is making investment income subject to Social Security tax.
For the wealthiest Americans - hedge fund owners and billionaire investors - most of their income often comes from investments that currently aren't subject to the Social Security tax.
Folks agree that they should pay the same proportion of their income into Social Security as every other worker.
That's another clear, simple, commonsense fix that voters support.
President Trump has a powerful role to play in saving Social Security.
Just a few weeks ago, he said in his State of the Union address that he, quote: "will always protect Social Security."
The President is supposed to release his budget for Fiscal Year 2027 soon.
In his budget, the President should lay out his plan to protect Social Security from the looming 23 percent cut in benefits that's just six years away.
That looming cut in benefits was accelerated by his Big, Ugly Betrayal Law, which took nearly $170 billion out of the Social Security trust fund that otherwise would have paid seniors their benefits.
That's according to the Social Security actuary, who is joining us today.
President Trump has a responsibility to put forward a proposal that will fix this for seniors. He also has a responsibility to make sure seniors can access the benefits they've earned.
But President Trump's reckless DOGE cuts have created all kinds of barriers for seniors trying to access their Social Security benefits.
Each of us here have members of our teams who work full time helping our constituents with federal programs and services.
My Constituent Services team reports that when Oregonians call the Social Security Administration's 800-number, they have to wait one to six hours to get help.
Wait times at field offices can stretch between two and four hours. And that's with an appointment that had to be scheduled two to three months ahead of time. And applications to get benefits that should be processed in 30 days are taking up to 90 days or longer.
All because DOGE fired thousands of Social Security Administration employees.
This is unacceptable - and the President needs to put forward a plan to fix it.
Finally, I want to note that our current deficits are at 6 percent of GDP, which is higher than the nation has ever had outside of a recession or major war.
We could close a full quarter of that deficit by making Social Security solvent!
President Roosevelt said that: "Provisions for social security are protections for the future." Congress needs to grapple right now with how we will provide for Social Security to protect that future.
I look forward to today's discussion.
Thank you, Mr. Chairman.
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Original text here: https://www.budget.senate.gov/download/032526-opening-statement-of-ranking-member-merkley_-social-security
Niskanen Center Director Reed Testifies Before Senate Energy & Natural Resources Committee
WASHINGTON, April 4 -- The Senate Energy and Natural Resources Committee issued the following testimony by Liza Reed, director of climate and energy policy at Niskanen Center, from a March 25, 2026, hearing entitled "State of the Bulk Power System":* * *
Chair Lee, Ranking Member Heinrich, and distinguished members of the Committee, thank you for inviting me to testify on the critical issue of the state of the bulk power system. My name is Liza Reed, and I am the Director for Climate and Energy Policy at the Niskanen Center, a nonpartisan think tank founded in 2015. The Niskanen Center has, ... Show Full Article WASHINGTON, April 4 -- The Senate Energy and Natural Resources Committee issued the following testimony by Liza Reed, director of climate and energy policy at Niskanen Center, from a March 25, 2026, hearing entitled "State of the Bulk Power System": * * * Chair Lee, Ranking Member Heinrich, and distinguished members of the Committee, thank you for inviting me to testify on the critical issue of the state of the bulk power system. My name is Liza Reed, and I am the Director for Climate and Energy Policy at the Niskanen Center, a nonpartisan think tank founded in 2015. The Niskanen Center has,for 10 years, operated on a central philosophy that market-based policy tools are essential to ensuring a reliable and affordable domestic energy supply.
The topic of today's hearing is one I have worked on for the last decade, starting with my dissertation research at Carnegie Mellon University, where I evaluated technical, economic, and regulatory barriers to adopting more high-voltage direct current transmission technology into our system. As Director of Climate and Energy Policy, I lead a team that researches and educates on the policies needed to build a dominant energy system. Such a system will need to integrate a diverse set of generation resources with a strong transmission backbone to move power across the country, keeping prices low for consumers and enabling growth across industries.
Where does transmission fit into our energy system?
My testimony today will focus on the role of electricity transmission, the wires of the bulk power system. The high-voltage lines of the bulk power system serve two primary roles: one is to move power from where it is generated to the cities and counties where it is consumed. It is the distribution system that then brings it all the way down to the house or retail level. The second role that transmission serves is to move power between regions to ensure reliability, strengthen our resilience to changing weather patterns, and ensure affordable energy is available across the country.
Expanding our bulk power system with more high-capacity interregional transmission is an essential part of any solution for growth, affordability, and American competitiveness. Energy consumption is strongly correlated with GDP growth, and increased access to electricity improves everything from productivity to health outcomes. The electricity grid is a strategic asset. The National Academies identified it as the greatest engineering achievement of the 20th century.1 We cannot squander that in the 21st century by pitting it against other power solutions when, in fact, transmission supports all forms of generation, and all power solutions are necessary for the next stage of growth.
We need more energy and transmission to move that energy.
An important reason to upgrade transmission is its nexus with interconnection. Planning reforms, automation, and islanding certain types of loads can all help, but the quality of the grid infrastructure determines what we can ask of the system. Recognizing this relationship, FERC just approved a merger of the interconnection and transmission planning processes in the Southwest Power Pool, which Commissioner David Rosner called "one of the most innovative, common-sense proposals presented to [FERC] since the inception of open access transmission service."2
Interconnecting generation depends on a transmission system that can move the power around the region. PJM approved a process in 2025 to ensure dispatchable projects had their interconnection agreements in hand quickly, allowing them to move ahead of other projects that were in the queue. But the projects that came out of PJM's expedited process still needed billions of dollars of grid upgrades, with one upgrade projected to take up to 7 years to complete.3
The same concerns apply to load. A shortage of grid capacity is the primary barrier to the costeffective and swift deployment of AI in this country. The data center infrastructure can go anywhere it can get power-it does not have to be here in the U.S. In fact, it won't be if we cannot update our regulatory systems to build the bulk power lines we need for a dominant grid.
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1 W.A. Wulf, The Bridge, National Academy of Engineering, https://www.nae.edu/File.aspx?id=7327&v=e3a8f2e0, at 6
2 D. Rosner, Commissioner Rosner's Concurrence in Southwest Power Pool, Inc., Federal Energy Regulatory Commission, https://www.ferc.gov/news-events/news/commissioner-rosners-concurrence-southwest-powerpool-inc
3 Comment and Motion to Intervene of Josh Shapiro, Governor of the Commonwealth of Pennsylvania to FERC, ER26-1556-000, 20260320-5293, (March 20, 2026). https://elibrary.ferc.gov/eLibrary/filedownload?fileid=197E92AD-F253-CDB1-9132-9D0CB1000000. At footnote 15.
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This committee heard sobering stats from Rob Gramilch of Grid Strategies last year: "In the 2020s, China has completed more than 8,200 miles of ultra-high voltage lines while the U.S. has built only 375 miles. European utilities are rapidly increasing the transfer capacity between countries to move power back and forth."4 Competitors are preparing for the future, and we will get left behind if we do not do the same.
To meet the projected load growth, Niskanen estimates that by 2030, the total capacity of peakcapable energy sources in development will reach about 118 gigawatts (GW).5 This includes approximately 37 GW from gas and nuclear, 26 GW from wind and solar during peak times, and 55 GW from storage and hybrid resources. Because each of these resources has different availability patterns, fuel constraints, and failure modes, scaling any single source alone would leave the system exposed to correlated outages or performance shortfalls during extreme conditions.
Grid planners evaluate these risks using real-world stress events. Winter Storm Fern offers a concrete example of that complementarity. During the storm, all major resource types experienced some level of stress or underperformance in at least one region.6 At the same time, each resource made important contributions to keeping the system operating: gas, coal, nuclear, renewables, and storage all supplied significant power when it was most needed. In most areas, wind exceeded expectations, helping reduce peak demand for other resources, while in others, thermal generation provided steady output. Not one resource is sufficient on its own. Reliability depends on how these resources work together. Transmission enables the system to draw on complementary strengths across regions.
Relying too heavily on any single fuel source creates both reliability and economic risks, since each fuel source faces its own weather-related operational concerns and supply problems. As shown in Figure 1, data from the U.S. Energy Information Administration reveal that 22 of the 48 contiguous states rely on a single energy source for 50 percent or more of their electricity mix in 2025, often leading to mismatches between energy supply and demand.7 High-capacity, interregional transmission would allow these states to diversify their portfolios. Transmission is one of the best tools we have for managing that risk by connecting regions with different generation mixes and weather patterns, drawing from a broader, more diverse supply base.
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4 R. Gramlich, Challenges to Meeting Electricity Demand, testimony before the Senate Committee on Energy and Natural Resources, July 23, 2025, https://www.energy.senate.gov/services/files/AF68ACFA-8FD9-4611-A93676F4418E0C7C, at 4.
5 K. Sercy and L. Reed, The arithmetic of availability: Prospects for American grid dominance in 2030, https://www.niskanencenter.org/the-arithmetic-of-availability-prospects-for-american-grid-dominance-in-2030/
6 R. Levine and M. Goggin, Winter Storm Fern's impact on the price of power, and what to do about it, https://www.niskanencenter.org/winter-storm-ferns-impact-on-the-price-of-power-and-what-to-do-about-it/.
7 Adapted from R. Allen and R. Levine, Unlocking HVDC: How Congress Can Enable a More Resilient Grid, https://www.niskanencenter.org/how-congress-can-enable-a-more-resilient-grid/, Niskanen Center, 2025, at 4. Data from U.S. Energy Information Administration (EIA), Electric Power Operational Data, https://www.eia.gov/opendata/browser/electricity/electric-power-operational-data?frequency=annual&data=generation;&start=2025&end=2025&sortColumn=period;&sortDirection=desc;.
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Figure 1: For 22 states, over 50% of power generated is from a single fuel source
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We need to connect electric regions.
At the highest level, we have three distinct grids, between which there is very little power transfer. These are the Eastern Interconnection, the Western Interconnection, and the Electric Reliability Council of Texas (ERCOT). Within the eastern and western interconnection, there is further distinction into planning regions and then individual utility footprints. These planning regions are important because they are the areas where groups of utilities have come together and agreed to co-plan their transmission systems and coordinate their operations. These were established to support reliability, but have also helped improve energy affordability by sharing power within the region. The Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SPP) have each undertaken region-wide transmission planning that provided double or more the benefits to consumers in reduced costs compared to the cost of the projects.
Recent weather events illustrate that there's still a lot of money left on the table, particularly between regions, and that cost is borne directly by consumers who have to pay more for energy. During winter storm Fern, locational marginal pricing (LMP) for power changed significantly by day and region as the storm moved across the country, as shown in Figure 2.
Transmission connecting these regions would have reduced these differences, saving consumers money.
Severe weather tends to be geographically concentrated and shift over time. If one region is facing a power shortage and, therefore, higher prices, interregional transmission would allow the system to draw from a neighboring region experiencing a surplus. In addition to lower pricing, this also limits the need for every region to overbuild local generation capacity for outlier events.
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Figure 2: Power prices during Winter Storm Fern changed significantly by region and day
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It is essential to identify and remove the barriers that create these power price divisions and enable the energy arbitrage that captures that value and delivers it back to consumers' pocketbooks. The regulatory processes in place favor incumbent utilities and local solutions over interregional projects and a broader universe of developers.
Interregional transmission is essential to electricity affordability.
Due to lack of interregional transmission, energy is left on the table. During Winter Storm Fern, the solar and wind generation curtailed in SPP could have saved MISO consumers nearly $37 million if there were enough transmission to deliver it.8
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8 M. Goggin, Winter Storm Fern Lessons: Supplying Reliable Power to Meet Peak Demand, testimony before the House Committee on Energy and Commerce, March 17, 2026, Grid Strategies,https://d1dth6e84htgma.cloudfront.net/03_17_2026_ENG_Testimony_Goggin_9c06568654.pdf, at 8.
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Figure 3: Expanding transmission ties by 1 GW between neighboring grid operators could have captured up to $183 Million in value9
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Figure 3 shows the value that expanded interregional transmission could have brought across grid regions. If transmission ties had been expanded by 1 GW between regions, comparable to one new transmission line, ratepayers would have seen up to $183 million in value between January 23 and February 3, 2026./10 [Link to figure at the bottom]
The lessons aren't singular to Winter Storm Fern. Analysis by Grid Strategies after Winter Storm Elliott found that a single 1 GW transmission line between ERCOT and TVA would have provided nearly $95 million in value during that five-day event.11 After Winter Storm Uri, Grid Strategies' analysis found that a 1 GW transmission line between ERCOT and the Southeast could have saved Texas consumers nearly $1 billion.12 A nation-wide historical analysis by Lawrence Berkley National Lab (LBNL) assessed the price differences from 2012 to 2022 and found that "additional transfer capacity between regions would have been especially valuable, with a median value of $116 million per GW per year."13
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9 Id.
10 R. Levine and M. Goggin, Winter Storm Fern's impact on the price of power, and what to do about it, Niskanen Center, https://www.niskanencenter.org/winter-storm-ferns-impact-on-the-price-of-power-and-what-to-doabout-it/
11 ACORE, The Value of Transmission During Winter Storm Elliot, https://acore.org/wpcontent/uploads/2023/02/ACORE-The-Value-of-Transmission-During-Winter-Storm-Elliott.pdf, at 2.
12 M. Goggin and J. Schneider, The One-Year Anniversary of Winter Storm Uri, GridStrategies, https://gridstrategiesllc.com/wp-content/uploads/the-one-year-anniversary-of-winter-storm-uri-lessons-learnedand-the-continued-need-for-large-scale-transmission.pdf, at 8
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These statistics are not outliers; they are trends, and we are not on track to fix this problem.
Interregional transmission improves reliability.
In the Fiscal Responsibility Act of 2023, Congress directed the North American Electricity Reliability Corporation (NERC) to assess the current interregional transfer capability and recommend "prudent additions ...that would demonstrably strengthen reliability."14 NERC's report, published in 2025, defined a prudent addition as one that meets three criteria: strengthens reliability, serves load under extreme conditions, and does not create unintended reliability concerns.15
The report found that U.S. interregional transfer capability is about 84 GW. This capability is not only limited but highly uneven across pairs of regions and even seasonally. According to NERC's assessment, the U.S. grid needs 35 GW of additional transfer capability for reliability, which is roughly a 40 percent increase over the 84 GW baseline. NERC notes that some of this need may be met by projects already in planning, permitting, or construction, but the gap remains large enough to warrant deliberate policy attention. As noted in Niskanen's comments to FERC,
[U]nlike in the past decade, the U.S. is no longer experiencing steady load growth. In 2023, the Lawrence Berkeley National Lab (LBNL)...projected that [data center] load would triple to 12% [of nationwide consumption] by 2028-surpassing the Department of Defense, currently the largest electricity consumer in the U.S.16,17 As a result, the transfer capacity values calculated in the [NERC Interegional Transfer Capability Study (ITCS)] are already outdated and will become increasingly obsolete as data center demand surges toward 2030.
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13 J. Mulvaney Kemp et al., Electric transmission value and its drivers in United States power markets, Lawrence Berkeley National Laboratory, https://www.nature.com/articles/s41467-025-63143-5, at 1
14 Fiscal Responsibility Act of 2023, Pub. L. No. 118-5, Sec. 322, 137 Stat. 10 (2023), https://www.congress.gov/bill/118th-congress/house-bill/3746/text.
15 NERC, Interregional Transfer Capability Study (ITCS) Final Report, https://www.nerc.com/globalassets/initiatives/itcs/itcs_final_report.pdf, at xiv
16 Id., at 52
17 U.S. Department of Defense, Annual Energy Performance, Resilience, and Readiness Report, FY2023. https://www.acq.osd.mil/eie/ero/ier/docs/aeprr/FY23-AEPRR-Report.pdf, at 1; U.S. Department of Energy, Total Site-Delivered Energy Use in All End-Use Sectors by Federal Agency (FY2023), https://ctsedwweb.ee.doe.gov/Annual/Report/TotalSiteDeliveredEnergyUseInAllEndUseSectorsByFederalAgencyBi llionBtu.aspx
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Winter storms are further instructive of why interregional transmission supports reliability. Winter Storm Uri (2021) primarily affected Texas and the central United States, including the ERCOT, SPP, and MISO regions. During the event, ERCOT experienced outages across all major fuel types, averaging approximately 34,000 MW over two consecutive days, nearly half of its winter peak load.18 The storm and associated power outages contributed to 246 deaths in Texas alone.19 Meanwhile, ERCOT was only able to import approximately 800 MW from SPP during the week of the cold snap. By contrast, MISO, which maintained stronger interregional connections, was able to import roughly 13,000 MW at peak, approximately 15 times as much as ERCOT.20 The contrast between these regions shows that when outages occur across multiple resource types simultaneously, the ability to rely on neighboring regions can be the difference between keeping the lights on and widespread blackouts.
Winter Storm Elliott (2022) illustrates how transmission constraints can prevent the system from responding even when resources are available elsewhere. The storm affected a broad portion of the Eastern Interconnection, including PJM, MISO, SPP, and the Southeast. During the event, widespread outages of thermal generation, particularly gas plants affected by fuel supply disruptions, coincided with strong renewable output in parts of the Midwest. On Christmas Eve morning, wind plants in western MISO appear to have been forced to curtail their output while neighboring TVA was experiencing rolling blackouts, with power prices slightly negative in western MISO and exceeding $8,000/MWh in TVA territory at the same time.21
Winter Storm Fern (2026) reinforces this pattern under more recent system conditions. The significant regional price differences indicate that transfer limitations again constrained the system's ability to move surplus power to where it was needed. As with Uri and Elliott, Fern demonstrates that as the load grows and system conditions evolve, the ability to share resources across regions becomes increasingly important for maintaining reliability.22
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18 M. Goggins and J. Schneider, The One-Year Anniversary of Winter Storm Uri, GridStrategies, https://gridstrategiesllc.com/wp-content/uploads/the-one-year-anniversary-of-winter-storm-uri-lessons-learnedand-the-continued-need-for-large-scale-transmission.pdf, at 3
19 P. Svitek, Texas puts final estimate of winter storm death toll at 246, Texas Tribune, https://www.texastribune.org/2022/01/02/texas-winter-storm-final-death-toll-246/
20 M. Goggins and J. Schneider, The One-Year Anniversary of Winter Storm Uri, GridStrategies, https://gridstrategiesllc.com/wp-content/uploads/the-one-year-anniversary-of-winter-storm-uri-lessons-learnedand-the-continued-need-for-large-scale-transmission.pdf, at 4
21 ACORE, The Value of Transmission During Winter Storm Elliot, https://acore.org/wpcontent/uploads/2023/02/ACORE-The-Value-of-Transmission-During-Winter-Storm-Elliott.pdf, at 2 22 R. Levine and M. Goggin, Winter Storm Fern's impact on the price of power, and what to do about it, Niskanen Center, https://www.niskanencenter.org/winter-storm-ferns-impact-on-the-price-of-power-and-what-to-doabout-it/
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What are the barriers to the transmission we need?
Interregional transmission lines are in the national public interest, yet they face much higher, often insurmountable, siting and permitting barriers than other energy infrastructure.23 While transmission lines offer clear regional and national economic and reliability benefits, the authority to approve them rests largely with individual states or, in some cases, individual counties. A regional or interregional transmission line crossing multiple states must satisfy each state's siting process. As a practical matter, this means the slowest state determines when construction can begin. Of the five transmission projects in process at the time of a 2016 Lawrence Berkeley National Lab review, scheduled for completion by 2020, only one had been completed as of 2021, and that was a single-state project.24 The significant interregional benefits that transmission could yield are unlikely to be realized under a system designed around local decision-making.
Existing market structures also create unnecessary barriers to new transmission technologies, particularly high-voltage direct current technology. High Voltage Direct Current (HVDC) lines are a transmission solution that can provide both ancillary support, which helps maintain grid balance, and capacity services, which ensure sufficient supply to meet future demand.25 However, current RTO and ISO regulations do not allow HVDC operators to be compensated for these services, even though grid operators have markets in place to pay generators and other participants for the same functions. Allowing HVDC to compete on its merits to qualify for these payments would improve system reliability and strengthen the economic case for developers to build.
Regulatory structures have also been used to shield incumbent utilities from transmission competition. Over a decade ago, FERC removed the federal "right of first refusal" (ROFR) for regionally-planned, cost-allocated transmission projects in an effort to expand competition.
Since then, roughly a dozen states have enacted their own laws,26 granting incumbent utilities priority rights to build new transmission within their service territories, even when competitive bidding could reduce project costs by 20 to 30 percent.27 These laws suppress competition in wholesale electricity markets because fewer transmission lines mean less ability to move power across regions, thereby concentrating market power among local generators.
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23 L. Reed, Transmission stalled: siting challenges for interregional transmission, Niskanen Center, https://www.niskanencenter.org/transmission-stalled-siting-challenges-for-interregional-transmission/
24 J. Eto, Building Electric Transmission Lines: A Review of Recent Transmission Projects, Lawrence Berkeley National Laboratory, https://emp.lbl.gov/publications/building-electric-transmission-lines
25 R. Allen and R. Levine, Unlocking HVDC: How Congress Can Enable a More Resilient Grid, Niskanen Center, https://www.niskanencenter.org/wp-content/uploads/2025/07/Unlocking-HVDC-How-Congress-can-enable-amore-resilient-grid-FINAL.pdf, at 7
26 R. Levine, Z. Norris, and G. Olsen, ROFR laws fragment America's transmission grid, Niskanen Center, https://www.niskanencenter.org/rofr-laws-fragment-americas-transmission-grid/
content/uploads/2021/05/16726_cost_savings_offered_by_competition_in_electric_transmission.pdf, at 1
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What can Congress do?
The lesson from winter storms is clear: no type of generation is immune to severe weather. The geographic footprint of risk shifts from event to event, and the resources most affected change with each storm. Under these conditions, reliability depends not on any single fuel or technology, but on access to resources outside the most affected areas. Interregional transmission provides access by allowing system operators to draw on a broader and more diverse pool of supply, reducing the impact of localized disruptions and improving overall system resilience.
Some grid operators have undertaken regional buildouts that provided affordability and reliability benefits to consumers, but there is a dearth of interregional transmission. NERC's recent report highlights the gap and recommends a significant increase in interregional transmission as a prudent approach to strengthening reliability. The issue is that we lack mechanisms to spur that development, and, in fact, we have specific regulations that deter it.
Congress can change this with legislation that lets markets work. A clear, narrow Federal siting authority for high-capacity interstate transmission lines would cut through state-by-state red tape and incumbent biases, opening the energy markets to more competition. Further, Congress can explicitly support interregional transmission development through planning or capacity requirements. NERC's analysis indicated a significant need for reliability, and many studies have demonstrated the economic value. Planning or capacity requirements are far from risking an overbuild in transmission: analyses by industry and non-industry groups agree that there is plenty of room for growth. Congress can direct FERC to address technology biases that prevent high-voltage direct current lines from receiving compensation for the reliability benefits they can provide, and similarly support grid flexibility solutions that recognize the value data centers bring to the economy and the grid.
These policies will deliver a grid that grows the economy, that provides affordable energy, and that demonstrates America's competitive edge. The next industry can be built anywhere there are electrons; let's make sure it's right here in the U.S.
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27 J.P. Pfeifenberger et al., Cost Savings Offered by Competition in Electric Transmission, The Brattle Group, https://www.brattle.com/wp-
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Original text and figures here: https://www.energy.senate.gov/services/files/53CDB865-5CA1-4363-A239-116BFC9C5F55
National Consumer Law Center Director Cohen Testifies Before House Veterans' Affairs Subcommittee
WASHINGTON, April 4 -- The House Veterans' Affairs Subcommittee on Economic Opportunity released the following testimony by Alys Cohen, director of federal housing advocacy at the National Consumer Law Center, from a March 26, 2026, hearing entitled "Kitchen Table Issues: Lowering Costs for Veteran Families Through the VA Home Loan Program":* * *
Chairman Van Orden, Ranking Member Pappas, and Members of the Subcommittee, thank you for the opportunity to testify on behalf of the low-income clients of the National Consumer Law Center (NCLC)/1 regarding the VA Home Loan Guaranty Program.
We support ... Show Full Article WASHINGTON, April 4 -- The House Veterans' Affairs Subcommittee on Economic Opportunity released the following testimony by Alys Cohen, director of federal housing advocacy at the National Consumer Law Center, from a March 26, 2026, hearing entitled "Kitchen Table Issues: Lowering Costs for Veteran Families Through the VA Home Loan Program": * * * Chairman Van Orden, Ranking Member Pappas, and Members of the Subcommittee, thank you for the opportunity to testify on behalf of the low-income clients of the National Consumer Law Center (NCLC)/1 regarding the VA Home Loan Guaranty Program. We supportthe goal of promoting affordability for Veteran homeowners, and we recognize the key role the VA Home Loan Program plays in providing housing stability for the Veterans who have earned their home loan benefit through service and sacrifice. Throughout the country, Veterans and their families are struggling to keep up with increasing housing costs both for owning or renting a home.
The most important step the VA can take to promote affordability for Veterans is to help them avoid unnecessary and devastating home loss when they face financial hardships, including those hardships related to their service. To accomplish this, the Department of Veterans Affairs (VA) should ensure that systems are in place to help Veterans retain their homes when feasible.
These "home retention" programs keep kids in school, stabilize neighborhoods, prevent home equity loss, and allow Veterans to avoid an unforgiving rental market that in many parts of the country does not provide affordable alternatives to people who lose their homes. Research shows that helping borrowers facing financial hardship cure their delinquent payments and reduce monthly payments when necessary helps avoid defaulting again and saves the taxpayers tens of thousands of dollars in foreclosure-related claims./2
There is significant work for the VA in this area because the mortgage relief options available for Veteran borrowers remain less favorable than the options available to other borrowers with federally-backed mortgages. As a result, a higher share of VA seriously delinquent loans are moving to active foreclosure compared to Fannie Mae and Freddie Mac (GSE) and Federal Housing Administration (FHA) loans. As of the end of 2025, about 35% of seriously delinquent VA loans were in active foreclosure, compared to 30% for the GSEs and 25% for FHA./3
It is a bedrock principle of federal housing policy that borrowers who are facing financial hardship should have access to workout options to bring their loans current and avoid foreclosure where possible. Home retention policies provide stability for homeowners by giving them a path to recovery after financial hardships. These policies do not guarantee that all borrowers who fall behind can avoid foreclosure, but they help prevent avoidable losses. They also help federal investors, like the VA, avoid losses from unnecessary foreclosures, which supports the health of the program and reduces the cost to taxpayers. According to a recent analysis, the average home disposition "results in a loss to the guarantor of about $72,000," and well-designed loss mitigation options significantly reduce those losses./4
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1 Since 1969, the nonprofit National Consumer Law Center(R) (NCLC(R)) has worked for consumer justice and economic security for low-income and other disadvantaged people in the U.S. through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training.
2 See Home Retention Programs Save the GSEs and FHA Billions by Avoiding the High Cost of Preventable Dispositions (Housing Policy Council July 2025).
3 See ICE Mortgage Monitor (Dec. 2025) at 6.
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Research on loan modification performance provides compelling evidence that catching up arrearages while keeping payments the same for borrowers who faced temporary hardship, and providing targeted payment relief for borrowers whose hardships were permanent, are the most cost-effective means for providing assistance that reduces redefault rates. Unsurprisingly, options that increase the monthly payment make loss mitigation less effective for both groups and lead to significantly more redefaults and foreclosures./5
Following the below discussion of needed changes to VA's home retention program, we address the fact that VA has limited ability to affect the broader supply and affordability issues in the national housing market. VA borrowers operate within the broader national housing landscape and changes to the VA program would have limited impact. Moreover, VA's origination rules have yielded better loan performance than FHA's and changes should be considered with that in mind and with an eye toward continued fair lending compliance.
1. The new VA mortgage relief options should prioritize affordability.
The situation for delinquent VA borrowers should improve due to the passage of the VA Home Loan Program Reform Act (H.R. 1815), and we thank members of this Committee for your leadership on that legislation. However, the new "Partial Claim" program authorized in the legislation has not been implemented yet and VA's draft handbook proposals do not fulfill the promise of the legislation, especially with respect to affordability.
According to the VA draft waterfall plan, after mortgage servicers consider repayment plans (which allow for relatively quick repayment of the delinquent amounts in addition to making the regular monthly payments), they must then move to an evaluation of permanent loan modification options./6
It is reasonable for VA to consider loan modifications early in the process because, in some situations, modifications may provide payment relief to borrowers while also avoiding the use of Partial Claim funds, which are limited under the statute.
Yet, in the list of permanent modification options, before a borrower can access a payment-stabilizing Partial Claim VA's proposal requires a homeowner to accept up to a 15% increase in their monthly payment as part of a 30-year loan modification, despite the fact that they are very likely delinquent because they have experienced a financial hardship./7
Of the roughly 90,000 VA borrowers who are seriously delinquent on their loan today, we estimate that over 30,000 will face a payment increase if the program proceeds as drafted./8
VA has other options that create more affordable payments - a 40-year modification and the payment-stabilizing Partial Claim - but these options are not offered until later in the draft waterfall. As a consequence, the draft proposal makes less-than-effective use of the Partial Claim, which keeps monthly payments at the pre-hardship level by placing the past due amount at the end of the loan term so the borrower can resume their regular monthly payments.
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4 See Home Retention Programs Save the GSEs and FHA Billions by Avoiding the High Cost of Preventable Dispositions (Housing Policy Council July 2025).
5 See Quantifying the Savings from FHA's Home Retention Programs (Housing Policy Council Sept. 2025).
6 See Draft VA Manual M26-4 Chapter 5 Loss Mitigation at Steps 4-8 (posted March 4, 2026).
7 See id. at Step 6. Before the 30-year Modification, the servicer will consider the Traditional Modification, and the borrower will only receive it if it reduces the payment and they are otherwise eligible. If it increases the payment, the servicer will move to the 30-year modification, which, unlike the Traditional Modification, is automatically offered as long as it doesn't increase the borrower's monthly payment by more than 15%. We proposed eliminating the Traditional Modification in our comments because it introduces complexity and is not necessary.
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We sincerely appreciate the fact that VA placed its proposed waterfall on the drafting table for comment by stakeholders. We are hopeful that VA will make changes as a result of the consistent feedback it received to change the order of its waterfall to prioritize affordability by offering solutions that increase the borrower's monthly payment only as a last resort. However, if the waterfall proceeds without change, it would add a significant financial burden on Veteran borrowers who have already experienced financial hardships and are behind on their mortgage as a result. For example, the 30,000 seriously delinquent VA borrowers who would get a payment-increasing 30-year modification under VA's proposed program would see their monthly payment rise by an average of $150 per month (9%), which is $1,800 per year./9
Many if not most of these borrowers who are trying to regain their financial footing are unlikely to find the higher payment affordable.
The waterfall, if unchanged, also would unnecessarily raise costs for the taxpayer because payment-increasing modifications are much more likely to lead to foreclosure than payment-stabilizing or payment-decreasing modifications. The VA's proposed ordering of hardship assistance solutions, while understandably seeking to be sensitive to the effect of term extensions and total amounts due, is out of step with Fannie Mae, Freddie Mac, and FHA, which only consider payment increases as a last resort, if at all. To truly promote affordability, VA should ensure that Veteran borrowers have options that promote affordability first, which will save money for the VA Loan Guaranty Fund, Veteran borrowers, and mortgage servicers. In sum, a borrower's monthly payment is the most important aspect of maintaining an affordable mortgage, so loss mitigation should be designed to reduce or keep payments level when possible.
Thus, VA should direct servicers to implement modifications instead of Partial Claims early in the evaluation process or "waterfall" only where the modification results in an equal or lower payment. If the 30-year modification does not achieve this result, VA should direct the servicer to try the 40-year modification. If even this modification does not result in a level payment, then the servicer should evaluate the borrower for a Partial Claim, which restores the borrower's prehardship payment by moving the arrears to the end of the loan without modifying its terms.
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8 Estimates based on Ginnie Mae Loan Performance Data provided by Recursion and ICE McDash, and analyzed by Center for Responsible Lending. Note that such analysis is based on calculations from privately available data because VA does not publish loan performance data as FHA does.
9 Estimates based on Ginnie Mae Loan Performance Data provided by Recursion and analyzed by Center for Responsible Lending.
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Based on the research described above, a Partial Claim is significantly more likely to be successful than the payment-increase modification. Another reason to avoid modifications that result in a payment increase is the irreversibility of that action-once the loan's payment is increased through a payment-increase modification, a subsequent Partial Claim will only maintain that higher payment and can not bring the homeowner back to their original payment.
2. VA should provide a current alternative to foreclosure for those who can make payments and are waiting for the new home retention options.
One change is urgently needed. We urge the VA to adopt measures to hold off foreclosures until the Partial Claim program becomes widely available. We have suggested full pay forbearance as one reasonable means of relief. Under a full pay forbearance plan, the servicer would agree to start accepting monthly payments again for Veterans who have financially recovered and can resume making their monthly payments. The servicer would then agree to hold off on foreclosure. This would work well for Veterans who would qualify for a Partial Claim once the program is released. It would prevent the past due amounts from growing, get the borrower back in the habit of making payments, and reduce the amount of Partial Claim VA would ultimately have to pay. In addition, servicers would no longer be required to fund advances of delinquent principal and interest to Ginnie Mae or tax and insurance payments.
Both the VA Loan Guaranty Fund and mortgage servicers would be spared the cost of claims related to unnecessary losses.
3. VA should make additional changes to the loss mitigation program.
a. Make standard forbearance available.
Further, we suggest that VA follow industry standards (including for most other government-backed mortgage programs such as the GSEs and FHA) and offer borrowers the opportunity to request forbearance, which provides a temporary pause on payments when there is a hardship.
Borrowers should be specifically permitted to request, during each default, a forbearance of monthly payments up to a maximum of 12 months of delinquency. VA's draft waterfall, which does not allow for servicers to offer forbearance before evaluating for home disposition options, does not take into account that hardships may take time to resolve./10
Importantly, borrowers are encouraged to call their servicers early, but if they do so when they lose their job, they are going to be directed to home disposition options, even though the hardship may be temporary and the person may be eligible for loss mitigation in a few months, avoiding a loss to the VA program as well.
Research shows that reperformance rates are much better when borrowers contact their servicer early and stay in constant communication with their servicer rather than delaying contact and trying to deal with it themselves financially./11
Without this addition of forbearance, VA borrowers will have substantially worse loss mitigation options compared to GSE and FHA borrowers.
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10 See Draft VA Manual M26-4 Chapter 5 Loss Mitigation at Step 2(b) (posted March 4, 2026).
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b. Explicitly direct servicers to establish payment plans when the Partial
Claim becomes due.
When the Partial Claim becomes due at the end of the borrower's loan, a balloon payment will be triggered. The VA should include in its handbook material addressing its expectations "when the guaranteed loan matures" and a balloon payment is required for borrowers who pay until maturity./12
We recommend that VA add an expectation that servicers establish a reasonable payment plan for borrowers unable to repay the Partial Claim balloon payment in a lump sum on loan maturity. It would be tragic for borrowers to lose their homes due to an inability to repay the Partial Claim balloon payment all at once, when they faithfully repaid their VA-guaranteed mortgage for decades.
4. Finalize the positive aspects of the current proposal.
We appreciate that VA has taken steps to implement the Partial Claim program, and its use of the drafting table and its willingness to accept comments. VA's proposal included a number of positive developments that should be included in the final handbook language, including streamlining loss mitigation and not charging interest on the Partial Claim. We urge VA to also take additional steps to make their Partial Claim and loan modification programs more affordable for Veterans and effective for the VA Loan Guaranty Fund.
5. While some changes to VA lending programs can be made, they should preserve VA loan performance and are unlikely to serve as a major cure for the affordability crisis.
Aside from adjustments to its home retention program, the other steps VA could take, including those associated with origination costs, will only help around the edges at best or would seek to address issues that are not within VA's control. The problems of housing supply and overall market affordability are problems for all homebuyers and mortgage borrowers. For example, the particular issue of institutional investors using their significant financial advantages to purchase single family homes harms all families, including Veterans, who rely on mortgages and cannot compete with investor resources. The current Administration has recognized that this is a market-wide problem, and Veterans share the housing market with other borrowers. Addressing these dynamics is outside of VA's control and requires a whole-market set of solutions.
With respect to VA's appraisal and Minimum Property Standards, these perform important functions of ensuring the soundness of the homes Veterans purchase and catching faulty appraisals. We participated in VA's public comment process in 2024 discussing how to improve the appraisal and minimum property standards./13
We have urged VA, in any revision to its appraisal standards, to implement controls against appraiser bias consistent with fair lending laws.
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11 See Alexei Alexandrov, Laurie Goodman & Ted Tozer, Urban Institute, Normalizing Forbearance (July 2022).
12 See Draft VA Manual M26-4 Chapter 22 Loss Mitigation at 22.04 (posted March 4, 2026).
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Regarding the VA loan origination process, any steps the agency takes to alter its underwriting should take into account that VA loans perform very well, and the agency should avoid changes that could undermine this loan performance or would unnecessarily narrow access to the program. In particular, it is worth noting that VA's unique underwriting guidelines, with a focus on the borrower's residual income, have led to an impressive track record of performance.
Because the agency has enjoyed significant success with its underwriting process, and better loan performance than FHA,/14 the agency should be cautious of changes to its underwriting process. Moreover, any reductions in closing costs will be limited and can not have a significant impact on market-wide affordability issues.
6. VA should do a small-dollar mortgage pilot.
One constructive step the VA should explore is a small-dollar mortgage loan pilot in coordination with FHA. There is not sufficient mortgage financing available for borrowers who are seeking to buy relatively less expensive homes. There is a particular dearth of lending for mortgages with balances under $150,000. This lack of lending limits the ability of people with modest incomes to buy modest-priced houses and instead pushes them into a challenging rental market.
Some have blamed the federal Truth in Lending Act (TILA) rules that were developed in the aftermath of the financial crisis, and that test for high-cost mortgages and limit how loan originators are paid, as causes for the lack of small dollar mortgage lending. As indicated in our issue brief, Myths and Facts About Ways to Increase Small-Dollar Mortgage Lending,/15 that is simply not the case. Because the thresholds for rules adjust depending on the size of the loan, they are sufficiently flexible to accommodate small mortgages and the CFPB already has the ability to do an evidence-based adjustment as needed.
However, we do recognize that economic forces are limiting the availability of small dollar credit, and this directly impacts affordability. In order to better understand the state of this market and explore solutions, VA, along with FHA, should engage in a pilot program to better understand how to improve the situation. This pilot could include exploring different approaches to compensating loan originators, including salaries and minimum payments (even where a loan may be small enough to otherwise yield a smaller payment).
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13 See Comments to the VA Regarding Loan Guaranty: Minimum Property Requirements for VAGuaranteed and Direct Loans (Feb. 2024).
14 See Ginnie Mae, Report on VA Liquidity at 12-13 (Nov. 10, 2022); Congressional Budget Office, The Role of the Department of Veterans Affairs in the Single-Family Mortgage Market (Sept. 2021); Laurie Goodman, Ellen Seidman & Jun Zhu, Urban Institute, VA Loans Outperform FHA Loans. Why? And What Can We Learn? (July 2014).
15 See Myths and Facts About Ways to Increase Small Dollar Mortgage Lending, National Consumer Law Center (Aug. 2024).
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7. Conclusion
We appreciate VA's efforts to date to stand up the Partial Claim program, and urge VA leadership to focus squarely on the task before them - rolling out an affordable Partial Claim and loss mitigation waterfall. The agency should take steps to improve home retention programs in a manner that protects the VA Loan Guaranty Fund, eliminates unnecessary burdens on loan servicers, and ultimately stabilizes homeownership for Veterans who earned the home loan benefit through service and sacrifice.
Thank you for the opportunity to testify. We look forward to working with you and the VA to shape systems that will improve affordability for Veteran borrowers.
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Original text here: https://docs.house.gov/meetings/VR/VR10/20260326/119104/HHRG-119-VR10-Wstate-CohenA-20260326.pdf
National Association of Realtors Executive Committee Member Thompson Testifies Before House Veterans' Affairs Subcommittee
WASHINGTON, April 4 -- The House Veterans' Affairs Subcommittee on Economic Opportunity released the following written testimony by Kurt Thompson, Executive Committee member of the National Association of Realtors, and broker and owner of RE/MAX Liberty, Westminster, Massachusetts, from a March 26, 2026, hearing entitled "Kitchen Table Issues: Lowering Costs for Veteran Families Through the VA Home Loan Program":* * *
Chairman Van Orden, Ranking Member Pappas, and distinguished Members of the Subcommittee, my name is Kurt Thompson. I am the Broker/Owner of RE/MAX Liberty in Westminster, Massachusetts, ... Show Full Article WASHINGTON, April 4 -- The House Veterans' Affairs Subcommittee on Economic Opportunity released the following written testimony by Kurt Thompson, Executive Committee member of the National Association of Realtors, and broker and owner of RE/MAX Liberty, Westminster, Massachusetts, from a March 26, 2026, hearing entitled "Kitchen Table Issues: Lowering Costs for Veteran Families Through the VA Home Loan Program": * * * Chairman Van Orden, Ranking Member Pappas, and distinguished Members of the Subcommittee, my name is Kurt Thompson. I am the Broker/Owner of RE/MAX Liberty in Westminster, Massachusetts,where I have been helping buyers and sellers for over 29 years. I am a Certified Residential Specialist, a past President of the Massachusetts Association of REALTORS(R), and the 2012 Massachusetts REALTOR(R) of the Year. I am also a veteran. I served my country for eight years, in the Army Reserve and later with the 157th Air Refueling Wing at Pease Air National Guard Base in New Hampshire. I am proud of that service, and I am proud to say that the VA home loan program helped me achieve homeownership. That experience gave me a personal appreciation for what this benefit means, and it is part of why I work hard to make sure my veteran clients know about the program and can access it.
Today I am testifying on behalf of more than 1.4 million members of the National Association of REALTORS(R) (NAR), representing every zip code in the United States, who thank you for the opportunity to present NAR's views on improving and modernizing the VA Home Loan Guaranty program. NAR is America's largest trade association, and our members engage in all aspects of the residential and commercial real estate industries, with agents and brokers in every congressional district in the country.
NAR members work with veteran and active-duty homebuyers in every corner of this country, and we go above and beyond to serve them well. For example, NAR offers the Military Relocation Professional certification, which trains REALTORS(R) to understand the unique needs of current and former servicemembers and their families, guide them through the relocation process, help them make informed decisions about whether to rent or purchase a home, and explain the basics of VA financing. For a veteran coming home after years of deployment or active service, the housing market they return to can look completely different from the one they left. Having a knowledgeable REALTOR(R) in their corner can make the difference between getting into a home and losing the property. Someone who understands the VA loan program, knows how to structure an offer competitively, and can connect them with a lender who knows the program inside and out -- that is what veteran buyers need. That is the standard of service NAR members strive to provide, and it is why we care so deeply about making sure the VA program itself works as well as it should.
Part of my standard practice when working with any buyer is to ask whether they have VA eligibility, because if they do, that benefit is almost always their best financing option. The no-down-payment feature alone can be the difference between homeownership and continued renting for a veteran who is living paycheck to paycheck. When it works well, the VA loan program does not just put a veteran in a home, it helps them stabilize their housing costs and build multigenerational wealth. Helping a veteran reach that milestone is one of the most meaningful things I do in this job.
The VA home loan program has the potential to be even stronger than it is today, and this Subcommittee has the opportunity to make that happen. That is what I am here to discuss.
VA Home Loan Reform Act (H.R. 1815)
Before turning to opportunities for improving veteran access to sustainable homeownership, NAR wants to express sincere gratitude to this Subcommittee for its leadership on one of the most important veterans housing reforms in recent memory: the passage of the VA Home Loan Reform Act (H.R. 1815).
For years, veterans using VA-guaranteed home loans were the only homebuyers in America explicitly prohibited from directly compensating their real estate agent. As market practices shifted following the NAR settlement and sellers have become less willing to cover buyer agent fees, this put veterans in an increasingly difficult position: use their hard-earned VA benefit and risk going without professional representation or forgo the benefit altogether to level the playing field with other buyers.
NAR worked with both this Subcommittee and the Department of Veterans Affairs to address this. The VA took the first step by temporarily suspending the prohibition in 2024, providing immediate relief. But veterans needed a permanent solution, and H.R. 1815 delivered that.
Passed unanimously and signed into law, the Act requires the VA to develop a lasting strategy to ensure veterans are not disadvantaged when seeking real estate representation. It also establishes a new partial claims program to help veterans who are struggling to keep up with their mortgage payments, ensuring the program supports veterans long after the closing table. NAR has been engaged with VA on implementation and looks forward to continuing that work as the agency develops its permanent solution. We thank this Subcommittee for its leadership in getting H.R. 1815 across the finish line.
The Broader Context: America's Housing Affordability Crisis
To understand the value of the VA program, it helps to first look at the housing market veterans are entering. Even the strongest loan benefit can only do so much when available homes are in such short supply America faces a shortage of approximately 4.7 million homes. There were more homes available in 1995 than there are today, despite 75 million more Americans. Fourteen years of severe underbuilding following the Great Recession left a massive shortfall that we're still nowhere close to closing. The scarcity of affordable home inventory significantly blocks homeownership, and this issue disproportionately impacts first-time homebuyers. Many of my first-time homebuyers have effectively paused their home search due to affordability issues. First-time buyers now represent just 21 percent of all purchases, down from a historical norm of around 40 percent. The typical first-time buyer today is 40 years old, waiting more than a decade longer than their parents did to buy a home. A 10-year delay in buying means losing more than $150,000 in potential equity growth.
For veterans, this hits especially hard. The VA loan program's greatest strength, enabling veterans to purchase homes with no down payment, matters most when there are affordable homes to buy. When inventory is scarce and prices are elevated, even the best financing can only do so much.
Solving this requires action on multiple fronts. In the short term, we need to unlock existing inventory. One of the biggest barriers is outdated federal tax policy. The capital gains exclusion for home sales has not been updated in 27 years, and homeowners who have seen significant appreciation are effectively penalized for selling, which keeps homes off the market. NAR supports updating this exclusion through legislation like the More Homes on the Market Act (H.R. 1340) as one meaningful step to free up inventory. Improving VA loan assumability, which I will address shortly, is another tool that could help veteran buyers access existing inventory at mortgage rates lower than what is currently available.
In the longer term, we need to build more homes, particularly the smaller, more affordable starter homes that first-time buyers need. In my market in Massachusetts, most entry-level buyers are looking in the $300,000 to $500,000 range. Getting more homes built at that price point would make a real difference for veterans and first-time buyers alike, and there is legislation before Congress right now that would help do exactly that.
The Senate recently passed the 21st Century Road to Housing Act (H.R. 6644), and NAR encourages the House to consider the bill and work toward its timely passage. The bill confronts barriers to housing at all levels of government -- giving communities new tools and resources to plan and build for growth, streamlining federal processes that delay construction, modernizing federal housing programs to meet the needs of today, and improving financing options for manufactured and rural housing. Critically for this hearing, it also takes steps to improve access to credit for homebuyers and ensures veterans can take full advantage of their VA home loan benefits.
Veterans deserve a housing market with enough supply to make homeownership genuinely attainable, and this bill is an important step toward that goal. NAR remains deeply engaged on housing supply and affordability issues across Congress and will continue working with lawmakers to advance new ideas and solutions that make homeownership more attainable for all Americans, including those who have served our country.
The improvements to the VA program I will outline today are meaningful and necessary. Still, the program can only reach its full potential when paired with a broader effort to expand affordable housing opportunities for veterans. Strengthening the benefit and increasing supply are complementary goals, and both are essential.
Appraisals and Minimum Property Requirements: Where Veterans Lose Deals
When it comes to the VA program itself, I want to spend most of my time on appraisals, because this is where I see the problem most clearly in my day-to-day work.
The biggest competitive challenge I see for VA buyers is closing costs leading to appraisal risk. Many of my veteran buyers have limited cash on hand, and other than the VA funding fee, closing costs cannot be rolled into a VA loan. This means I often need to negotiate seller concessions to reduce their out-of-pocket expenses at closing. In hot real estate markets like my own, many sellers are not willing to simply reduce their asking price to cover those costs.
They want to net what they were expecting. So, to get the seller their number and secure the concession my client needs, the offer price has to go above asking. The appraisal then has to come in at that higher number, which may be higher than market value. If it does not, the home seller has to either take less than they wanted or walk away. When that seller has another offer on the table without that complication, they have to ask themselves whether it is worth the risk. That is where veterans lose properties.
That said, I have seen sellers accept VA offers over cash offers at the same price because they wanted to do right by a veteran. Those moments are genuinely moving, and they are a reminder of how much this country values the people who serve it. But I cannot count on that happening in every transaction.
Another issue that can arise is that VA appraisers are required to flag property conditions that other loan programs would simply pass over. When that happens, the seller may be asked to make repairs before the loan can close, adding time and cost to the transaction and giving sellers yet another reason to favor a conventional offer. In some cases, the only path forward is to order a second appraisal, which means more time and more money out of pocket for a buyer who often does not have a lot of either. NAR recommends that Congress direct the VA to bring its Minimum Property Requirements in line with the standards used by Fannie Mae and Freddie Mac. Greater alignment would reduce those misconceptions and make VAfinanced offers more competitive. It would also expand the pool of appraisers willing to work within the program and reduce friction throughout the transaction, all while maintaining the protections that veterans using the program deserve.
Appraisal wait times are also a problem, and they are made worse by a shortage of VA appraisers, particularly in rural markets. In competitive markets, long delays can kill deals.
Buyers lose rate locks, sellers get frustrated and move on, and the veteran is back to square one. NAR recommends that this Subcommittee examine how the appraisal process can be modernized to reduce wait times without sacrificing the quality and independence that protect both the borrower and the program, including 21st Century ROAD to Housing Act's call to widen the pool of appraisers allowed to perform appraisals for the VA. Ensuring that appraisers are compensated appropriately--for instance, indexing fees with inflation, allowing for surge fees, and expanding mileage reimbursement--could also grow the pool of appraisers in high-demand and rural areas. Any changes should be deliberate and evidencebased, but there is real opportunity here to do better for veterans. More broadly, NAR encourages Congress to ensure that VA has the staffing, technology, and resources necessary to administer the home loan program effectively and serve veterans in a timely manner.
Loan Assumptions: A Benefit That Has Yet to Deliver on Its Promise
VA loans are assumable, which in today's high interest rate environment sounds like an incredible feature. A buyer who takes on a seller's 2.5 or 3 percent mortgage instead of taking out a new loan at today's rates would save significantly on their monthly payment. I have had consumers ask me about this. Some of my veteran clients know their loan is assumable and want to know if it is a marketing advantage when they sell.
My honest answer is that I cannot think of a single transaction in my career where an assumption has actually closed. The process takes too long, sometimes 90 days or more, and most buyers cannot bridge the gap between the existing loan balance and the purchase price without a substantial cash down payment. For buyers who have that kind of money, a conventional loan is often just as easy. The assumption benefit exists on paper, but in practice it rarely pencils out.
I think there is real potential here that is going untapped, and NAR would welcome the Subcommittee's interest in finding ways to make assumptions more workable. Streamlining the process and shortening timelines would be a start. Part of the reason assumptions rarely get done is that lenders are not adequately compensated for facilitating them, so they have little incentive to prioritize the process. NAR recommends that the VA reevaluate its caps on lender compensation for facilitating mortgage assumptions. There are also ideas worth exploring around financing solutions that could help buyers close the equity gap, so that assumptions are not limited to the rare buyer who can cover the difference in cash. Congress should also address the fact that veterans currently lose their VA entitlement when their loan is assumed by a non-veteran, which can leave them without a benefit they earned through their service.
Conclusion
The VA Home Loan Guaranty program has been one of the most important benefits our nation offers to those who serve for over 80 years, and I am proud to have benefited from it personally. When it works well, it is a powerful path to homeownership and the kind of wealth-building that can last generations. I have seen that in my own life, and I have seen it in the lives of the veterans I have had the privilege of working with over nearly three decades in this business. This program deserves to be the best it can be, and NAR stands ready to work with this Subcommittee and the Department of Veterans Affairs to make that happen.
Thank you for the opportunity to testify. I welcome your questions.
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Original text here: https://docs.house.gov/meetings/VR/VR10/20260326/119104/HHRG-119-VR10-Wstate-ThompsonK-20260326.pdf
Electric Power Supply Association President Snitchler Testifies Before Senate Energy & Natural Resources Committee
WASHINGTON, April 4 -- The Senate Energy and Natural Resources Committee issued the following testimony by Todd Snitchler, president and CEO of the Electric Power Supply Association, from a March 25, 2026, hearing entitled "State of the Bulk Power System":* * *
Chairman Lee and Ranking Member Heinrich, thank you for the invitation to join today'simportant discussion. On behalf of the competitive power supplier community represented by the Electric Power Supply Association (EPSA),/1 we appreciate the committee's continued focus on both electricity affordability and the present and future reliability ... Show Full Article WASHINGTON, April 4 -- The Senate Energy and Natural Resources Committee issued the following testimony by Todd Snitchler, president and CEO of the Electric Power Supply Association, from a March 25, 2026, hearing entitled "State of the Bulk Power System": * * * Chairman Lee and Ranking Member Heinrich, thank you for the invitation to join today'simportant discussion. On behalf of the competitive power supplier community represented by the Electric Power Supply Association (EPSA),/1 we appreciate the committee's continued focus on both electricity affordability and the present and future reliabilityof the nation's electric grid during a time of substantial growth in electricity demand. Given the importance of the affordability of electricity, and EPSA's unrelenting commitment to electric grid reliability, I am pleased to highlight how EPSA's policy and regulatory priorities strive to ensure both an affordable and reliable bulk power system.
EPSA is the only national trade association representing America's competitive power suppliers./2
EPSA members own and operate approximately 225,000 megawatts (MW) of reliable and competitively priced, environmentally responsible generation facilities in all seven U.S. regions operating competitive wholesale energy markets - markets overseen by an Independent System Operator or Regional
Transmission Organization (ISO/RTO), and with one exception, regulated by the Federal Energy Regulatory Commission (FERC)./3
EPSA member assets are comprised of a diverse mix of fuels and technologies, including natural gas, nuclear, wind, solar, hydropower, battery storage, geothermal, and coal.
It seems as if a new load forecast announcing significant demand growth not seen in decades is announced almost weekly. It is not an overstatement to say that our nation is at an inflection point relative to demands on the electric grid, and whether these demand increases are driven by the construction of data centers to win the global race to develop Artificial Intelligence (AI), increased domestic manufacturing, digital currency mining, or electrification policies, our nation will need far more electricity in the coming decade (and beyond) than we currently produce. How much more, and when and where that demand will materialize, remains less certain. This uncertainty is not specific just to electricity demand but extends to the policy and regulatory environments for building new (and maintaining existing) supply as well.
It is this uncertainty that creates perhaps the greatest risks to both reliability and affordability for electricity consumers - the dangers of significantly under- or over-producing capacity during a time of volatile demand projections.
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1 This testimony represents the position of EPSA as an organization, but not necessarily the views of any particular member with respect to any issue.
2 https://epsa.org/about-epsa/
3 Competitive markets in Texas, administered by the Electric Reliability Council of Texas (ERCOT), are not subject to FERC jurisdiction but rather are regulated at the state level.
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Fortunately, there are policy and regulatory tools available to hedge this uncertainty. For your consideration, EPSA has identified five solutions (and one word of caution) where both policymakers and regulators can sharpen a simultaneous focus on reliability and affordability while accounting for volatile and constantly shifting demand forecasts. These solutions include continuing to harness the benefits of competitive wholesale energy markets; encouraging bilateral (or co-located) agreements; improving load forecasting; enacting statutory permitting and siting reform; and recognizing that the drivers of recent increases in retail electricity rates - spending on investment other than generation - is regulated at the state level.
I. A COMMITMENT TO WELL-FUNCTIONING COMPETITIVE WHOLESALE ENERGY MARKETS IS THE MOST CONSEQUENTIAL AND IMPACTFUL WAY TO PROMOTE ESSENTIAL INVESTMENT IN GENERATION WHILE PROTECTING RATEPAYERS FROM INEFFICIENT INVESTMENT
Over the last 25 years, competitive markets administered by ISOs/RTOs have definitively proven to be the most efficient and transparent way to meet our nation's electricity needs at the lowest cost while protecting electricity customers from inefficient investment. Well-functioning competitive markets support a reliable power system, foster competition, reward innovation and efficiency, and drive emissions reductions./4
However, competitive markets offer more than electric grid reliability. When investors in power plants - like EPSA members - choose to build new assets or upgrade existing facilities, they do so without a guaranteed rate of return or cost recovery for their investment. Competitive power suppliers rely on markets to send efficient price signals for when and where investment in capacity is required (or not required) and compete for the opportunity to recover their costs through those markets. Competitive markets do not offer a negotiated, guaranteed return on equity (ROE) or rate of return for asset owners. If competitive power suppliers make investments that prove to be inefficient or unnecessary, the investors bear the cost of that mistake. The risk of investing in generation remains on the developers and owners of power plants - not the ratepayer.
Of course, investment in power plants is a multi-decadal decision. As is true of all state or regional long-term planning efforts relating to the bulk power system, competitive power suppliers make assumptions about future demand and predictions about how regulatory and political environments will prefer to meet expected demand. However, when incorrect assumptions are made, preferences change, or unpredictable macroeconomic events arise to affect the supply/demand of electricity, competitive power suppliers shoulder the financial burden. One need only think back over the last 25 years to consider the unforeseeable events of significant consequence - including the shale gas revolution, the pace of technology change, the rise of accelerated large load additions to the system, and the ever-evolving political landscape - to recognize the folly in assuming that there is a perfect foresight in the electricity supply industry over the next few decades. That guaranteed uncertainty is why EPSA so strongly advocates for markets that immunize electricity customers from the risk inherent in multi-billion-dollar decisions made about investments in power plants.
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4 https://epsa.org/getting-to-the-truth-on-competitive-electricity-markets/
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In short, competitive markets keep the cost of inefficient investment on investors' balance sheets and not on retail electricity bills. For brevity's sake, I will briefly highlight a few other issues regarding EPSA's support for competitive wholesale markets.
* Much attention has been paid to clearing prices in the last three Base Residual Auctions (BRAs) in the PJM Interconnection region. PJM is perhaps the epicenter of the national challenge over the effect of data center development on electricity customers and ensuring that the affected states have sufficient capacity to meet rising demand for electricity./5
PJM is in the midst of an intensive stakeholder process to arrive at both short- and long-term solutions to this challenge, and competitive power suppliers are intently engaged in those discussions.
What has received far less attention is the response from competitive power suppliers to higher clearing prices in the BRA. For three capacity auctions prior to the 2025/2026 delivery year, capacity prices in PJM were at record low prices - clearing at or below $50/MW-day./6
However, the auction covering the '25/'26 delivery year (and in the subsequent two BRAs) sent a dramatically different message - PJM needs additional capacity to power the system. I'm proud to say that competitive power suppliers not only heard that message but responded with vigor.
Since the '25/'26 BRA results were announced in July 2024, competitive power suppliers have announced over 12 gigawatts of new capacity through new investment, uprates, or delayed retirements./7
The market is responding as quickly as practicable to a dramatic reversal in price signals.
PJM is grappling with a substantial forecasted increase in demand for electricity, and there is much work yet to be done. But as PJM, stakeholders, and regulators are challenged to find and implement appropriate solutions, we should continue to financially protect ratepayers by ensuring that unnecessary investments or investments that run over budget don't find their way into retail electricity rates.
* While often referred to as "deregulated," competitive markets are, in fact, subject to significant regulation and are better described as "restructured." While states (noting the caveat of Texas) do not have jurisdiction over wholesale markets, markets are subject to multiple and ever-present layers of thorough regulatory oversight. ISOs/RTOs may have independent market monitors internal to their organization working concurrently with separate independent external market monitors, both of which are backed up by the federal regulator - FERC - to constantly monitor and oversee the appropriateness of bids and clearing prices in competitive markets. Electricity customers can be assured that whether wholesale markets are sending an hour-long signal for short-term electricity generation, or offering a year-long commitment for capacity, there is a "cop on the beat" closely watching wholesale market outcomes. Further, ratepayers also should be mindful that state regulators oversee and approve their retail electricity rates, which include the cost of wholesale generation.
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5 PJM was also perhaps the epicenter of Winter Storm Fern, bearing the brunt of bitter cold temperatures throughout the Eastern United States in late January, and operating the grid at near peak demand for one of the longest durations in PJM's history. The experience underscores the importance of a well-prepared fleet of dispatchable resources, and as Senator King is fond of saying, "building the church for Christmas Eve Mass" (relating to the importance of meeting peak demand).
6 In the three PJM BRAs prior to the '25/'26 delivery year, resources clearing prices were $28.92 ('24/'25), $34.13 ('23/'24), and $50 ('22/'23).
7 https://epsa.org/wp-content/uploads/2025/12/P3-New-Generation_One-Pager.pdf
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* Competitive markets have enabled significant emissions reductions from generation fleets in ISO/RTO regions over the last 25 years. Nationwide, emissions from the overall U.S. power generation sector have fallen dramatically since the advent of competitive markets. Markets administered by ISOs/RTOs reward efficiency and innovation, and in regions where fuel costs and efficiency are significant drivers of competitiveness, the least-cost, most efficient resources will be rewarded. A commitment to wholesale markets has driven emissions and wholesale energy costs down, while improving electric grid reliability.
* EPSA acknowledges that the effect of increased U.S. exports of liquified natural gas on retail electricity rates is a hotly debated topic. It is notable that despite dramatic increases in LNG exports over the past decade, on balance domestic natural gas prices have remained remarkably stable. However, "affordability" advocates should be mindful that no matter how much LNG is shipped from the U.S., inadequate domestic fuel supply infrastructure can have a far greater impact on ratepayers in regions that are unwilling to ensure that a sufficient supply of deliverable fuel can benefit electricity customers.
New England offers a cautionary tale. On the coldest days of the year, New England does not have the necessary supply infrastructure to ensure sufficient levels of natural gas to adequately supply needs for home heating and power generation, requiring the grid operator to lean heavily on older, less efficient oil-fired generators to ensure reliability. January brought bitter cold temperatures to supply-constrained New England, and as a result, natural gas - and wholesale energy - prices increased substantially. The average price of natural gas in New England exceeded $24/MMBtu for the month - up nearly 63% from December 2025./8
Wholesale energy prices in January were 19% higher than December and 14.5% higher than January 2025. When considering the "affordability" of retail rates, it is important to ensure that insufficient fuel supply infrastructure does not adversely raise fuel prices (and thus electricity prices).
II. VOLUNTARY BILATERAL AGREEMENTS, INCLUDING PHYSICALLY "CO-LOCATED" PARTNERSHIPS - WHICH ISOLATE INVESTMENT RISK BETWEEN COUNTERPARTIES - SHOULD BE ENCOURAGED AS A VEHICLE TO PROTECT RATEPAYERS
The growing interest in voluntary bilateral partnerships between power plants (both existing and new) and large demand customers (like data centers) embody the competitive characteristics and ratepayer protection that wholesale markets encourage. Bilateral financial contracts are not new to competitive markets. Both the supply and demand sides of competitive markets have entered into bilateral agreements for years. However, discussions have recently broadened to include physically co-locating large loads with generation that in some cases may be behind-the-meter entirely. Whether limited to bilateral contracts, or including physical co-location, data centers and generators can drive a more rapid buildout of new infrastructure that isolates the investment risk to the contracting parties and protects ratepayers from shouldering the cost of any inefficient investment.
EPSA supports allowing large demand customers to procure their own new generation to provide certainty over their supply cost. For an investor like a hyperscaler, the benefit is a hedge against possible long-term price volatility. For a generator, the upside is certainty of revenue over a given period - a benefit that is rare for competitive power suppliers over a multi-year period. EPSA believes that colocation has the potential to accelerate development of new resources and is consistent with the longstanding use of bilateral agreements.
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8 https://isonewswire.com/2026/02/25/monthly-wholesale-electricity-prices-and-demand-in-new-england-january2026/
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When considering bilateral agreements and/or co-location, it is important to keep in mind timelines for development. Regarding dispatchable generation, it takes four or more years to build a new natural gas power plant, while data centers can be built in a fraction of that time./9
"Bring your own generation" (BYOG) discussions should be mindful of the practical implication that - in the short-term - BYOG is likely a pairing with an existing generator if the timeframe for data center development is before the end of this decade.
EPSA appreciates and acknowledges all the work that FERC has done - and continues to do - to determine the best way to interconnect large loads while addressing the responsibilities of data centers to shoulder the cost of their energy development and interconnection. There are few blueprints or precedents for FERC to reference, and this issue does not have a single, silver bullet solution. However, a regulatory and statutory environment that encourages and incentivizes voluntary bilateral/co-location agreements could be transformative in sparking a wave of innovative investment that can bolster overall electric grid reliability while isolating ratepayers from bearing the cost of inefficient or unnecessary buildout.
III. BOTH COMPETITIVE MARKETS AND TRADITIONALLY REGULATED UTILITIES USE DEMAND FORECASTS AS THE FOUNDATION ON WHICH TO BUILD NEW GENERATION - BLOATED, ASPIRATIONAL, OR IRRATIONAL FORECASTS LEAD TO INEFFICIENCIES AND UNNECESSARY INVESTMENT
The investments required to ensure U.S. dominance over the development of AI and a domestic manufacturing renaissance begin with answers to several important questions. As I mentioned above, the energy industry is tasked with diagnosing how much additional electricity demand is coming, when it will materialize, and where it will be located. These are difficult questions to answer, and the consequences of inaccuracies include both reliability shortfalls and investors left with stranded generation assets, which in some (non-ISO/RTO) regions are backstopped by captive electricity customers.
Thus, we should not rush headlong into potentially trillions of dollars of energy infrastructure investments without a calculated and realistic projection for what infrastructure is needed. In short, accurate load forecasting is foundational - and at the very core - of whether our nation will sufficiently and affordably meet future demand for electricity.
For an example of how rapidly (and significantly) demand forecasts evolve, in early October 2025, it was reported that an investor-owned utility (IOU) in Ohio reduced its previous demand forecast from data centers from 30 gigawatts to 13 gigawatts and has since been further reduced to 5.7 gigawatts - a meaningful reduction resulting from a tariff change that set out the requirement of a financial commitment from data center developers to address their electricity needs./10
Accurate load forecasting is critical to ensure that we neither fail to meet the needs of the nation nor spend billions of dollars in capital on what may become stranded assets should load fall short of expectations. Thoughtful load forecasts take time and require more than basing projections on mere inquiries, and EPSA understands that the nation must move quickly to encourage and provide an adequate electricity grid for these investments. But allowing unrealistic or speculative projects to skew demand assumptions - instead of demanding disciplined forecasting - will only harm ratepayers by increasing costs and adding resources that may or may not be needed. EPSA remains engaged with regional grid operators and regulators to identify ways to ensure more realistic, accurate, and verifiable forecasts for this growing demand.
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9 The pressures affecting the building of new dispatchable generation are not unique to competitive power suppliers - rather these challenges are affecting all generation developers equally. There is no region in the United States, restructured or vertically integrated, where new dispatchable generation can sidestep the time-consuming processes and supply chain challenges also affecting competitive power suppliers.
10 https://www.datacenterdynamics.com/en/news/aep-ohio-slashes-data-center-pipeline-by-more-than-half-report/
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IV. PERMITTING REFORM IS PERHAPS THE MOST IMPACTFUL BENEFIT THAT CONGRESS CAN PROVIDE THE ENERGY INDUSTRY TO IMPROVE RELIABILITY AND ASSIST IN "AFFORDABILITY" EFFORTS
For years, generators were often frustrated by prolonged waits in regional interconnection queues to receive interconnection agreements (IAs). However, due to recent efforts in virtually all markets, queue processes continue to deliver meaningful improvements and faster processing times. The current dilemma, however, is energy generators are now experiencing a glut of proposed investments that have received IAs yet continue to be stymied when trying to navigate the permitting process. For example, there are more than 71 gigawatts of resources through the queue in the PJM Interconnection that are not yet adding electrons to the system or under active construction and development./11
In March, the Midcontinent ISO (through its Commercial Operations Date Report) indicated that it had cleared over 75 gigawatts of proposed investment through its queue that now have interconnection agreements that have not yet been constructed, with over 40 gigawatts of that generation "delayed" having run into various hurdles to completion and operation.
EPSA appreciates the broad support for statutory permitting reform in Congress. Permitting reform will minimize development costs and lead to the more efficient construction and interconnection of new generation. However, EPSA recognizes that "permitting reform" can be a nebulous, undefined concept, and would like to highlight several specific examples of excellent work already done on permitting reform (recognizing that the Senate Environment & Public Works Committee also has a key role to play in Senate discussions).
* H.R. 4776,/12 the Standardizing Permitting and Expediting Economic Development (SPEED) Act includes bipartisan language that attempts to provide permitting certainty to protect projects across administrations. Power plants are multi-decade assets - investors value certainty and now is the time to reverse the precedent of permitting whiplash (affecting both dispatchable and intermittent generation) and provide stability to investors.
* In September 2024, EPSA joined an amicus brief/13 at the U.S. Supreme Court in Seven County Infrastructure Coalition v. Eagle County, Colorado, supporting the petitioner's challenge to what has become an expansive approach to the effects assessed by federal agencies in their National Environmental Policy Act (NEPA) environmental reviews of new infrastructure projects. The SPEED Act provides valuable codification of the NEPA reforms outlined in the Court's Seven County ruling.
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11 https://epsa.org/pjm-interconnection-reform-permitting-barriers/
12 https://www.congress.gov/bill/119th-congress/house-bill/4776
13 https://epsa.org/wp-content/uploads/2024/09/Supreme-Court-23-975-Seven-County-Merits-INGAA-et-alAmius.pdf
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* In the prior Congress, this committee passed the Energy Permitting Reform Act./14
Title I of the bill includes prudent and responsible guardrails on the legal process for awards and review of key federal permits. EPSA appreciates the inclusion of reasonable timelines for the legal process to unfold and to prevent drawn out, undefined delays in federal permitting. Title V of the bill would wisely create a process for FERC to harness the expertise of the North American Electric
Reliability Corporation (NERC) when considering possible adverse impacts on electric grid reliability of proposed federal rules. The language does not appear to put a significant onus on FERC, as its role appears to be limited to directing NERC to conduct reliability analyses and to make those studies public.
As permitting reform negotiations have now restarted in earnest, Senators need not reinvent the wheel when valuable work on impactful reforms has already been done; instead, the Senate can utilize the existing work product to more expeditiously address these crucial issues and deliver development wins for the nation.
V. RECENT STUDIES HAVE CONCLUSIVELY SHOWN THAT INCREASES IN RETAIL ELECTRICITY RATES HAVE BEEN DRIVEN BY SPENDING ON TRANSMISSION & DISTRIBUTION - NOT FROM GENERATION.
In 2025, both the Lawrence Berkeley National Laboratory/15 (LBNL) and Energy Tariff Experts/16 (ETE, in conjunction with EPSA) released findings from separate studies identifying drivers of retail rates. Both studies - conducted independent of one another - returned remarkably similar conclusions.
Increases in retail electricity rates in the last few years are not the result of investment in new generation - rather, spending on transmission & distribution (T&D) infrastructure has resulted in higher costs.
LBNL summarized its findings by noting that "Distribution (and transmission) expenditures have contributed to retail price increases, whereas direct generation costs have declined nationally... Over the last two decades, aggregate investor-owned utility (IOU) spending on distribution and transmission increased in real, inflation-adjusted terms, whereas expenditures on generation generally declined." LBNL identified several drivers of this T&D spending, including replacing aging equipment, hardening and resilience upgrades, and supply chain challenges. While these upgrades may be necessary, captive electricity customers incur the cost directly.
Regarding the ETE study, which focused specifically on the PJM Interconnection region, the analysis examined "average residential retail electric bills over the past decade to evaluate the costs of generation from the PJM Interconnection market along with other costs such as distribution, transmission, and public policy programs that make up the total bill." The study clearly found that the cost of wholesale generation in the PJM region -- as a percentage of a customer's retail bill -- had held relatively steady, or in some cases even declined in the last decade. However, the study found that the cost of building electric transmission & distribution infrastructure has driven retail rate increases along with costs associated with state policy choices.
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14 https://www.congress.gov/bill/118th-congress/senate-bill/4753
15 https://eta-publications.lbl.gov/sites/default/files/2025-10/presentation_retail_price_trends_drivers.pdf
16 https://epsa.org/wp-content/uploads/2025/05/EPSA-ETE-Study_2025.5.14-FINAL.pdf
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To be clear, this is not a criticism of utility investments in distribution and transmission assets.
Our nation is coming out of a prolonged period of minimal increases in electricity demand, marked by lower wholesale energy prices. There will be an investment cost to not only build new generation, but for the poles and wires to improve and strengthen the transmission and distribution system. For instance, in late 2025, the Edison Electric Institute, which represents U.S. investor owned utilities, estimated that its members will spend over $1.1 trillion on grid enhancements in the next five years./17
While these investments are valuable to reliability and grid efficiency, relative to the "affordability" discussion, it is important to identify the economic drivers impacting retail energy bills, and where regulators choose to place the investment risk.
VI. REVERSING COURSE TO ALLOW UTILITY OWNED GENERATION IN RESTRUCTURED MARKETS TURNS A BLIND EYE TO WHY COMPETITIVE MARKETS WERE CREATED, DOESN'T SOLVE THE UNDERLYING CHALLENGES TO INTERCONNECTING NEW GENERATION, AND PUTS RATEPAYERS BACK ON THE FINANCIAL HOOK FOR ILL-ADVISED INVESTMENTS
Rapid demand growth in the PJM Interconnection has led to concerns about whether sufficient capacity will be developed in the coming years to meet that demand. Some have seized on this discussion to advocate for allowing investor-owned utilities to once again build and operate power plants, reversing nearly 30 years of restructured experience. Of course, this proposition is rooted in the requirement that the cost of investing in this new generation would be paid for - with an agreed-upon guaranteed rate of return - through retail electricity rates. As noted above, should unpredictable events render the capacity unnecessary before the end of its useful life, or the technology itself obsolete, ratepayers still foot the bill plus the return on equity. Advocates for this radical change in approach argue that somehow IOUs have a much clearer line of sight into formulating multi-decadal projections into the long-term needs of their state/region.
Of course, even with the guaranteed profit through a captive ratebase, no generation developer has a silver bullet for navigating permitting and siting challenges. While improvements have been made, every generation developer faces the same interconnection and permitting processes, regardless of the regulatory framework. Similarly, chronic workforce and supply chain shortages (particularly for natural gas turbines and substation equipment) pose the same challenges to all developers and are not somehow overcome with a guaranteed ROE. So, reversing course to allow monopolies that haven't built generation in decades to suddenly put ratepayers back on the hook for new assets overlooks the core reliability and affordability tenants that prompted the creation of competitive markets nearly thirty years ago.
Thank you again for the opportunity to participate in today's hearing, and I look forward to EPSA's continued engagement with the committee on issues affecting electric grid reliability and affordability.
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17 https://www.eei.org/-/media/Project/EEI/Documents/Issues-and-Policy/Energy-Grid/Fact-Sheet-GridResilience.pdf
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Original text here: https://www.energy.senate.gov/services/files/A1344DD3-B928-482D-A31C-EC6B9A08EBE4
Congressional Research Service Social Policy Specialist Huston Testifies Before Senate Budget Committee
WASHINGTON, April 4 -- The Senate Budget Committee released the following testimony by Barry F. Huston, specialist in income security at the Congressional Research Service, from a March 25, 2026, hearing entitled "Social Security: A Discussion on the Facts and the Path Forward":* * *
Chairman Graham, Ranking Member Merkley, and Members of the Committee:
Thank you for inviting me to testify on Social Security: A Discussion on the Facts and the Path Forward.
My name is Barry Huston and I am a Specialist in Income Security at the Congressional Research Service (CRS). My testimony will provide ... Show Full Article WASHINGTON, April 4 -- The Senate Budget Committee released the following testimony by Barry F. Huston, specialist in income security at the Congressional Research Service, from a March 25, 2026, hearing entitled "Social Security: A Discussion on the Facts and the Path Forward": * * * Chairman Graham, Ranking Member Merkley, and Members of the Committee: Thank you for inviting me to testify on Social Security: A Discussion on the Facts and the Path Forward. My name is Barry Huston and I am a Specialist in Income Security at the Congressional Research Service (CRS). My testimony will providean overview of Social Security, the program's projected financial shortfall, issues concerning the elimination of the shortfall, and conclude with a high-level discussion of past reform efforts.
Background on Social Security
Old-Age, Survivors, and Disability Insurance (OASDI), or Social Security, is a federal social insurance program that provides monthly cash benefits to eligible retired or disabled workers and their dependents, and to the eligible survivors of deceased insured workers.1 In 2026, Social Security covers approximately 186 million workers (about 93% of the workforce) and provides monthly cash benefits to over 70 million beneficiaries.2 The program is authorized under Title II of the Social Security Act and administered by the Social Security Administration (SSA).
Social Security is financed primarily by dedicated payroll taxes, which are credited to the program's OldAge and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds. The total Social Security payroll tax rate is levied on the earnings of covered workers, up to an annual limit (or contribution and benefit base).3 The two trust funds also receive income from the taxation of a portion of Social Security benefits and from interest earned on U.S. securities held by the trust funds (i.e., funds accumulated from years in which total income exceeded total cost). The OASI and DI trust funds are overseen by a Board of Trustees (trustees), which is tasked with reporting to Congress annually on the current and projected financial status of the trust funds. In their annual reports to Congress, the trustees have projected a financial shortfall within the 75-year long-range projection period every year since 1984./4 The projected shortfall is caused by demographic factors (e.g., fertility, mortality, and immigration), economic factors (e.g., wage growth, price growth, and productivity), and program-specific factors (e.g., disability benefits claim rates).
Of note: The main driver of the shortfall is demographic factors--primarily, the aging of the U.S. population caused by decreases in fertility and increases in longevity, which have resulted over time in a lower ratio of workers paying into the program (i.e., revenues) relative to beneficiaries collecting from the program (i.e., costs).5
Projected Financial Shortfall
The program's projected financial shortfall results from the relationship of its revenues, costs, and trust funds. The trustees' intermediate assumptions--their best estimate of future experience--project an ongoing and continued imbalance between these elements and estimate that the program will not be able to pay the full amounts of scheduled benefits in about seven years.6 Under the trustees' projections, it is estimated that the Social Security program will be able to pay 100% of scheduled payments until sometime in 2034 and about 75% of scheduled payments in the decades thereafter.7
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1 CRS Report R42035, Social Security Primer.
2 Social Security Administration (SSA), Office of the Chief Actuary (OCACT), Fact Sheet on the Old-Age, Survivors, and Disability Insurance Program, February 9, 2026, https://www.ssa.gov/oact/FACTS/index.html, and SSA, "Monthly Statistical Snapshot, January 2026, released in February 2026, https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/.
3 The contribution and benefit base is often referred to as the taxable maximum, or tax max.
4 The 75-year period is used because it covers the average life expectancy of all Social Security participants (i.e., those subject to the Social Security payroll tax and beneficiaries). For more information, see CRS In Focus IF11851, Social Security Long-Range Projections: Why 75 Years?.
5 For more information on how demographic factors affect the program's financial status, see CRS Report R48557, Social Security's Projected Shortfall: The Role of Demographic Factors.
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Revenues, Costs, and the Trust Funds
Social Security has three sources of revenue: (1) payroll taxes, (2) tax revenues from the taxation of Social Security benefits, and (3) interest earned on asset reserves held in the trust funds. The Social Security payroll tax--a 12.4% payroll tax, evenly split between employees and employers, on covered earnings up to an annual limit--is the program's primary funding mechanism.8 In addition, some beneficiaries are subject to federal income taxes on a portion of their Social Security benefits.9 These two sources of revenue comprise the program's tax revenues, sometimes referred to as non-interest revenue.
The program's tax revenues are credited to the program's trust funds, from which the program's costs are paid. As such, the trust funds provide an accounting mechanism that tracks the program's revenues and costs. The trust funds also provide a means to hold any accumulated assets (i.e., revenues not immediately needed to support costs). The excess tax revenues are held as asset reserves in the trust funds and are invested in interest-bearing U.S. Treasury securities.10 The resulting interest provides the third source of revenue.
Social Security has three costs: (1) monthly benefit payments, (2) administrative expenses,11 and (3) the Railroad Retirement financial interchange.12 Administrative expenses and the financial interchange typically account for about 1% of program costs on an annual basis.13 Thus, the program's costs are essentially its monthly benefits, which account for about 99% of costs on an annual basis.
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6 Board of Trustees, Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, 2025 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, June 18, 2025, p. 14, https://www.ssa.gov/OACT/TR/2025/tr2025.pdf (hereinafter 2025 Annual Report). Under current law, the OASI and DI trust funds are distinct entities and cannot borrow from each other when faced with a funding shortfall. The shifting of funds between OASI and DI can be done only with authorization from Congress. In the past, Congress has authorized temporary interfund borrowing among the OASI, DI, and Medicare Hospital Insurance trust funds, as well as temporary payroll tax reallocations between OASI and DI, to deal with funding shortfalls. Most recently, under the Bipartisan Budget Act of 2015 (P.L. 114-74), Congress authorized a temporary reallocation of payroll taxes from the OASI fund to the DI fund for calendar years 2016-2018. Because of such actions, the OASI and DI trust funds are discussed on a combined basis. Considered separately, the 2025 Annual Report projected the DI trust fund to have asset reserves throughout the 75-year projection period, whereas the OASI trust fund was projected to become depleted in 2033 (2025 Annual Report, p. 4). A subsequent OCACT memorandum stated that under the projected effects of P.L. 119-21, the OASI trust fund would become depleted in 2032, and the DI trust fund would not become depleted throughout the 75-year projection period (Karen Glenn, Chief Actuary, letter to Sen. Ron Wyden, August 5, 2025, https://www.ssa.gov/OACT/solvency/RWyden_20250805.pdf).
7 2025 Annual Report, p. 6.
8 In 2025, payroll taxes accounted for 91.2% of program revenues, income from the taxation of benefits accounted for 3.9% of revenues, and interest income accounted for 4.9% of revenues. See SSA, "Financial Data for a Selected Time Period," https://www.ssa.gov/OACT/ProgData/allOps.html.
9 For more information, see CRS In Focus IF11397, Social Security Benefit Taxation Highlights.
10 Since 1980, the asset reserves have been invested exclusively in special issues (i.e., non-marketable U.S. Treasury securities). Trust fund use of marketable securities is largely seen as disruptive to capital markets and thus not in the public interest. See Jeffrey L. Kunkel, Social Security Trust Fund Investment Policies And Practices, Social Security Administration, Actuarial Note Number 142, January 1999, at https://www.ssa.gov/oact/NOTES/pdf_notes/note142.pdf.
11 The program's administrative expenses are incurred by SSA and the Department of the Treasury for administering the program and provisions of the Internal Revenue Code (2025 Annual Report, p. 244). Administrative expenses are paid from the trust funds. Nearly all of SSA's administrative expenses are funded by appropriations to its limitation on administrative expenses account, and almost all of the funding for this account is provided each year as part of the annual appropriations process. For more information, see CRS Report R48187, Social Security Administration (SSA): FY2025 Annual Limitation on Administrative Expenses (LAE) Appropriation: In Brief.
12 For more information about the financing of railroad retirement benefits and its connection with the financing of Social Security benefits, see CRS Report RS22350, Railroad Retirement Board: Retirement, Survivor, Disability, Unemployment, and Sickness Benefits.
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Given projected changes to the program over the 75-year projection period--in terms of the number of workers, the proportion of earnings subject to the payroll tax,14 price growth, and wage growth--a common practice is to compare the program's tax revenues and costs as a rate of taxable payroll.15 As the program grows--in terms of the number of covered workers (i.e., revenue) and the number of beneficiaries (i.e., cost)--this practice provides a means to compare revenues and costs in a standardized manner. Figure 1 displays this standardization with tax revenues (i.e., non-interest revenue) and costs displayed as a percentage of taxable payroll from 2000 to 2099./16
Figure 1 shows that the projected revenue rate is relatively stable (flat) over the projection period at just over 13% of taxable payroll. [Link to figure at the bottom] Because the revenue rate is expressed as a percentage of taxable payroll, and the combined Social Security payroll tax rate is fixed under current law at 12.4% of taxable earnings, any remaining variation in the revenue rate is due to assumptions about the income from the taxation of benefits, which is a relatively small portion of revenue.17 The cost rate, which has been higher than the revenue rate since 2010, is projected to rise rapidly through 2040 because of demographic factors and then rise more gradually through 2080 before declining somewhat afterwards.18 The trustees project that costs will continue to exceed total tax revenues indefinitely. That is, the program will continue to experience annual deficits.19 At the point of projected trust fund depletion (2034)--when no trust fund asset reserves or interest income will be available--the difference between the projected cost rate and projected revenue rate reflects a benefit reduction. At this point, there will be a difference between scheduled benefits (benefit amounts specified under law) and payable benefits (percentage of scheduled benefits supported by tax revenues). The concept of scheduled versus payable benefits is discussed later and is visually represented by Figure 3. [Link to figure at the bottom]
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13 See SSA, "Cost Components," https://www.ssa.gov/OACT/ProgData/tsOps.html.
14 While the number of covered workers is expected to increase, and price and wage growth are expected to be positive, the proportion of earnings subject to the payroll tax is expected to be relatively stable. From a proportion of 83.5% in 2023, the trustees expect this to decrease to 82.5% by 2034 and remain constant thereafter. For more information, see SSA, OCACT, The Long-Range Economic Assumptions for the 2025 Trustees Report, May 18, 2025, p. 76, https://www.ssa.gov/OACT/TR/2025/2025_Long-Range_Economic_Assumptions.pdf.
15 2025 Annual Report, p. 257. Taxable payroll is the weighted sum of taxable wages and taxable self-employment income. When this sum is multiplied by the Social Security payroll tax rate (i.e., 12.4%), it results in the total amount of payroll taxes.
16 For the remainder of this testimony, the non-interest revenue rate--or tax revenue rate--will be described more simply as the revenue rate or income rate.
17 2025 Annual Report, p. 61.
18 2025 Annual Report, p. 14.
19 2025 Annual Report, pp. 13-15.
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Figure 1. Social Security Cash Flow as a Percentage of Taxable Payroll, 2000-2099
On a Combined Basis Under the 2025 Intermediate Assumptions
Source: 2025 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, June 18, 2025, Underlying data for Figure II.D2, p. 15, https://www.ssa.gov/OACT/TR/2025/tr2025.pdf.
Note: The trustees' intermediate assumptions reflect their best estimate as to the future experience. This figure examines the trust funds on a hypothetical, combined basis. The payable percentages differ from Figure 3 because of P.L. 119-21, see footnote 6.
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Cash Deficits, Annual Deficits, and Asset Reserves
The Social Security Amendments of 1983 (P.L. 98-21) are commonly considered the most recent major reform to Social Security.20 When the amendments were passed, Social Security was months away from being unable to pay full benefits. Among other provisions, the amendments used a combination of revenue-increasing and cost-reducing measures to improve the program's long-range financial status. As a result, from 1983 through 2009, Social Security operated with a cash surplus (i.e., tax revenues exceeded costs).21 Each of those year's cash surpluses accumulated in the trust funds and were invested in government securities--as required by law--earning interest and contributing to a growing level of asset reserves held in the trust funds (see Figure 2).22 [Link to figure at the bottom]
Since 2010, the Social Security program has operated with cash deficits (i.e., costs exceeded tax revenues).23 Thus, starting in 2010 the program has relied in part on interest income to pay the full amounts of scheduled benefits. As a result, the asset reserves continued to increase but at a slower pace (see Figure 2). Under the intermediate assumptions, the trustees project cash deficits for the remainder of the 75-year projection period.
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20 For more information on the development of the 1983 amendments, see CRS Report R47040, Social Security: Trust Fund Status in the Early 1980s and Today and the 1980s Greenspan Commission.
21 See SSA, "Old-Age, Survivors, and Disability Insurance Trust Funds, 1957-2024," https://www.ssa.gov/OACT/STATS/table4a3.html.
22 42 U.S.C. Sec.401(d).
23 See "Income Components" and "Cost Components" at SSA, "Time Series for Selected Financial Items," https://www.ssa.gov/OACT/ProgData/tsOps.html.
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Starting in 2021, the Social Security program has been operating annual deficits (i.e., total costs exceeded total revenues). Tax revenues and interest together have not covered the amount of scheduled benefits. Thus, since 2021, Social Security has redeemed a portion of the asset reserves held in the trust funds in order to pay the full amounts of scheduled benefits. Under the intermediate assumptions, the trustees project continuing and generally increasing annual deficits that will require redeeming increasing amounts of asset reserves (see Figure 2).24 The program is projected to be able to rely on asset reserves to help pay scheduled benefits for about seven more years.
The projected date of total asset reserve depletion is 2034 under the trustees intermediate (i.e., their best estimate) assumptions. At that point, with no trust fund assets to redeem, Social Security would be able to pay out in benefits only what it receives in tax revenues, which is projected to vary from 72% to 81% of scheduled benefits over the remainder of the 75-year projection period.25 The trustees' low-cost set of assumptions represents a future experience that is the most advantageous to the program's financial status--thus resulting in a less immediate depletion of asset reserves (2051)--whereas the high-cost set of assumptions represents a future experience that is the least advantageous to the program's financial status--thus resulting in a more immediate depletion of asset reserves (2032).
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24 2025 Annual Report, Table IV.A3, pp. 51-52.
25 2025 Annual Report, Figure II.D2, p. 15.
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Post-1983 Financial Reserves
Social Security's post-1983 financial history can be separated into three periods: accumulation, transition, and depletion.
The accumulation period, 1983-2009, experienced annual and cash surpluses wherein asset reserves increased each year.
During the transition period, 2010-2020, annual surpluses were offset by cash deficits resulting in a slower growth of asset reserves. In the depletion period, 2021-present, annual and cash deficits require redemption of asset reserves to pay scheduled benefits.
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Figure 2. Historical and Projected Social Security Trust Fund Asset Reserves, In Billions of Current Dollars
1980-2055 Under Intermediate, Low-cost, and High-cost Assumptions
Source: Congressional Research Service (CRS) and the supplemental single-year tables (Table VI.G8) for the 2025 Annual Report (see https://www.ssa.gov/OACT/TR/2025/lrIndex.html).
Notes: Projections use the trustees' 2025 projections. The low-cost set of assumptions represents a future experience (e.g., higher fertility, higher mortality, lower unemployment) that is the most advantageous to the program's financial status. The high-cost set of assumptions represents a future experience (e.g., lower fertility, lower mortality, higher unemployment) that is the least advantageous to the program's financial status. The trustees use the intermediate set of assumptions to illustrate their best guess as to the future experience. Cash surpluses (deficits) denote years in which tax revenues exceed cost (cost exceed tax revenues). Annual surpluses (deficits) denote years in which total revenues exceed cost (cost exceed total revenue).
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Scheduled Versus Payable Benefits
As discussed, Social Security's ability to pay the full amounts of scheduled benefits to current and future beneficiaries is determined by its revenues, costs, and trust funds. At the point of asset reserve depletion, there would be a difference between scheduled benefits (i.e., benefit amounts specified under current law) and payable benefits (i.e., the percentage of scheduled benefits supported by revenue). Figure 3 demonstrates that, prior to trust fund depletion, scheduled benefits will equal payable benefits. [Link to figure at the bottom] However, at the time of depletion (2034) and absent any changes to current law, total payable benefits will become equal to continuing tax revenues. In 2034, payable benefits would be about 80% of scheduled benefits, and this would gradually decrease to 71% by 2099. At the point of trust fund depletion, Figure 3 displays different percentages of payable benefits than Figure 1. This difference (i.e., lower payable benefits) reflects updated projections to include the effects of P.L. 119-21.
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Figure 3. Social Security Benefits: Scheduled Versus Payable (2000-2099)
Payable Benefits as a Percentage of Scheduled Benefits
Source: CRS, based on memo from Kyle Burkhalter, Actuary, and Zhongde Li, Actuary, to Daniel Nickerson, Supervisory Actuary, and Karen Glenn, Chief Actuary, Social Security Administration, Office of the Chief Actuary (OCACT), "CurrentLaw OASDI Payable Percentages: Current-Law Revenue as a Percent of the Cost of Providing Scheduled Benefits Through Year 2099, Incorporating the Effects of Public Law 119-21--Information," August 15, 2025.
Notes: Projections are based on the trustees' 2025 intermediate assumptions and the projected effects of P.L. 119-21 (the FY2025 budget reconciliation law) for the combined Social Security trust funds. In calculating the share of payable benefits, OCACT limits revenue from the taxation of benefits to the amount that would be obtained from the payable benefits.
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Eliminating the Projected Shortfall
Under current law and intermediate assumptions, the trustees estimate that in about seven years the Social Security program will be unable to pay scheduled benefits in full and on time. To illustrate the magnitude of the changes needed to make Social Security solvent over the next 75 years, the trustees estimate the hypothetical immediate payroll tax increase (3.65 percentage points; from 12.4% to 16.05%) or hypothetical immediate benefit reduction (22.4%) needed to eliminate the projected financial shortfall.26 The projected rising costs, relative to revenues, indicate that were current law to change in the projected year of asset reserve depletion (2034), the hypothetical changes needed to eliminate the shortfall would increase in magnitude. If action were delayed until 2034, the trustees estimate a 4.27 percentage point increase in the payroll tax rate (from 12.4% to 16.67%) or a 25.8% reduction in benefits would be needed to eliminate the projected financial shortfall.27 In addition to illustrating the magnitude of changes needed to eliminate the projected financial shortfall, the previous example helps to characterize the types of solvency-related options: revenue-increasing and cost-reducing.
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26 The 2025 Annual Report, pp. 5-6. This calculation reflects the trustees' estimates at the beginning of 2025 and does not incorporate any effects from P.L. 119-21.
27 The 2025 Annual Report, pp. 5-6. This calculation reflects the trustees' estimates at the beginning of 2025 and does not incorporate any effects from P.L. 119-21.
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In practice, there are many more solvency-related measures available to lawmakers than the hypothetical examples previously discussed. For instance, each year the SSA's Office of the Chief Actuary updates a list of financial effects for over 100 commonly proposed solvency-related measures.28 The Congressional Budget Office provides a similar function in their Options for Reducing the Deficit and Social Security Policy Options.29 One similarity shared among these reports is the likeliness that no single provision would eliminate the financial shortfall.30 For this reason, many legislative proposals addressing the program's finances include both revenue-increasing and cost-reducing measures. To highlight the wide range of policy options available to lawmakers, some common solvency-related options (five revenue-increasing and five-cost-reducing) are listed in Table 1.
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Table 1. Selected Solvency-Related Social Security Policy Options
Revenue-Increasing ... Cost-Reducing
Eliminate the taxable maximum (i.e., make all earnings subject to the payroll tax) ... Reduce annual Cost-of-Living Adjustments, or COLAs, by specific percentage point (e.g., 1.0 or 0.5 percentage point)
Tax a portion of earnings above current-law taxable maximum (e.g., such that 90% of earnings would be subject to the payroll tax) ... Use chained version of Consumer Price Index for Wage and Salary Workers (CPI-W) for COLA calculations (reducing the annual COLA by about 0.3 percentage point)
Increase the payroll tax rate (e.g., from 12.4% to 14.4%) ... Reduce benefit growth by changing the indexation of bend points used in benefit calculation (from wage indexing to price indexing)
Cover newly hired State and local government employees ... Reduce monthly benefits by increasing number of computation years used in benefit calculation (e.g., from 35 to 40 years)
Include other sources of revenue (e.g., apply additional tax to investment income) ... Increase the full retirement age
Source: CRS.
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The selected policy options in Table 1 highlight some of the many types of provisions that lawmakers could include in solvency-related legislation. Looking ahead, the timing, degree, and nature of any future changes to the Social Security program will reflect the policy objectives of lawmakers engaged in the debate at the time. The Social Security Board of Trustees recommends that "lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them."31
Timing
Solvency-related legislation may be affected by timing in numerous ways. For instance, because of the growing imbalance between program revenues and costs, the magnitude of changes needed to eliminate the projected financial shortfall generally increases with time. This point can be illustrated by examining how some solvency-related provisions would have had an impact on the program's financial status had they been implemented in previous years.
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28 For a list of many policy options, see https://www.ssa.gov/OACT/solvency/provisions/index.html.
29 For the most recent examples of each, see https://www.cbo.gov/publication/60557 and https://www.cbo.gov/publication/51011.
30 For instance, the intermediate assumptions in the 2011 Annual Report were the last year that an elimination of the taxable maximum was projected to eliminate the projected financial shortfall (see https://www.ssa.gov/OACT/solvency/provisions_tr2011/charts/chart_run108.html). Under the intermediate assumptions in the 2025 Annual Report, the elimination of the taxable maximum would have eliminated 54% of the funding shortfall (see https://www.ssa.gov/OACT/solvency/provisions/charts/chart_run415.html). For more information on policy options related to the taxable maximum, see CRS Report RL32896, Social Security: Raising or Eliminating the Taxable Earnings Base.
31 The 2025 Annual Report, p. 7.
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Figure 4 and Figure 5 demonstrate how the timing of two different hypothetical provisions would have affected the program's financial status, expressed as changes to the projected trust fund ratio. The trust fund ratio is the trust fund's asset reserves at the beginning of a year expressed as a percentage of the projected total cost for the year. For instance, a trust fund ratio of 200% indicates that two years of projected benefits could be paid with asset reserves absent any additional income. A test of the program's short-range financial adequacy is satisfied if (1) the projected trust fund ratio is at least 100% at the beginning of the 10-year projection period and remains so for the entire 10-year projection period or (2) the ratio is below 100% at the beginning of the 10-year projection period but is projected to reach at least 100% within five years and remain at least 100% for the remainder of the 10-year projection period.32 Figure 4 shows the projected trust fund ratios had the taxable maximum been eliminated in the next year (e.g., under the 2010 Annual Report's intermediate assumptions, eliminate the taxable maximum beginning in 2011). Figure 5 shows the projected trust fund ratios had all future COLAs been reduced by 1.0 percentage point in different years. As can be seen, in both the revenue-increasing (Figure 4) and cost-reducing (Figure 5) example used, the trust fund ratio would have been improved had the change been implemented sooner (e.g., 2020) rather than more recently (e.g., 2025). Therefore, a change implemented in 2026 would have a more advantageous effect on the program's financial status than the same change implemented five years later.
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Figure 4. Trust Fund Ratios: Eliminate the Taxable Maximum
Source: CRS using SSA OCACT cost estimates (https://www.ssa.gov/OACT/solvency/provisions/index.html).
Notes: The trust fund ratio is the ratio of asset reserves (combined OASI and DI) to the cost of the program for the year.
Figure 5. Trust Fund Ratios: Reduce Cost of Living Adjustments by 1.0 Percentage Point
Source: CRS using SSA OCACT cost estimates (https://www.ssa.gov/OACT/solvency/provisions/index.html).
Notes: The trust fund ratio is the ratio of asset reserves (combined OASI and DI) to the cost of the program for the year.
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A second way in which solvency-related measures may be affected by timing is whether a provision is implemented at once or gradually over a period of time. The examples shown above (Figure 4 and Figure 5) both demonstrate an at once approach wherein the policy change would take effect immediately.
However, lawmakers may choose to delay the impact of a policy change or make the impact gradual. For instance, lawmakers could choose to tax an increasing amount of earnings above the current-law taxable maximum until the taxable maximum is eventually eliminated over a period of years. Similarly, lawmakers could choose to reduce the annual COLAs by 0.1 percentage points each year until, after 10 years, all future COLAs would be reduced by 1.0 percentage point.
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32 The 2025 Annual Report, p. 12.
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Congress has previously used such an approach. Although many of the provisions included in the Social Security Amendments of 1983 (P.L. 98-21) had an immediate effect, some did not. For example, one provision of the 1983 amendments gradually increased the full retirement age (FRA; the age at which a beneficiary would be entitled to his or her full basic monthly benefit without reduction for early claiming) from 65 to 67 over a 22-year period that started for those who turned age 62 in 2000. The increase in the FRA is fully phased in (the FRA is 67) for workers born in 1960 or later (i.e., for workers who become eligible for retirement benefits at age 62 in 2022).33
Degree
As discussed, the 1983 amendments are considered the last major reform to the Social Security program.
In the 1983 Annual Report, the trustees noted that the report marked the first time in a decade that the program showed a projected 75-year actuarial balance between cost and income.34 After the 1983 legislation, the program's projected cost and income rates were relatively close over the long-term.
However, in the ensuing years the program has moved farther out of actuarial balance.
In many Congresses since, lawmakers have introduced legislation that would eliminate the entirety of the projected financial imbalance.
Proposals such as these result in sustainable solvency, in which the estimated trust funds ratio is positive throughout the 75-year projection period and rising or stable at the end of the projection period.
Conversely, some proposals seek to address a portion of the projected financial imbalance. For illustrative purposes, one could imagine a proposal that consisted of two provisions: a cost-reducing provision that would decrease the annual COLA by 0.5 percentage points and a revenue-increasing provision that would gradually increase the taxable maximum such that 90% of earnings would be subject to the payroll tax by 2035. This pair of provisions would eliminate about 49% of the projected financial imbalance.38 Such an approach would delay the projected date of asset reserve depletion while providing for a higher percentage of payable benefits at the point of depletion.
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33 For more information on the 1983 amendments, see CRS Report R47040, Social Security: Trust Fund Status in the Early 1980s and Today and the 1980s Greenspan Commission.
34 The Board of Trustees, Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, 1983 Annual Report, June 24, 1983, p. 2, https://www.ssa.gov/OACT/TR/historical/1983TR.pdf.
35 At the start of 2025, the actual payroll tax rate increase that would have been necessary to ensure the trust funds remain fully solvent throughout the 75-year projection period was 3.65 percentage points. This is less than the 3.82% actuarial deficit for two reasons: (1) the actuarial deficit incorporates an ending trust fund asset reserve equal to one year's cost at the end of the projection period (i.e., 75 years) and (2) the actuarial deficit does not reflect behavioral responses to the payroll tax rate increase (The 2025 Annual Report, p. 6).
36 John A. Svahn and Mary Ross, "Social Security Amendments of 1983: Legislative History and Summary of Provisions," Social Security Bulletin, vol. 46, no. 7 (July 1983), p. 41, https://www.ssa.gov/policy/docs/ssb/v46n7/v46n7p3.pdf (hereinafter cited as "Svahn and Ross 1983").Taxable payroll is the weighted sum of taxable wages and taxable self-employment income. When this sum is multiplied by the OASDI program payroll tax rate, it results in the total amount of payroll taxes (The 2025 Annual Report, p. 257).
37 The 2025 Annual Report, p. 25.
38 The COLA reduction would eliminate 27% of the financial shortfall whereas the increase in taxable maximum would eliminate about 22% of the financial shortfall. The combination of the two, an elimination of about 49% of the financial shortfall, would not include any interactive effects between the two provisions (see https://www.ssa.gov/OACT/solvency/provisions/index.html).
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Projected Shortfall: 1983 Versus Today
The actuarial balance is a frequently used summary measure of the program's financial status. It is often interpreted as the approximate percentage point increase in the payroll tax rate that would be necessary for the trust funds to remain fully solvent throughout the 75-year projection period.35
Before passage of the 1983 amendments, the program faced an actuarial balance of -1.82% of taxable payroll.36 In the 2025 Annual Report, the trustees estimate the actuarial balance to be -3.82% of taxable payroll.37 In other words, the projected shortfall today is more than twice as large as the one lawmakers addressed in 1983.
Nature
Social Security legislation and reform could be initiated and developed in various ways. In most Congresses since the 1983 amendments, lawmakers have introduced Social Security solvency-related legislation that would eliminate or delay the projected financial shortfall. Unsurprisingly, given the size and impact of Social Security, solvency has also been the subject of numerous committee hearings in both chambers.
Solvency-related reform efforts have also been championed by presidents who established national commissions to address Social Security issues. Some commissions have focused solely on Social Security financing matters while others have focused on government-wide deficit reduction. The Social Security Amendments of 1983, the last major reforms to the program, were aided by the efforts of a presidential commission. However, as discussed below, Congress has not acted upon recommendations of a presidential commission since 1983.
Past Efforts to Eliminate the Shortfall
When evaluating the current prospects for congressional action on Social Security, people often look to the circumstances and events that led to the passage of the Social Security Amendments of 1983, which was the last time Congress made major changes to the program. It can be informative to understand the role of the 1981-1983 National Commission on Social Security Reform in the development of the 1983 amendments. Understanding the commission's efforts can shed light on one approach that was used in the past to reach consensus on a broad legislative package designed to address the system's financial imbalance.
National Commission on Social Security Reform (Greenspan Commission)
In 1981, President Ronald Reagan established the National Commission on Social Security Reform (commonly referred to as the Greenspan Commission) by executive order. The formation of the 15member commission was precipitated by concern over the Social Security program's short-term financing crisis, caused in large part by high inflation and lower than expected wages.39 The 1982 Annual Report projected that in the absence of legislative changes the OASI trust fund would become insolvent by July 1983./40
In January 1983, the Greenspan Commission submitted its report to the Administration and Congress on recommendations to improve the short- and long-range financial condition of Social Security.41 The commission's final recommendations followed the principle of balancing tax increases with benefit reductions. The commission also recommended unanimously that Congress not alter the fundamental structure of the Social Security program or undermine its fundamental principles in its deliberations on financing proposals.42 Key recommendations, roughly balanced between revenue increases and benefit reductions, were to:
* * *
39 Five were selected by President Reagan, five were selected by Senate Majority Leader Howard Baker (in consultation with the minority leader), and five were selected by House Speaker Tip O'Neill (in consultation with the minority leader). Each was restricted from selecting more than three members from his own political party.
40 The 1982 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, April 1, 1982, p. 2, at https://www.ssa.gov/OACT/TR/historical/1982TR.pdf.
41 Report of the National Commission on Social Security Reform, January 1983, http://www.ssa.gov/history/reports/gspan.html.
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* make Social Security coverage mandatory for newly hired federal civilian employees and employees of nonprofit organizations;
* prohibit state and local governments from terminating Social Security coverage; delay the annual 1983 COLA for six months;
* make up to one-half of Social Security benefits subject to federal income taxes for certain beneficiaries and credit the revenues to the Social Security trust funds;43
* establish a "windfall elimination provision" to reduce Social Security benefits for workers who also receive pensions from employment that was not covered by Social Security;44
* increase the Social Security payroll tax rate for self-employed workers, making it equal to the combined employer/employee payroll tax rate;
* accelerate scheduled increases in the Social Security payroll tax rate; and
* authorize interfund borrowing by the Social Security trust funds from the Medicare HI trust fund for 1983-1987.
The commission's full package of recommendations was estimated to address Social Security's projected short-term financing deficit as well as about two-thirds of its projected long-range actuarial deficit.
However, the commission could not agree on recommendations to address the other one-third of the projected long-range actuarial deficit, deferring to lawmakers to come up with proposals to do so. After the commission released its final report, President Ronald Reagan and Speaker of the House Tip O'Neil-- and other members of House and Senate leadership--endorsed the report.45 All provisions suggested in the commission's final report were included in legislation that eventually became law.46 The House-passed version of the bill included a provision to gradually increase the full retirement age from 65 to 67 (H.R. 1900, 98th Congress).47 The Senate-passed version of the bill, adopted long-term financing measures along the lines of the recommendations of the Greenspan Commission and included provisions to address the remaining long-range actuarial deficit by, among other things, gradually increasing the full retirement age from 65 to 66 beginning in 2015 and gradually reducing initial benefit levels by about 5% over the period 2000-2007 (S. 1, 98th Congress).48
In conference, the conferees agreed to the House provision to address the remaining projected long-range actuarial deficit solely by gradually raising the full retirement age by two years from 65 to 67. Other provisions that were not part of the commission's final report include: "fail-safe" financing mechanisms; provisions affecting dependents and survivors; and provisions with relatively small impacts on revenues or expenditures, including limitations on Social Security benefit payments to certain noncitizens residing outside the United States and convicted felons, expanded use of death certificates in verifying benefit eligibility, and others.49 Also included in the 1983 amendments were provisions to eliminate remaining gender-based distinctions and modify the Government Pension Offset, which reduced Social Security spousal and survivor benefits for people who also received pensions from non-covered employment.50 With their inclusion in the 1983 amendments, Social Security program rules have been gender-neutral.
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42 Ibid., ch. 2. At the time, the system's projected long-range actuarial deficit was equal to 1.80% of taxable payroll. Estimates showed that the consensus package would eliminate two-thirds of the projected funding shortfall, an amount equal to about 1.22% of taxable payroll.
43 For more information, see CRS Report RL32552, Social Security: Taxation of Benefits.
44 For more information, see CRS Report 98-35, Social Security: The Windfall Elimination Provision (WEP). The WEP provision was later repealed as part of the Social Security Fairness Act of 2023 (P.L. 118-273 ), see CRS Report RL30920, Social Security: Major Decisions in the House and Senate Since 1935
45 Svahn and Ross 1983, p. 7.
46 P.L. 98-21.
47 Svahn and Ross 1983, p. 16.
48 Svahn and Ross 1983, p. 18.
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The 1983 legislation was seen as solving the short-term and medium-term financing issues that had pressured Social Security for the prior 10-year period. After the 1983 legislation, the program's projected cost and income rates were relatively close over the long-term. However, in the ensuing years the program has moved farther out of actuarial balance.
Effectiveness of the Greenspan Commission
By the last formal meeting on December 10, 1982, the commission had failed to develop consensus recommendations. The impasse was broken when a smaller group of commission members and White House officials began to meet privately in December 1982. In the end, the recommendations in the commission's final report were projected to resolve two-thirds of Social Security's projected long-range funding shortfall, leaving Congress to resolve the rest. Robert Ball, a commission member and former Social Security Commissioner, stated,
Nothing, however, should obscure the fact that the National Commission on Social Security Reform was not an example of a successful bipartisan commission. The commission itself stalled--essentially deadlocked, despite continuing to talk--after reaching agreement on the size of the problem that needed to be addressed.... A commission is no substitute for principled commitment.51
Robert Ball credits the success of the extraordinary negotiations in January 1983 to several factors: Alan Greenspan's "lowkey, completely fair handling of his chairmanship;" the fact that "the key people in the final negotiations fortunately were the least ideological and most flexible of all the people involved since the inception of the commission;" "negotiations by proxy" whereby President Reagan and House Speaker O'Neill were always kept current but never committed themselves publicly until the last day of negotiations; and the threat of imminent insolvency of the Social Security system.52
Bipartisan Commission on Entitlement and Tax Reform
The Bipartisan Commission on Entitlement and Tax Reform, a 32-member panel appointed by President Clinton, was asked to examine ways to constrain the growth of Federal entitlement programs and to reform the tax system.53 Led by Senators Robert Kerrey and John Danforth, the panel was composed of 22 Members of Congress and 10 people from the public at large.54 The Commission issued an interim report in August 1994 outlining major concerns about the future growth of entitlements. On December 9, 1994, the chairmen proposed a package of options to address the issue, including measures to: gradually raise the age for full Social Security benefits to 70, establish mandatory personal savings plans using part of the current payroll tax, means test Medicare and raise its premiums and deductib1es, alter congressional and civil service pensions, and other changes. The Commission held its final meeting on December 14, 1994, but was unable to reach a consensus on specific options. Instead, it agreed to advise the President and Congress that a 30-year planning perspective is needed in fiscal policy-making to fully recognize the financial demands of entitlement programs that will emerge from the aging of the baby boomers and that laws need to be changed today to balance future entitlement promises with available funds. The chairmen's proposals and those of other commission members accompanied the final report, issued in late January 1995./55
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49 At passage, the 1983 amendments included two provisions related to the Social Security COLA: (1) a 6-month delay in the 1983 COLA and a shift of subsequent COLAs to a calendar year basis, and (2) a trust fund stabilizer provision.
50 Provisions to eliminate remaining gender-based distinctions had been passed by the House in 1977 but were not included in the final version of the Social Security Amendments of 1977. The Greenspan Commission did not include these provisions in their final report. With their inclusion in the 1983 amendments, Social Security program rules have been gender-neutral. The Government Pension Offset provision was later repealed as part of the Social Security Fairness Act of 2023 (P.L. 118-273 ), see CRS Report RL30920, Social Security: Major Decisions in the House and Senate Since 1935.
51 There are several versions of how a small group of negotiators was formed. This version is taken from Robert M. Ball, The Greenspan Commission: What Really Happened (New York: The Century Foundation Press, 2010), p. 70.
52 Ibid., p. 69.
53 Executive Order 12878, "Bipartisan Commission on Entitlement and Tax Reform," https://www.archives.gov/files/recordsmgmt/rcs/schedules/independent-agencies/rg-0220/n1-220-95-006_sf115.pdf. The commission is sometimes referred to as the Kerrey-Danforth Commission.
54 As originally announced, the Commission was to be composed of 30 members appointed by the President, 20 from Congress with equal representation from both chambers and both parties and 10 from either the public of private sectors. The commission was later expanded to 32.
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President's Commission to Strengthen Social Security
In May 2001, President George W. Bush established the President's Commission to Strengthen Social Security.56 The 16-member commission appointed by the President was directed to make recommendations on ways to "modernize and restore fiscal soundness to the Social Security system" in accordance with six guiding principles, one of which mandated the creation of personal retirement accounts.57 On December 21, 2001, the Commission issued a final report--Strengthening Social Security and Creating Personal Wealth for All Americans--that included three alternative plans for reforming Social Security.58 Under all three plans, workers could choose to invest in personal retirement accounts, and their traditional Social Security benefit would be reduced by some amount. The first plan would make no other changes to the program. The second plan would slow the growth of Social Security through one major provision that would index initial benefits to prices rather than wages. The third plan would slow future program growth through a variety of measures. To mitigate the effects of benefit reductions, the latter two plans would guarantee a minimum benefit and enhance benefits for widow(er)s. There was no congressional action on any of the three plans developed by the commission.
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55 The final report, and the list of reform proposals, can be seen at https://www.ssa.gov/history/reports/KerreyDanforth/KerreyDanforth.htm.
56 Executive Order 13210, "President's Commission to Strengthen Social Security," 3 C.F.R. Sec.13210, https://www.govinfo.gov/app/details/CFR-2002-title3-vol1/CFR-2002-title3-vol1-eo13210.
57 The 16-member commission consisted of eight Republicans and eight Democrats, with a Senator from each party serving as co-chair.
58 President's Commission to Strengthen Social Security, Strengthening Social Security and Creating Personal Wealth for All Americans, December 2001, https://www.ssa.gov/history/reports/pcsss/Final_report.pdf.
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President's Commission on Fiscal Responsibility and Reform
In February 2010, President Barack Obama established the National Commission on Fiscal Responsibility and Reform.59 The 18-member commission was composed of: (1) six members appointed by President Obama (including the two co-chairs); (2) six Senators--three appointed by the Senate Majority Leader and three appointed by the Senate Minority Leader; and (3) six Representatives--three appointed by the Speaker of the House and three appointed by the House Minority Leader. The commission (commonly known as the Fiscal Commission or the Simpson-Bowles Commission after co-chairs Alan Simpson and Erskine Bowles) was charged with "identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run." In addition, the commission was directed to "propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government."
On December 1, 2010, the commission issued its final report, The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform.60 The commission made a number of recommendations with respect to Social Security benefits and tax revenues. The Social Security recommendations included revenue-increasing and cost-reducing measures that would have: increased the progressivity of benefits, indexed the full retirement age to longevity, increased benefits for older beneficiaries, gradually increased the taxable maximum to cover 90% of earnings, decreased COLAs, covered newly hired state and local government workers, among other provisions. There was no congressional action on the Social Security component of the plan developed by the commission.
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59 Executive Order 13531, National Commission on Fiscal Responsibility and Reform, President Barack Obama, February 18, 2010, at https://www.federalregister.gov/documents/2010/02/23/2010-3725/national-commission-on-fiscal-responsibility-andreform.
60 The National Commission On Fiscal Responsibility And Reform, The Moment Of Truth: Report of the National Commission on Fiscal Responsibility and Reform, December 2010, https://www.ssa.gov/history/reports/ObamaFiscal/TheMomentofTruth12_1_2010.pdf.
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Original text and figures here: https://www.budget.senate.gov/imo/media/doc/mr_barry_fhutsontestimonysenatebudgetcommittee.pdf
Cato Institute Director Fisher Testifies Before Senate Energy & Natural Resources Committee
WASHINGTON, April 4 -- The Senate Energy and Natural Resources Committee issued the following testimony by Travis Fisher, director of energy and environmental policy studies at the Cato Institute, from a March 25, 2026, hearing entitled "State of the Bulk Power System":* * *
Chairman Lee, Ranking Member Heinrich, and distinguished members of the committee: Thank you for the opportunity to testify on the state of the U.S. bulk power system. The Cato Institute is a nonpartisan public policy research organization dedicated to the principles of individual liberty, limited government, free markets, ... Show Full Article WASHINGTON, April 4 -- The Senate Energy and Natural Resources Committee issued the following testimony by Travis Fisher, director of energy and environmental policy studies at the Cato Institute, from a March 25, 2026, hearing entitled "State of the Bulk Power System": * * * Chairman Lee, Ranking Member Heinrich, and distinguished members of the committee: Thank you for the opportunity to testify on the state of the U.S. bulk power system. The Cato Institute is a nonpartisan public policy research organization dedicated to the principles of individual liberty, limited government, free markets,and peace. At Cato, I am the Director of Energy and Environmental Policy Studies, and my research focuses on the role of free markets in improving the availability and affordability of energy and natural resources.
I. Executive Summary
The U.S. bulk power system has become sclerotic. American families and businesses face rising utility costs, and fast-growing new sectors of the economy--especially the technology sector--struggle to secure new electricity supplies on timelines that align with their business models. Congress should address these issues by reducing regulations, removing barriers to energy production and delivery, and creating opportunities to expand power supply at the rapid pace of American entrepreneurship.
Although many of the Biden administration's policies aimed at reducing energy costs were ineffective, the Trump administration faces the same difficulty in containing costs. The way to a prosperous, high-energy future that everyone can afford is to embrace free enterprise and cut the red tape that holds back a dynamic electricity industry.
Electric energy will be the workhorse for the coming revolution in artificial intelligence (AI). Congress should unleash the nation's resources--including our unique entrepreneurship--and give Americans the best opportunity to work, grow, and flourish in the new economy.
II. Electricity Is the Economy's Foundation
At the turn of the millennium, the National Academies of Engineering ranked the electric grid the greatest engineering achievement of the twentieth century./1
The main criterion for selection was how much an achievement improved people's quality of life. There is no doubt that reliable, affordable electricity improves the lives of everyday Americans.
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1 Wm. A. Wulf, Great Achievements and Grand Challenges, National Academy of Engineering, Sept. 1, 2000, https://www.nae.edu/7461/GreatAchievementsandGrandChallenges
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Consider American families that face energy insecurity./2
A Congressional Research Service report on electric utility disconnections highlighted the hardships and threats to energy security faced by many American families:
"Researchers estimate that approximately 1% of households are disconnected each year. Broader measures of energy insecurity (e.g., foregoing other necessary expenses like food or medicine) are higher, with approximately 30% of American households experiencing some form of energy insecurity.
Black and Hispanic households appear more likely to be disconnected than non-Hispanic White households. For many American families, electric utility disconnections are the most significant threat to energy security."/3
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2 Hannah Ritchie, Pablo Rosado and Max Roser, Access to Energy, Our World In Data, last revised Jan. 2024, https://ourworldindata.org/energy-access
3 Ashley Lawson and Claire Mills, Electric Utility Disconnections, Congressional Research Service, Jan. 31, 2023, https://www.congress.gov/crs-product/R47417
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Policymakers should understand the profound impacts that electricity policy can have on the daily lives of Americans. In living rooms across the country, the availability of low-cost electricity can make the difference between light and darkness, comfort and worry, or prosperity and hardship.
III. Policy Barriers to a Robust Power Grid
Unfortunately, we are still reeling from the previous administration's poor energy policies.
In 2023, for the first time ever, the North American Electric Reliability Corporation (NERC) identified energy policy as a leading risk factor for electric reliability./4
PJM Interconnection, Inc. (PJM), the largest electricity market in North America by revenue and volume, provided an accurate outline of the concerns facing the electricity industry in its 2023 report titled Energy Transition in PJM: Resource Retirements, Replacements & Risks./5
PJM identified four major trends (the bullets below are quotes):
* The growth rate of electricity demand is likely to continue to increase from electrification coupled with the proliferation of high-demand data centers in the region.
* Thermal generators are retiring at a rapid pace due to government and private sector policies as well as economics.
* Retirements are at risk of outpacing the construction of new resources, due to a combination of industry forces, including siting and supply chain, whose long-term impacts are not fully known.
* PJM's interconnection queue is composed primarily of intermittent and limitedduration resources. Given the operating characteristics of these resources, we need multiple megawatts of these resources to replace 1 MW of thermal generation.
High prices in the recent PJM capacity auction are further evidence of strain on the PJM system. Capacity prices rose nearly ten-fold between 2023 and 2024, highlighting the increases in new demand, the high cost of early power plant retirements, and the barriers to reliable new supply./6
IV. New Paths to Electricity Success
Policymakers are beginning to realize the gravity of the situation and the cost of failing to meet the AI moment. Data centers are the newest consumers on the grid, and their perspective is important to consider. Economist Frederic Bastiat wrote: "Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race." New customers on the power grid--such as large data centers--have different needs and priorities from existing customers.
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4 Robert Walton, NERC Assessment Identifies New Risk to Grid Reliability: Energy Policy, Utility Dive, Aug. 23, 2023, https://www.utilitydive.com/news/nerc-assessment-new-risk-grid-reliability-energy-policy/691590/
5 PJM Interconnection, Inc., Energy Transition in PJM: Resource Retirements, Replacements & Risks, Feb. 24, 2023, https://www.pjm.com/-/media/library/reports-notices/special-reports/2023/energy-transition-inpjm-resource-retirements-replacements-and-risks.ashx
6 PJM Interconnection, Inc., PJM Capacity Auction Procures Sufficient Resources To Meet RTO Reliability Requirement, Jul. 30, 2024, https://www.pjm.com/-/media/about-pjm/newsroom/2024releases/20240730-pjm-capacity-auction-procures-sufficient-resources-to-meet-rto-reliabilityrequirement.ashx
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Data centers need a sharp increase in electric capacity on short time frames. Yet these customers often face a wait time of several years before they can interconnect to the grid.
Further, the generators that would serve them also face long interconnection queues./7
In short, the incumbent system served the 20th century well but is falling short of meeting the rapid growth of the 21st century.
Congress should enact a reform that would retain the benefits of the public grid while allowing fast-moving consumers to take advantage of entrepreneurial speed. One such policy is Consumer Regulated Electricity (CRE), which would enable speed to power for the customers who value it most while not burdening the existing grid.
As laid out in more detail in a Cato briefing paper, CRE "is a reform that would allow privately financed, off-grid electric utilities to serve new customers under voluntary contracts. These utilities would be physically 'islanded' from the regulated grid and would not be subject to economic regulation at the state or federal level. Because they would not interconnect with incumbent systems, CRE utilities would impose no costs, reliability risks, or stranded-asset exposure on existing customers. CRE is thus a policy proposal that offers a practical and simple tool for policymakers."/8
V. Conclusion
Congress should foster a reliable, low-cost power grid that provides a solid foundation upon which to build a strong and growing American economy. And it is more important than ever that we allow speed to power and unleash some of our fastest-growing sectors, such as data centers. In physics, energy is defined as the ability to do work. Policymakers should remove the barriers erected by unwise energy policy and let Americans get to work building the future.
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7 Alisa Petersen, Katie Siegner, and John Coequyt, The Interconnection Queue Continues to Be a Barrier to American Economic Competitiveness, Rocky Mountain Institute, Mar. 17, 2026, https://rmi.org/interconnection-reform-ai-data-centers-generator-queues/
8 Travis Fisher and Glen Lyons, The Case for Consumer-Regulated Electricity: Private Electricity Grids Offer a Parallel Path to Energy Abundance, Cato Institute Briefing Paper No. 196, Feb. 3, 2026, https://www.cato.org/briefing-paper/case-consumer-regulated-electricity-private-electricity-grids-offerparallel-path
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Original text here: https://www.energy.senate.gov/services/files/7A5AED76-3E9C-4971-9684-221127D5DA90
Assistant Secretary of State for Educational & Cultural Affairs Nominee Dillon Testifies Before Senate Foreign Relations Committee
WASHINGTON, April 4 -- The Senate Foreign Relations Committee released the following testimony by Catherine Dillon, President Trump's nominee to be assistant secretary of State for educational and cultural affairs, from a March 26, 2026, confirmation hearing:* * *
Thank you, Dr. Foxx, for your kind introduction. I am incredibly grateful for your mentorship.
Chairman Hagerty, Ranking Member Merkley, distinguished Members of the Committee, it is truly an honor to appear before you today as President Donald J. Trump's nominee for Assistant Secretary of State for Educational and Cultural Affairs.
I ... Show Full Article WASHINGTON, April 4 -- The Senate Foreign Relations Committee released the following testimony by Catherine Dillon, President Trump's nominee to be assistant secretary of State for educational and cultural affairs, from a March 26, 2026, confirmation hearing: * * * Thank you, Dr. Foxx, for your kind introduction. I am incredibly grateful for your mentorship. Chairman Hagerty, Ranking Member Merkley, distinguished Members of the Committee, it is truly an honor to appear before you today as President Donald J. Trump's nominee for Assistant Secretary of State for Educational and Cultural Affairs. Iam deeply grateful to the President and to Secretary Rubio for entrusting me with leading this vital component of our country's foreign policy. I would like to thank my parents, John and Diane, and my boyfriend, Andrew who are seated behind me.
I would also like to thank my sister, Alexandra, and many friends watching from the audience and at home. Without your unconditional love and support, I would not be here today.
My professional experience has focused on ensuring complex organizations deliver on their promises. From Chief Clerk and Finance Director in the House of Representatives to a Director for the 2024 Republican National Convention, I have led in environments where success is not theoretical. It is measured in disciplined execution and meaningful strategic outcomes. During my time at the Department of State, I have applied that discipline to ensure State's vast personnel and resources serve the President's agenda and the American people.
If confirmed, I will bring that same rigor and clarity of purpose to the Bureau of Educational and Cultural Affairs by leading with four core priorities.
First, Strategic Alignment: Every ECA program and initiative must clearly advance America First priorities and our strategic national interests. In this period of great power competition, our exchange programs cannot be treated as legacy institutions running on autopilot. They are strategic assets, they are instruments of national power, and they are critical tools for advancing the interests of the American people. They must be administered as such.
Second, Fiscal Stewardship: I am experienced at managing high-stakes budgets. I will continue to apply fiscal scrutiny out of respect for the American taxpayer in my leadership of ECA to ensure efficiency and impact of every dollar spent. If a program is not delivering an adequate return on investment for the American people, we will reform it--in accordance with all applicable laws.
Third, Championing American Excellence: As we approach our nation's 250th anniversary and other major milestones like the FIFA World Cup and the 2028 Summer Olympic Games, ECA is uniquely positioned to tell the American story.
We will capitalize on these historic opportunities to showcase American excellence in innovation, education, and culture.
Finally, if confirmed, I commit to prioritizing the safety and welfare of our American exchange participants abroad, and to working at every level from our U.S. embassies to our interagency partners to guarantee that our foreign exchange participants are selected with intention and merit, vetted for our security, and are as respectful of our country as guests, as we are as hosts.
Mr. Chairman, I also remain committed to ensuring the bureau is cooperative with this body and responsive to your inquiries.
I am honored by this opportunity and humbled by the trust that President Trump and Secretary Rubio have put in me to ensure our exchange programs are at the core of advancing our national interests. I stand ready to begin achieving that vision on day one.
Thank you, and I look forward to your questions.
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Original text here: https://www.foreign.senate.gov/imo/media/doc/4de7d09e-f913-58f2-e349-6bf3ebe95b63/032626_Dillon_Testimony1.pdf
AFGE Local 3511 VP Guerrero Testifies Before House Veterans' Affairs Subcommittee
WASHINGTON, April 4 -- The House Veterans' Affairs Subcommittee on Oversight and Investigations released the following testimony by Dennis 'Sarge' Guerrero, vice-president of the American Federation of Government Employees Local 3511 at the Audie L. Murphy Memorial Veterans' Hospital in San Antonio, Texas, from a March 25, 2026, hearing on legislation affecting the VA workforce:* * *
Chairwoman Kiggans, Ranking Member Ramirez, and Members of the Subcommittee:
Thank you for inviting the American Federation of Government Employees (AFGE) to participate in today's Subcommittee Hearing on "Pending ... Show Full Article WASHINGTON, April 4 -- The House Veterans' Affairs Subcommittee on Oversight and Investigations released the following testimony by Dennis 'Sarge' Guerrero, vice-president of the American Federation of Government Employees Local 3511 at the Audie L. Murphy Memorial Veterans' Hospital in San Antonio, Texas, from a March 25, 2026, hearing on legislation affecting the VA workforce: * * * Chairwoman Kiggans, Ranking Member Ramirez, and Members of the Subcommittee: Thank you for inviting the American Federation of Government Employees (AFGE) to participate in today's Subcommittee Hearing on "PendingLegislation." My name is Dennis "Sarge" Guerrero, and I serve as the Vice-President of AFGE Local 3511 at the Audie L. Murphy Memorial Veterans' Hospital in San Antonio, TX. I am a 20-year U.S. Air Force Security Forces Combat Veteran who proudly served our country during Operation Desert Shield, Operation Desert Storm, Operation Desert Fox, and in Albania providing security for Kosovo refugee camps. For the past 18 years, I have continued to serve our nation and my fellow veterans as a VA police officer having attained the rank of sergeant.
On behalf of AFGE and its National Veterans Affairs Council (NVAC), representing over 800,000 federal and District of Columbia government employees, 325,000 of whom are proud, dedicated Department of Veterans Affairs (VA) employees, it is a privilege to testify today. Specifically, I plan to focus my testimony on legislation affecting the VA workforce, including thousands of VA police officers serving across the nation.
H.R. 8010, the "VA Police Recruitment and Retention Act"
AFGE and the NVAC strongly support H.R. 8010, the "VA Police Recruitment and Retention Act" introduced by Rep. Kennedy (D-NY). If enacted, this legislation would prohibit the Office of Personnel Management (OPM) and the VA from downgrading the positions of VA police officers, retroactive to October 1, 2025.
OPM's actions to downgrade the positions of police officers, which is the bureaucratic way of saying pay cuts, is counter the VA's mission "[t]o fulfill President Lincoln's promise to care for those who have served in our nation's military and for their families, caregivers, and survivors."
VA police officers have a critical and unique role in protecting the safety of veterans, their families, and VA employees every day. As AFGE has highlighted to this committee during previous hearings, VA police officers receive training at the Law Enforcement Training Center and additional specialized and tailored training in crisis intervention to help prevent veterans from harming themselves or others. Moreover, as 90 percent of officers are veterans themselves, these officers can tap into their own experience when both communicating with and policing veterans, building relationships with the veterans they serve, and understanding the nuances of the physical facilities where they police. As a fellow VA officer from the Great Lakes Region recently articulated to me:
"VA medical centers are complex environments that present unique law enforcement challenges. Officers respond to violent incidents, mental health crises, domestic disputes, narcotics activity, and threats against staff and patients."
This unfortunately happens across the country. Officers frequently interact with veterans armed with guns and knives or under the influence of drugs or alcohol.
This was tragically put in stark relief this month, after a VA social worker Nicholas Crews was murdered at a VA clinic in Jasper, Georgia, demonstrating not only the bravery and dedication required of VA police officers as well as the broad scope of their responsibilities.
The plan to downgrade VA police officer positions in the 0083 series is even more dire when considered in conjunction with the significant staffing shortage facing the VA Police Force. A VA OIG report entitled "OIG Determination of Veterans Health Administration's Severe Occupational Staffing Shortages Fiscal Year 2023"/1 noted that 73 facilities had a severe shortage of VA Police in the 0083 series, with more common shortages found for only seven positions./2
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1 "OIG Determination of Veterans Health Administration's Severe Occupational Staffing Shortages Fiscal Year 2023," August 22, 2023. VA OIG 23-00659-186.
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An updated 2024 version of the report noted that VA police shortages "were reported by at least 20 percent of facilities since FY 2018."/3
This has further worsened in the current FY 2025 report, as the VA OIG states:
"In FY 2025, the OIG found that 58 percent of facilities (80 of 139) designated Police as a severe occupational staffing shortage, making it the most frequently reported
nonclinical shortage occupation and most frequently reported of all occupations. The Police occupation was among the top five most frequently reported nonclinical shortages in each year since 2019, when VHA first made official designations for clinical and nonclinical occupations, and the seventh most frequently reported shortage among all occupations in 2018."/4
On the ground in VA facilities, the shortages referenced by OIG also hinder the ability of officers to perform their duties. In some facilities, expensive new security screening equipment sits unused as there are not enough officers to operate this equipment. There are other facilities where only one or two officers are available to respond to emergencies. In some cases, short staffing in 1A facilities limits response to one emergency at a time. The staffing problem is also acute for Community Based Outpatient Clinics (CBOCs) where the nearest officer is often miles away.
Short staffing and inadequate pay harms officer morale. One officer recently told me, "[m]orale across VA is low. [D]owngrading people only pushes more people to leave." Additionally, with the staff shortage at the level it is, VA facilities must further rely on extensive use of overtime, which often leads to the denial of annual leave for officers, leading to further burnout of the officers that remain.
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2 Id at 8.
3 "OIG Determination of Veterans Health Administration's Severe Occupational Staffing Shortages Fiscal Year 2024," August 7, 2024. VA OIG 24-00803-22 at 10.
4 "OIG Determination of Veterans Health Administration's Severe Occupational Staffing Shortages Fiscal Year 2025," August 12, 2025. VA OIG 25-01135-196 at 9.
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This is particularly problematic when VA police officers have other opportunities to serve in other federal agencies or in state, county, or local police forces that pay starting salaries significantly higher compared the planned downgraded GS-5 salary. For example, in Buffalo, NY, a GS-5 Step One makes $42,597 annually,/5 while an entry level City Police Officer (Step 1) earns $57,453./6
Similarly, a GS-5 Step one makes $41,341 in the Virginia Beach Region,/7 while a Police Recruit at the lowest level of the pay scale makes $54,863 in the City of Hampton, Virginia./8
Severe staffing shortages, low retention, and poor morale require attention and solutions, not downgrades in positions and pay.
The VA should do everything in its power to recruit and retain its police force. While AFGE is pleased that the planned downgrades have been "paused," AFGE still fully supports H.R. 8010, the "VA Police Recruitment and Retention Act," as it is a necessary first step to stem the tide of departures from the VA Police Department. AFGE strongly encourages the swift passage of H.R. 8010 to prevent any future downgrades from OPM and looks forward to working with the committee to pass this bill. AFGE welcomes the opportunity to work with the committee on other legislation that would support the VA Police force, including increased hiring, addressing higher wages, and granting VA Police Officers Federal Law Enforcement Officer retirements, commonly referred to as "6(c) benefits," and thanks Chairwoman Kiggans and Representative Kennedy for co-sponsoring H.R. 3226, the "Law Enforcement Officers Equity Act" to achieve that goal.
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5 See GS Salary Table 2026-BU. https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salarytables/26Tables/html/BU.aspx
6 See City of Buffalo, "Department of Police Recent Salary Figure FY2026" at 176 (10 of 23 on linked PDF) https://www.buffalony.gov/ImageRepository/Document?documentId=14525
7 See GS Salary Table 2026-VB. https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salarytables/pdf/2026/VB.pdf
8 See City of Hampton Virginia Police Department Step Plan Effective January 10, 2026. https://www.hampton.gov/DocumentCenter/View/48497/Police-Division-Step-Plan-PDF
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H.R. 7948, the "VA Employee Family Care Expansion Act"
AFGE supports H.R. 7498, the "VA Employee Family Care Expansion Act" introduced by Ranking Member Ramirez (D-IL). If enacted, this bill would codify the ability for a VA employee to utilize the Family Medical Leave Act (FMLA) to care for the parent of a spouse.
AFGE and the NVAC had previously negotiated this right into its Master Collective Bargaining Agreement, which is currently the subject of litigation.
While no VA employee would ever wish to be in the position to use FMLA to care for someone, it is unfortunately something that many of us, including myself, have had to do. Sadly, this month, my father of blessed memory passed away, and I used FMLA to take care of him and be with him in his final days. Having the ability to use this leave was a relief to me and my family and didn't force me to make a choice between being a son and being a VA police officer serving my fellow veterans. Had it not been my father, but one of my in-laws in this situation, not being able to use this leave would have been devastating and forced a cruel choice for me and my family.
Passing this legislation and restoring this right to VA employees is a commonsense policy that would allow VA employees to better serve our nation's veterans and improve recruitment and retention. AFGE urges its swift passage.
Draft legislation to establish an entitlement to a supplemental period of unpaid parental leave for employees of the Department of Veterans Affairs
AFGE supports the draft legislation being considered by this subcommittee to establish entitlement to a supplemental period of unpaid parental leave for employees of the Department of Veterans Affairs. If enacted, this bill would codify a VA employee's right to four additional weeks of Leave Without Pay (LWOP) for the purposes of parental leave following the birth or adoption of a child. AFGE and the NVAC had previously negotiated this right into its Master Collective Bargaining Agreement, which is currently the subject of litigation.
Passing this legislation and restoring this right to VA employees is a commonsense policy that would allow the dedicated workers who take care of our nation's veterans, many of whom are veterans themselves, the ability to stay home with a new child, if they choose, for an extra month with no pay. Enacting this policy will help VA stay competitive with other employers who offer similar or more generous options and improve recruitment and retention.
AFGE urges its swift passage.
Draft legislation to establish a professional certification requirement for certain sterile processing technicians of the Veterans Health Administration
Chairwoman Kiggans' draft legislation would amend Title 38 to prospectively require that sterile processing technicians attain a certification from an accredited institution prior to working at the VA and gives incumbent sterile processing technicians up to two years to earn this certification. The bill also does not apply to positions the Secretary of Veterans Affairs considers as entry level.
AFGE appreciates Chairwoman Kiggans' intent in improving the training of Sterile Processing Technicians at the VA. However, the current version of the bill raises several questions that require clarification before AFGE can take a position on this legislation.
First, the bill neither defines which certification is required, nor which institutions are accredited. Further, it does not consider whether the VA can offer this certification in-house instead of relying on private companies. Currently, these technicians take an internal certification course called the VA Certified Registered Medical Supply Technician (VA-CRMST).
Technicians must finish the certification within their first year at the VA and complete 400 hours of work prior to testing. Additionally, there are 12 hours of continuing education requirements for these employees. VA has standardized the VA-CRMST for VA technicians and allows it to be completed during the workday with no individual expense for VA employees. What is the extra benefit to VA and its employees to further require, for example, the Certified Registered Central Sterile Technician (CRCST) certification, recognized by the Healthcare Sterile Processing Association?
Second, what is the uniformity of the programs recognized by the Healthcare Sterile Processing Association? Do all these companies and their programs cover the same material, or is there variation in the programs and curriculum? Further, are any of those programs currently tailored for employees at the VA, as the VA's VA-CRMST program is?
Third, who will bear the cost of attaining the CRCST certification? Asking incumbent technicians who are between GS-3 and GS-6, making a starting salary of $36,745 to $51,442 in Washington, DC to pay for a certification costing thousands of dollars is cost prohibitive, especially when it can be done in-house. Moreover, while new employees would be required to have this certification prior to employment, the burden placed on current employees and earning this certification after hours is significant and may hurt with retention of these employees.
AFGE looks forward to learning more about this bill as it is considered by the subcommittee.
Draft legislation to authorize the Secretary of Veterans Affairs to recoup awards, bonuses, and relocation expenses paid to former employees of the Department of Veterans Affairs under certain conditions Rep. Self's draft legislation would allow the Secretary of Veterans Affairs to recoup bonuses and relocation expenses of former employees of the VA. AFGE opposes this legislation as it is an extension of the powers granted to the Secretary under the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 (Accountability Act). The VA has abused the powers of the Accountability Act since its inception almost nine years ago. In turn, AFGE has justifiable concerns as to how the bill would be implemented. Granting this power to claw back money from former employees since the law was enacted on June 23, 2017, poses problems for former employees who, after potentially almost a decade, do not have the ability to rebut the VA's claims. AFGE urges the subcommittee not to advance this bill.
Thank you for the opportunity to testify today and present AFGE's views on these bills. I look forward to answering your questions.
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Original text here: https://docs.house.gov/meetings/VR/VR08/20260325/119102/HHRG-119-VR08-Wstate-GuerreroS-20260325.pdf