Water Infrastructure Needs and Investment:Review and Analysis of Key Issues
Summary
Policymakers are giving increased attention to issues associated with financingand investing in the nation’s drinking water and wastewater treatment systems, whichtake in water, treat it, and distribute it to households and other customers, and latercollect, treat, and discharge water after use. The renewed attention is due to acombination of factors. These include financial impacts on communities of meetingexisting and anticipated regulatory requirements, the need to repair and replaceexisting infrastructure, and concerns about paying for security-related projects.The federal government has a long history of involvement with wastewater anddrinking water systems, with the Environmental Protection Agency (EPA) having themost significant role, both in terms of regulation and funding. The U.S. Departmentof Agriculture also plays an important role in rural communities through its water andwastewater loan and grant programs. These programs have been popular; however,states, local communities, and others have asserted that various program gaps andlimitations may be diminishing their potential effectiveness. They also point to theemergence of new infrastructure needs and issues.A number of interest groups and coalitions have issued reports on infrastructurefunding needs and related policy issues, as have EPA and the Congressional BudgetOffice (CBO). They present a range of estimates and scenarios of future investmentcosts and gaps between current spending and future costs. EPA and CBO, inparticular, caution that projections of future costs are highly uncertain, and thatfunding gaps are not inevitable. Increased investment, sought by many stakeholders,is one way to shrink the spending gaps, but so, too, are other strategies such as assetmanagement, more efficient pricing, and better technology.Congressional interest in these issues has grown for some time and is continuingin the 110
th
Congress. In each of the past three Congresses, House and Senatecommittees acted on legislation to reauthorize and modify infrastructure financingprograms in the Clean Water Act and Safe Drinking Water Act, but no bills wereenacted. The Bush Administration has addressed water infrastructure in a numberof general ways, but has not offered legislative proposals of its own. EPA’s principalinitiative has been to support strategies intended to ensure that infrastructureinvestment needs are met in an efficient, timely, and equitable manner.This report identifies a number of issues that have received attention inconnection with water infrastructure investment. It begins with a review of federalinvolvement, describes the debate about needs, and then examines key issues,including what is the nature of the problems to be solved; who will pay, and what isthe federal role; and questions about mechanisms for delivering federal support,including state-by-state allotment of federal funds. Congressional and Administrationactivity on these issues from the 107
th
to the 109
th
Congresses also is reviewed.
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