GAO

Export Controls: Commerce Implemented Advanced Semiconductor Rules and Took Steps to Address Compliance Challenges

What GAO Found In October 2022, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a new rule to control the export of advanced semiconductors and related manufacturing equipment. Advanced semiconductors can be used for artificial intelligence, including in medical diagnosis and for military purposes, such as modeling nuclear explosions. Engineer Holding a Semiconductor The stated goal of BIS’s advanced semiconductors rule was to address U.S. national security and foreign policy interest and to counter the People’s Republic of China’s access to advanced computing to modernize its military, including nuclear weapons development, advanced intelligence collection and analysis, and surveillance. BIS published the rule as an “interim final” rule, which enabled enforcement of the rule before the end of a public comment period. BIS took this approach to avoid stockpiling of controlled items and to address other national security or foreign policy concerns. BIS issued two additional rules in 2023 that revised the controls of the 2022 rule. BIS also updated the technical specifications of the items controlled by these three rules and provided information requested by public commenters, such as on refined definitions and public briefings. After October 2023, BIS conducted reviews of its export controls, including reviewing public comments on existing rules. As a result of these reviews, BIS issued an April 2024 update to the rules. In September, BIS updated the Commerce Control List, among other changes. To develop, implement, and enforce compliance with the rules, BIS works with offices from six other U.S. agencies: the Departments of Defense, Energy, Homeland Security, Justice, State, and the Treasury. The roles of these agencies include providing technical or scientific expertise to Commerce, reviewing proposed rules, reviewing export license applications, conducting outreach to private sector and foreign partner governments to improve compliance with the rules, verifying the validity of licenses at the border, and investigating and prosecuting violations of the rules, among others. The private sector has taken steps to comply with the new rules, according to GAO’s analysis of public comments, BIS documents, and other sources, as well as a number of interviews with private sector representatives. Compliance steps that companies took include updating and maintaining compliance programs and self-reporting potential violations. GAO’s analysis identified 10 reported compliance challenges, including lack of clarity of the rules. For example, specific Export Control Classification Numbers and what they encompass were unclear, leading some companies to ask whether an appliance would be considered a “computer” for the purposes of the export control rules. BIS reported taking steps to address some of these challenges, including by soliciting feedback, refining definitions, and engaging with the private sector. For instance, BIS conducted briefings, seminars, and other outreach in the U.S. and overseas to increase public understanding of the export control rules and to collect industry feedback on ways to improve the rules’ clarity. BIS officials also told GAO that BIS plans to review the rules and publish periodic updates as needed, to match advancing technology and to improve the clarity of the rules, among other reasons. Why GAO Did This Study GAO was asked to report on BIS’s development and implementation of three advanced semiconductor and related manufacturing equipment export control rules promulgated in 2022 and 2023, as well as what is known about private sector compliance efforts. This report provides information on steps BIS has taken and plans to take, and on the roles of other U.S. agencies in developing, implementing, and enforcing the rules and in engaging with foreign partners. It also provides information on compliance steps companies have taken and challenges they have encountered, based on private sector public comments on the rules, as well as GAO interviews with Commerce and representatives from four advanced semiconductor industry companies, and two industry associations. GAO selected the companies that fulfilled specific criteria, such as whether they had developed, manufactured, or sold a product targeted by the rules, or submitted a public comment to the rules. GAO selected external counsel and industry associations based on a number of criteria, such as whether they had submitted a public comment on the rules or represented multiple companies in the U.S. semiconductor industry. In addition, the report describes steps Commerce has taken to address these challenges. A forthcoming GAO report will examine the steps BIS has taken to enforce the export control rules on advanced semiconductors and related manufacturing equipment, as well as BIS efforts to engage with key foreign partners regarding the rules. An additional forthcoming GAO report will examine BIS’s processes and resources to control exports more broadly. For more information, contact Nagla’a El-Hodiri at (202) 512-7279 or elhodirin@gao.gov.

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Private Health Plans: Comparison of Employer-Sponsored Plans to Healthcare.gov Marketplace Plans

What GAO Found Most Americans get their health coverage from private health plans. In 2023, about 165 million individuals got their health coverage from an employer plan and 16.3 million got their coverage from plans purchased through Marketplaces established through the 2010 Patient Protection and Affordable Care Act. One of the costs for private health plans is the premium that needs to be paid for enrollment. GAO compared monthly premiums per covered individual for employer-sponsored and Marketplace plans using Agency for Healthcare Research and Quality survey data and Centers for Medicare & Medicaid Services' (CMS) Marketplace data, respectively. GAO found that for the 33 states included in its review (those that used the Healthcare.gov platform), in 2022, the estimated average monthly premiums for employer-sponsored plans were lower than the average premiums for Marketplace plans. However, stakeholders noted that differences in covered populations, such as in health status, complicate comparability of premiums between these two types of plans. Additionally, after employer contributions to employee premiums and federal premium tax credits for Marketplace plans, the average estimated monthly enrollee contributions to premiums per covered individual for employer-sponsored plans were higher than the average enrollee contributions to premiums for Marketplace plans. Taxes complicate comparability because enrollee contributions to employer-sponsored plans do not reflect their cost after tax savings. Average Monthly Premiums and Enrollee Contributions Per Covered Individual for Employer-Sponsored Plans (estimated) and Marketplace Plans in the 33 States That Used the Healthcare.gov Platform, 2022 Note: Enrollee contributions to premiums for employer-sponsored health plans are made with pre-tax dollars, which results in tax savings for enrollees. Enrollee contributions to premiums for Marketplace plans are generally made with after-tax dollars. Premiums for both employer-sponsored and Marketplace plans varied across the 33 states in 2022. In addition, for employer-sponsored plans, they varied by industry and for Marketplace plans they varied by tier of coverage. GAO found that differences in plan designs complicated comparisons of cost sharing across plans. For example, in 2022, estimated average deductibles for employer-sponsored plans were lower than for Marketplace plans, but GAO estimated that a higher percentage of Marketplace plan enrollees were in plans with no deductible. Why GAO Did This Study Private health plan spending is projected to exceed $1.5 trillion in 2024. This has financial implications for enrollees, who pay for either all or part of their premiums; for employers who typically contribute to employees' premiums costs; and for the federal government, which provides tax incentives and other financial support for Marketplace and employer-sponsored plans. GAO was asked to compare employer-sponsored plans to Marketplace plans. In this report, GAO describes, among other objectives, how average employer-sponsored plan premiums compared to Marketplace plans; and how average cost sharing to consumers in employer-sponsored plans compared to that of Marketplace plans. GAO reviewed Agency for Healthcare Research and Quality Medical Expenditure Panel Survey Insurance Component data on employer-sponsored plans and CMS Marketplace individual market plan data to estimate enrollment-weighted average premiums and cost sharing in 2022 in 33 states. These states were selected because they used the Healthcare.gov platform in 2022 (the most recent year of data available at the time of the review); thus, complete and comparable data were available for Marketplace plans across those states. Additionally, GAO interviewed officials from the Agency for Healthcare Research and Quality, CMS, the Department of the Treasury, and representatives from six stakeholder groups, such as those representing insurers and policy researchers, selected to reflect a range of expertise on the topics under review. For more information, contact John E. Dicken at (202) 512-7114 or dickenj@gao.gov.

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Air Force Readiness: Actions Needed to Improve New Process for Preparing Units to Deploy

What GAO Found The Air Force has taken steps to address some challenges in implementing its new process to organize and deploy its forces—known as Air Force Force Generation (AFFORGEN)—but continues to face a variety of ongoing challenges. The Air Force began implementing AFFORGEN in late 2022 to create forces that train and deploy together. To address lessons from early deployments, the Air Force has revised the composition of these forces and tailored the AFFORGEN process to specific types of units, such as bombers. Air Force F-16 and F-22 Training to Improve Combat Readiness However, GAO identified several ongoing implementation challenges. For example, the Air Force has not completed an assessment of minimum U.S. base staffing needs. Under AFFORGEN, the Air Force planned to deploy whole units from U.S. bases. However, it has relied on some of these personnel to operate its bases and perform duties like staffing security gates. The Air Force's ongoing efforts to implement AFFORGEN partially align with some selected leading reform practices and do not align with others. For example, while the Air Force has released visionary statements, it has not set goals to track implementation progress. Assessment of Air Force Efforts to Implement AFFORGEN with Leading Practices Leading reform practice Extent Air Force efforts align Establishing Goals and Outcomes ◒ Involving Employees and Key Stakeholders ◒ Using Data and Evidence ○ Addressing Longstanding Management Challenges ◒ Leadership Attention and Focus ◒ Managing and Monitoring ○ Employee Engagement ◒ Strategic Workforce Planning ◒ ◒ Partially aligned with leading reform practice ○ Did not align with leading reform practice Source: GAO analysis of Air Force information. I GAO-25-107017 Air Force officials said they rapidly implemented AFFORGEN to prepare for potential conflict with near-peer competitors. These officials recognized that an implementation plan with goals, a timeline with key milestones, and performance measures would help ensure unity of effort across the service and a shared understanding of the path forward. Why GAO Did This Study More than 2 decades of conflict have degraded the Air Force's readiness, with wide-ranging effects on personnel, equipment, and aircraft from near constant deployments. To rebuild readiness and restore predictability, the Air Force has begun implementing a new cyclical process to organize and deploy its forces, known as AFFORGEN. House Report 118-125, which accompanied a bill for the National Defense Authorization Act for Fiscal Year 2024, includes a provision for GAO to examine the implementation of AFFORGEN. Among other things, this report assesses the extent to which the Air Force has addressed any challenges in implementing AFFORGEN, and the Air Force's efforts to implement AFFORGEN align with selected leading agency reform practices. GAO analyzed Air Force documentation; interviewed Department of Defense and Air Force officials; and visited selected major commands and units to identify any challenges in implementing AFFORGEN.

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