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Bush's Budget Targets EPA With $450 Million Cut
E&E Daily

Darren Samuelsohn, E&E Daily senior reporter

President Bush wants to reduce the U.S. EPA's annual budget by $450 million under the agency's proposed $7.57 billion spending plan released yesterday.

Atop the cutting board is the Clean Water State Revolving Loan Fund (CWSRF), one of the agency's most expensive programs. The program, aimed at improving wastewater treatment plants, would see the federal share of its funding fall from just over $1 billion to $730 million under Bush's proposal.

Lawmakers last year reluctantly granted Bush's last recommendation to reduce funding for the popular program, and the administration appears intent on following up with further cuts this year. In defense of the proposed $361 million cut, EPA's top water official, Ben Grumbles, said the federal-state matching loan program is sustainable at the proposed level.

"There's no question there are hard choices in putting together a budget," Grumbles said, noting that a host of other EPA programs in Bush's budget are aimed at improving water quality, including regional efforts on the Chesapeake Bay and Great Lakes.

Big picture, acting EPA Administrator Stephen Johnson said there was little difference between Bush's overall $7.57 billion spending plan for the agency when compared with its $8.02 billion enacted level from Congress for FY '05. The 5.6 percent cut is not so significant, Johnson said, if one considers the Bush budget removes some $500 million in lawmaker-written earmarks added during the appropriations process. "The budgets are pretty close" when the earmarks are taken out, he said.

Congress historically has reacted in unpleasant fashion to such justification for budget cuts. At past hearings with top EPA officials, lawmakers have argued quite forcefully that they know best what funds are needed for water projects in their districts. And time and again, that displeasure has evolved into the restoration of most of the administration's recommended reductions.

But this year may be different. Bush is pressing for fiscal discipline in the wake of a $421 billion federal deficit, and a handful of GOP leaders are showing an interest in following suit. House Majority Leader Tom DeLay (R-Texas) has argued that one of his reasons for the behind-the-scenes charge to shake up the appropriations process -- which involves moving EPA and many other environmental agencies into one spending bill -- is aimed at making it easier for Republicans to push their priorities into the budget process. "It has a lot of meaning," he said last week after Bush's State of the Union address. "And it's a very strong signal to our base."

Supporters of increased funding for water infrastructure countered yesterday that a tight fiscal climate is not a sufficient reason to cut the federal share of the revolving loan fund. Wesley Warren, a budget expert at the Natural Resources Defense Council, noted the $388 billion gap in funding for water infrastructure needs over the next 20 years that have been documented in recent EPA, Congressional Budget Office and Government Accountability Office reports.

"We expected it to be bad, and yet it was even worse," said Warren of the water cuts, and the EPA budget in general.

The Water Infrastructure Network, which includes local elected officials, wastewater service providers and labor unions, also criticized the Bush budget cuts. The wastewater levels were "untenable" on both a short- and long-term basis, WIN spokeswoman Lee Garrigan said in a prepared statement.

Overall, the Bush administration made it a point in yesterday's budget rollout to tackle what it sees as poor government management by eliminating or cutting some 150 existing programs. At EPA, that White House directive focused on the earmarks and the water loan program, as well as a $20 million grant program to train wastewater operators and a reduction from $40 million to $15 million in the Alaska Native Villages drinking water and wastewater program.

Elsewhere, the EPA budget sees status quo funding, or modest gains, from previous years. The agency's Drinking Water State Revolving Loan Fund would sit at roughly the same $850 million level that it has been at in recent years. Same goes for EPA accounts for the inspector general office ($37 million request), Leaking Underground Storage Tanks fund ($73 million), and oil spill response program ($16 million).

EPA's Science and Technology account -- which provides funding for a range of studies, including the health and environmental effects of air pollution, drinking water quality and global climate change -- would increase slightly to $761 million under the Bush budget. In FY '05, Congress rejected a Bush request to fund the EPA science account at $689 million, instead funding it at $744 million.

Cleanup programs under EPA's Superfund and brownfield programs would see slight increases compared to FY '05 enacted levels. Superfund would go up by about $30 million to $1.28 billion, with the bulk of those funds geared toward cleanup of some of the nation's largest and most complex sites. Brownfields funding also heads up under Bush's budget by some $47 million, to $210 million.

The EPA's Environmental Programs and Management account, among the largest within the agency's budget, would see a slight increase in FY '06 under Bush's request. The EPM account would go from $2.29 billion to $2.35 billion, with increases felt in programs that deal with regional watersheds and homeland security.

New items tacked into EPA's budget include a request for $44 million to start the "Water Sentinel" program, a pilot project to help select cities conduct monitoring and surveillance of their drinking water systems. In all, the Bush budget seeks $185 million for homeland security-related EPA functions.

This year marks the first where Bush has recommended a lower EPA budget compared to the previous administration request. Bush in FY '05 called on lawmakers to fund EPA at $7.76 billion. Every year prior to that, Bush budget requests had been incrementally smaller: $7.63 billion in FY '04, $7.62 billion in FY '03 and $7.32 billion in FY '02. Former President Clinton sought $7.26 billion for EPA during his last year in office.

To date, every Bush budget request has been met on Capitol Hill with a successful push by lawmakers for even greater funds. Congress last year cut EPA funding for the first time in recent memory, slicing the agency from $8.27 billion in FY '04 to $8.02 billion. EPA received $8.13 billion in FY '03, $7.9 billion in FY '02 and $7.84 billion in FY '01.

The EPA budget will receive its first formal examination from lawmakers tomorrow, when Johnson testifies before the Senate Environment and Public Works Committee.



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