March 12, 2002

Analysis prepared by Democratic Staff, Committee on Energy and Commerce

The President’s Budget for the Environmental Protection Agency (EPA) would reduce spending by $300 million from the enacted level of $8 billion in FY 2002 to $7.71 billion in FY 2003. In many areas, such as water grants for the Drinking Water State Revolving Funds and funding to clean up contamination from leaking underground storage tanks, the budget fails to address significant unmet needs. Under this budget, fewer Superfund sites will be cleaned up. Especially hard hit will be the Federal civil enforcement program that will have about 200 fewer authorized enforcement personnel than were authorized in FY 2001 and a $3.5 million reduction for experts and consultants from the FY 2001 levels. As a result, according to the budget justification, 1,500 fewer inspections will be conducted in FY 2003 to detect violations of our clean air, clean water, and hazardous waste laws. If, as expected, tens or hundreds of millions of dollars in earmarks are added during the appropriations process without increasing overall spending, then EPA’s core programs will sustain further cuts.

Safe Drinking Water Act

(dollars in millions)

The President’s budget plan fails to meet the needs for safe drinking water across the country.

Public water systems must invest in infrastructure improvements to ensure that they can deliver safe drinking water to consumers. In February 2001, the EPA released the results of a comprehensive survey of our Nation’s infrastructure needs. The key finding of the survey is that "$102.5 billion is needed now to ensure the continued provision of safe drinking water." The EPA budget justification for FY 2003 explicitly recognizes the large gap between the budget request and the needs of our public water systems as follows:

"According to the Agency’s 2001 Drinking Water Infrastructure Needs Survey, the total 20-year national infrastructure need is $150.9 billion, $31.2 billion of which is needed to ensure the provision of safe drinking water under existing and recently proposed regulations. This need is even more pressing in the face of the projected increases in population growth and the subsequent increase in demand for safe drinking water over the next several decades."

This compares to the $850 million budgeted by the Bush Administration for the drinking water state revolving loan fund. Local governments, states, drinking water suppliers, and the EPA all agree that there is a tremendous resource gap – which will continue to grow – for drinking water infrastructure funding necessary to protect the public health. The Bush budget freezes this important program with no adjustment for inflation at a level that is $150 million less than the amount authorized by Congress.

Based on staff interviews, it appears that the important standard setting activities for drinking water contaminants, source water protection activities, and implementation of the drinking water program will have approximately $6 million less in funding for grants and contracts than the FY 2001 operating plan.

Leaking Underground Storage Tank Program

(dollars in millions)

The Bush budget seriously fails to meet the need to clean up petroleum releases from abandoned gas stations, groundwater contaminated by MTBE, and other petroleum releases from leaking underground storage tanks.

The Leaking Underground Storage Tank (LUST) Trust Fund was created by Congress in 1986 and is financed by a 0.1 cent a gallon tax on motor fuels. The LUST Trust Fund was specifically created to address contamination from leaking underground storage tanks at gas stations and other facilities. These tanks are often the source of MTBE and petroleum contamination in groundwater and it is estimated that over 200,000 old gas stations are brownfields sites. The budget acknowledges that there is a "backlog of Underground Storage Tank sites with confirmed releases waiting to be addressed." Nationwide there are an estimated 150,000 releases with more confirmed each year. In FY 2001, the EPA failed to meet its goal of 21,000 LUST cleanups nationwide, falling short by 1,924 cleanups. This program is also responsible for enforcing the 1998 Underground Storage Tank leak detection and upgrade standard.

Currently, there is a surplus of $1.9 billion in the Trust Fund which is expected to grow under the Bush budget to $2.14 billion at the end of FY 2003. Nevertheless, the Bush budget reduces funding for this program. The amount being requested in the budget is less than five percent of the amount currently in the LUST Trust Fund. More money is now being collected from interest on the LUST Trust Fund than is being requested to be appropriated by the President’s budget. As a result, large numbers of abandoned gas stations with petroleum releases and sites with groundwater contamination from MTBE and other petroleum products across the country will not be cleaned up.

Superfund

(dollars in millions)

For the past four years of the Clinton Administration, the Superfund program has completed all construction activities at an average of 87 sites per year. The Bush FY 2002 and FY 2003 budgets called this "dramatic progress." In FY 2001, however, the Bush Administration completed construction at only 47 sites -- a 46% reduction from the average in the last four years of the Clinton Administration and a 39% shortfall in the Agency’s goal for FY 2001.

The slowdown of Superfund cleanups will continue under the Bush budget, because it has reduced the FY 2002 budget projection of 65 construction completions in FY 2002 to 40 and also estimated 40 construction completions in FY 2003. On May 10, 2001, Administrator Whitman stated that the EPA had a goal of reaching 900 construction completions by the end of FY 2002 and estimated "that the Agency will achieve construction completions at 897 NPL sites by the end of FY 2002." Unfortunately, the FY 2003 budget indicates that cumulative construction completions by the end of FY 2002 will only reach 844 -- a shortfall of more than 50.

Under the polluter-pays principle, Congress imposed taxes on industry, including the petroleum and chemical industries, to provide revenues to the Superfund Trust Fund to cleanup toxic waste sites. Each year since 1995, when the Republican-led Congress allowed the Superfund taxes to expire, President Clinton and the EPA sought to have the taxes reauthorized. However, President Bush’s budget does not propose reauthorization of the Superfund taxes. Since 1995, industry taxpayers have saved over $8 billion due to the expiration of the Superfund taxes, or approximately $4 million per day. Thus, the burden to fund cleanups is increasingly being shifted to the general public. In the President’s FY 2003 budget, $700 million -- more than one-half of all Superfund expenditures -- will come from general revenues. At the end of FY 2003 the Superfund Trust Fund is estimated to contain only $28 million.

Brownfields

(dollars in millions)

The Small Business Liability Relief and Brownfields Revitalization Act signed into law on January 11, 2002, authorized funding in the amount of $200 million for brownfields grants for site assessment, remediation, and revolving loan funds. The eligible recipients of these grants are:

1. Local governments
2. Land clearance authority operating under supervision and control of local government
3. Government entity created by state legislature
4. Regional councils or group of general purpose units of local government
5. Redevelopment agency sanctioned by a state
6. States
7. Indian tribes
8. Alaska Native Regional Corporation
9. Non-profit organizations for remediation grants

Brownfields are abandoned, idled, or underused industrial and commercial properties and are not traditional Superfund sites. Economic changes over several decades have left thousands of communities with these contaminated properties and abandoned sites. According to the EPA budget justification "this program has experienced tremendous growth in applications for new and supplemental pilots, averaging 198 applications per year."

In addition the new legislation authorizes $50 million annually for states and Indian Tribes to establish or enhance their response programs. The states and tribes can also use the money to capitalize revolving loan funds or purchase insurance or develop a risk sharing pool. The President’s budget fully funds the state and tribal grants at the authorized level of $50 million.

Inspections:

Overall, the Bush Administration’s FY 2003 budget slashes the authorization for civil enforcement personnel by about 200 full-time equivalents (FTE’s) from the enacted levels in the FY 2001 operating plan. In addition, cuts approximating $2.2 million have been made since the FY 2001 operating plan in contract funding to support the civil enforcement program.

The Administration budget says that funding in the amount of $15 million will be shifted to state enforcement programs, but there is no requirement that the states use increased federal resources for actual enforcement or report on their results. In addition, nothing requires the states to maintain their current enforcement funding and personnel levels to insure that the $15 million in grants to the states will result in overall increased state enforcement.

Prepared by the Democratic staff of the Committee on Energy and Commerce
2322 Rayburn House Office Building, Washington, DC 20515
Select Feedback to let us know what you think.

Back to the Energy and Commerce Committee Democrats Home Page