Water Infrastructure Project Earmarks in EPA Appropriations: Trends and Policy Implications

Publication Date: December 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Environment

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Abstract:

The use of earmarks in appropriations legislation, defined here as funds set aside within an account for specified projects or locations, has been increasing in recent years as a way to help designated communities meet needs to build and upgrade water infrastructure systems, whose estimated future funding needs exceed $300 billion. This report discusses appropriations for water infrastructure programs of the Environmental Protection Agency (EPA), focusing on congressional earmarks in the account that funds these programs. Information on the programmatic history of EPA involvement in assisting wastewater treatment and drinking water projects is provided in two appendixes.

Congressional appropriators began the practice of supplementing appropriations for the primary Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) assistance programs with earmarks for individually designated projects in FY1989. Since then, of the $40.8 billion appropriated to EPA for water infrastructure assistance, 16% ($6.5 billion) has gone to earmarked project grants. Notably since FY2000, appropriators have awarded earmarks to a larger total number of projects, resulting in more communities receiving such assistance, but at the same time receiving smaller amounts of funds, on average.

Members of Congress may intervene to provide funding for a specific community for a number of reasons. In some cases the community may have been unsuccessful in getting state approval to fund the project under other programs. Some, especially small and rural communities, seek a grant because the cost of a project financed through a state loan which must be fully repaid is deemed unacceptably high (loans are the primary assistance under the CWA and SDWA). However, the practice of earmarking has been criticized by state water program managers and administrators of infrastructure financing programs because designated projects are receiving more favorable treatment (55% federal grants, rather than loans) and because the practice sidesteps the standard process of states' determining the priority by which projects will receive funding. Earmarked projects also have generally not been reviewed by congressional authorizing committees.

Attention is often drawn to the relatively few projects that have received large earmarks (more than $100 million), especially over multiple years. The majority of designated projects, however, receives comparatively small earmark amounts. More than 75% of the projects earmarked in the EPA appropriations legislation have received total awards (either in a single year or over multiple years) of $2 million or less. While some Members of Congress, interest groups, and Administration officials are critical of including earmarks in this and other appropriations acts, it is likely that communities will continue to seek this type of assistance, and there is little indication that the practice will change soon. This report will be updated as events warrant.