Given the dramatic rise in prison populations and resulting overcrowding as well as the high cost of providing the requisite facilities, the U.S. Congress must consider cost-effective options for dealing with offenders. Some options are the expansion of corrections privatization to prison construction and the daily operations and management of prisons, the use of 'mothballed' naval vessels as prison facilities, and a national system of user fees for those convicted of misdemeanor and felony offenses. The removal of Federal prohibitions on the sale of goods produced in prison industries could help alleviate prison costs. Sentencing reform should focus on a reduction of jail and prison time served for nonviolent offenders. Another option is to change the current Federal law to encourage restitution as the primary penalty for certain offenses. Short-term demonstration grant money might be provided to expand current house-arrest pilot programs.