In an apparent attempt to derail a constitutional challenge to a requirement that all grantees in an HIV/AIDS prevention program adopt formal policies against sex trafficking, the United States Agency for International Development (USAID) and the Department of Health and Human Services (HHS) have issued guidelines for grantees that allow affiliations with groups that do not adopt such pledges. The guidelines, issued July 23, are even more restrictive than similar requirements for legal services programs that are also the subject of a constitutional challenge. They require separate "management and governance" and complete physical separation "between an affiliate which expresses views on prostitution and sex-trafficking contrary to the government's message…" and the grantee. Four leaders in the House have written to USAID urging it to adopt the less restrictive standards that allow faith-based organizations to keep religious and government funded activity separate in time and place without the need for a separate affiliate. Although the guidance is already effective, HHS intends to publish the rule for public comment.

Congress's tax-writing committees have focused increasing attention this summer on a hitherto little-noticed tax preference enjoyed by private equity and other fund managers that allows them to pay capital gains rates (15 percent) on "carried interest" income they are paid to manage investment funds they do not own. This is significantly lower than the income tax rate that would otherwise be assessed, which could be as high as 35 percent. As Congress moves to take action to close this loophole, nonprofit advocacy groups are mobilizing to support a fix to this unfair aspect of the tax code.

The Government Accountability Office (GAO) has released a new report on the process by which federal regulatory agencies review regulations after they take effect. Agencies conduct reviews to comply with existing law, as a matter of agency policy, and in response to White House requests. The report finds the quality of reviews varies widely and determines the major barriers to more useful reviews are gaps in available data and problems with public participation.

The Aug. 6 mine collapse at the Crandall Canyon coal mine in Utah, which trapped six coal miners and led to the deaths of three rescue workers, again calls into question the effectiveness of the federal Mine Safety and Health Administration (MSHA). The mine operators were working under a plan approved by MSHA in June, just months after serious structural problems forced the operators to abandon a work area only 900 feet from where the miners are trapped.