Members of Congress have redirected roughly $2.3 billion in federal water funds toward political pet projects over the past two years, cutting at times into the money that could have been made available for poorer, needier communities.
States lose federal water funds as lawmakers redirect money to pet projects
Democrats and Republicans alike increasingly have redirected money to their states and districts using a legislative tool known as earmarks — a practice that, combined with newly proposed GOP spending cuts, could decimate states
By Tony Romm
July 24, 2023 at 6:00 a.m. EDT
The problem is expected to worsen in the coming fiscal year, as House Republicans eye a $1.7 billion cut to the overall funding that Washington sends states for their water needs. That could complicate a new national push to replace lead pipes, repair wastewater facilities and improve other aging infrastructure — an urgent task at a moment when the United States is grappling with extreme heat and other consequences of a fast-warming planet.
Every year, Congress appropriates money for two key federal water funds that are overseen by the Environmental Protection Agency, which then distributes grants to states. Since 2022, the federal allocation has totaled roughly $5.5 billion, amounting to a literal and figurative drop in the bucket for a nation with an estimated $625 billion backlog in projects just to provide cleaner, reliable drinking water.
Before states receive any money, however, members of Congress can skim off the top of the funds. Using a legislative tool known as earmarks, lawmakers can reserve federal water aid for specific projects in their home communities. Only after that does Washington divvy up and distribute a smaller pool of remaining cash among the states. In some parts of the country, the result of that congressional meddling is a net cut in funding — creating, in effect, a system of water winners and losers.
In Illinois, for example, earmarks last year shortchanged the state $14.7 million in federal aid to improve clean water systems, according to state data and records compiled by the Council of Infrastructure Financing Authorities, known as CIFA, which represents local officials. Illinois has some of the greatest water needs in the country, including the second-most lead pipes in the United States, a recent federal analysis shows.
The flood of congressional requests also siphoned away critical water money from Puerto Rico, even as the U.S. territory continued to rebuild from the devastation of Hurricane Fiona in 2022. Over the past two fiscal years, Puerto Rico received roughly $26.6 million less than it would have without earmarks, according to CIFA data shared with The Post. The territory — whose officials did not respond to a request for comment — does not have voting representation in Congress.
For now, most states and territories have still been able to finance their water projects, thanks to a bipartisan 2021 infrastructure law that greatly increased federal water spending for five years. Eventually, though, that money will run out — leaving local officials with fewer federal dollars to address infrastructure needs.
The fiscal situation could worsen more rapidly under a bill advanced by House Republicans last week: The measure would slash federal water spending by more than half and reserve nearly every dollar remaining for earmarks — creating a combination of fiscal constraints next year that state officials have described as devastating.
States “are worried about this trend, the direction that it’s going,” said Gary Bingenheimer, a top official at the Illinois Environmental Protection Agency. “But if it continues, and our grants continue to be reduced, and the bipartisan infrastructure law money ends, then what do we do?”
For many Americans, the nation’s water needs are laid bare in its harrowing past tales of failures — from the lead contamination that long has plagued Flint, Mich., to the recent images of brown liquid flowing from spigots in cities such as Jackson, Miss. The stories share a theme of persistent neglect, exacerbated in a country that only recently has grappled with economic shortcomings that trace along lines of race and class.
After decades of underinvestment, Congress in 2021 offered a massive financial reprieve: Democrats and Republicans approved roughly $55 billion to improve water access, supply and treatment as part of a sprawling infrastructure package signed into law by President Biden. The measure channeled most of that money through two federal programs that annually write checks to states — one focused on drinking water, the other focused on clean water, which includes wastewater systems.
Yet the burst of one-time funding — on top of other state and federal spending — still fell far short of the country’s estimated needs. The infrastructure law included about $15 billion specifically to replace lead pipes, for example, though analyses from groups including the Brookings Institution suggest it could cost three times as much to solve the problem.
“There continues to be a huge gap between the funding and the need,” said Jeffrey Diehl, chief executive of the Rhode Island Infrastructure Bank.
The result is a vast and growing water spending gap, one that has created a yearly competition among lawmakers for still-scarce funds.
Since 2022, California has reaped a windfall in federal water spending: The state’s two Democratic senators — Dianne Feinstein and Alex Padilla — last year helped secure more than $32 million in water-related earmarks, according to a Post analysis of spending data. In total, those and other earmarks helped the state obtain roughly $43 million more than it would have if lawmakers had not intervened last year, an analysis from CIFA shows.
Diana Marin, a spokeswoman for Padilla, said in a statement that the earmarks reflected the senator’s ongoing work “to address decades of underinvestment and the needs of the 40 million Californians he represents — including nearly one million who are without access to safe drinking water.”
The same dynamic played out in Alaska, which saw a roughly $73 million boost to its water funding over the past two years thanks to the combination of direct federal funding and congressional earmarks. Most of the increase was attributable to earmarks sponsored by Republican Sen. Lisa Murkowski, a veteran lawmaker who serves as a top appropriator in the chamber, according to spending records.
In an interview, Murkowski said she had labored “aggressively” to secure that money because Alaska has had “significant unmet needs for decades now, and didn’t receive the resources” under the formula that normally awards water aid.
“Some would look at last year’s accounts for Alaska and say, ‘That’s rather eye-popping; it seems out of line given Alaska’s population,’” she said. “But what far too many people fail to recognize in my state [is] we’re not repairing existing infrastructure, we’re not replacing, we’re putting in water and sanitation for the first time.”
Nationally, lawmakers secured more than $1.4 billion in clean water and drinking water earmarks in the most recent fiscal year, nearly double the amount in 2022. But for every state that saw significant funding gains, others experienced surprising losses.
In Colorado, the first sign of trouble surfaced in 2022: Keith McLaughlin, executive director of the Colorado Water Resources and Power Development Authority, said he “came close to running out of loan money” to fund projects. In that first year Congress allowed earmarks, the state’s delegation did not take home enough aid to make up for what Colorado lost to other states, putting local officials in a place where “we almost had more requests than we had dollars available,” according to McLaughlin.
The state’s shortfall ultimately totaled about $20 million, he said. While its immediate effects may have been blunted by one-time aid under the infrastructure law, McLaughlin added that Colorado could be in dire financial straits if the trend continues at its current pace.
“There are more projects than we can fund,” he said. “We’re within a year or two of running out of loan funds. That is an issue.”
Over the past two fiscal years, Pennsylvania similarly received about $36 million less than it would have received if lawmakers had not allowed earmarks. For Indiana, the cut totaled roughly $45 million; in Texas, the reduction exceeded $65 million. Each of the states declined or did not respond to requests for comment.
For some states, though, the headaches have been more than financial in nature: The congressional earmarks appear to benefit wealthy communities over needier ones, raising the specter that the process could be worsening the country’s racial and economic divides.
In states such as Maryland, Massachusetts and Virginia, fewer than 20 percent of congressional water earmarks in the 2023 fiscal year went to communities that are considered disadvantaged, according to an analysis circulated within the Biden administration and later obtained by The Post. Members of Congress decided where to send those dollars, not state officials, who might have directed them to areas in greater need.
The unpublished federal study aimed to explore whether earmarks had comported with an executive order signed by Biden in 2021 that aims to deliver 40 percent of all federal benefit programs to cities and towns in greatest need. In total, it found that earmarks in 18 states last year failed to meet that benchmark, depriving disadvantaged communities of an estimated $79 million in water aid.
The White House goal does not apply to the money authorized by Congress. Many states also set their own definition for what qualifies as “disadvantaged,” marking a break with the Biden administration’s view. Still, experts said the finding illustrates the unintended consequences of the earmarking practice, which removes the decision from the hands of state leaders or federal agencies.
“The earmarks basically are taking the money away from low-income communities that really need the funding most to fix their drinking water — and putting it into wealthier communities, that often are White communities, that don’t need the money as much,” said Erik Olson, the senior strategic director for health and food at the Natural Resources Defense Council.
The EPA declined multiple requests for comment.
The congressional earmarks also took the form of grants, even though states typically provide such money in the form of loans, offering exceptions for the neediest applicants. That, in effect, allowed wealthier communities to receive support under better financial terms than they otherwise would have, according to Timothy Male, executive director of the Environmental Policy Innovation Center.
Raising the issue in a March letter to the Biden administration, Male estimated that 200 congressional earmarks in 2023 aided communities “wealthier than the statewide average income.” Those cities and towns, according to EPIC, “would have been eligible for loans, but not grants,” if Congress had not interfered.
The beneficiaries included the city of Bellaire, Tex., just outside Houston, which scored $2.4 million to replace its water lines last year. With an average household income exceeding $200,000 annually, Bellaire normally might have had to take a loan. Instead, it received a federal grant, thanks to Democratic Rep. Lizzie Fletcher.
Clarissa Robles, a spokeswoman for Fletcher, said in a statement that it is “important to our constituents to have the ability to advocate for their needs and receive funds directly.”
In an interview, Male noted that such earmarks are legal. “It may be unfair, but it’s an elected representative’s prerogative,” he said, adding: “Millions of dollars are going to communities that are very, very wealthy.”
Entering the coming fiscal year, earmarks are expected to surge again: Lawmakers this spring requested more money than is likely to be available in the program. A key water-related spending bill in the GOP-controlled House would earmark about 88 percent of these funds in 2024, while slashing overall spending by $1.7 billion. The Senate plans to consider its own legislation this week.
At an early hearing on the bill, House Democrats lambasted the GOP approach, arguing that cuts could damage work nationally to upgrade the country’s infrastructure and respond to climate change.
“These are not numbers on a page,” said Rep. Rosa L. DeLauro (Conn.), the top Democrat on the House Appropriations Committee. “These are basic life necessities that we have a simple obligation to protect for the American people.”
Republican aides say the cuts won’t be damaging, because the 2021 infrastructure law still provides states with additional water funding. If the bill becomes law, though, CIFA predicts that 43 states would each receive less than $1 million in drinking water aid to use as they see fit — a staggering drop some states say they can’t afford.
In Colorado, McLaughlin offered an ominous warning as he expressed dismay with the expected uptick in earmarks and the potential cut in spending.
“We’re really close to having to make some tough decisions on projects,” he said, “and tell people no.”
