United States Capitol Building Summer 2024

Last Word – Election Provides Opportunities, Presents Challenges for Utility Construction

Wyman

When the Infrastructure Investment and Job Creation Act (IIJA) – also known as the Bipartisan Infrastructure Law (BIL) – was enacted during the COVID-19 pandemic, funding for water and wastewater infrastructure improvements was lacking, to say the least.

The IIJA provided some $55 billion for water and wastewater infrastructure improvements, and although this funding is sorely needed, these programs continue to be targeted for funding cuts.

IIJA provided $55 billion in federal funding to improve water and wastewater infrastructure. A significant portion of this funding was allocated to the Environmental Protection Agency’s (EPA) Clean Water State Revolving Fund (CW SRF) and the Safe Drinking Water State Revolving Fund (DW SRF) programs.

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The IIJA Provided

  • $11.7 billion over five years to the DW SRF program (including an earmarked amount for projects addressing emerging contaminants (e.g. PFAS) and lead service line replacement.
  • $11.7 billion over five years to the CWSRF program (including funding for wastewater treatment upgrades, stormwater management, and projects to address “nonpoint source” pollution.
  • Funding for Emerging Contaminants (additional $4 billion was set aside to address emerging contaminants like PFAS in drinking water through the DW SRF.

Since IIJA was enacted, the SRF programs have been under scrutiny, with either direct cuts to clean water funding or “redirecting” SRF dollars to “Congressionally Directed Spending,” otherwise known as “earmarked” projects that lawmakers take credit for and campaign on. While there is nothing wrong with earmarks, many associations supporting water and sewer infrastructure programs don’t support the redirection of programmatic EPA/SRF funding to earmarked projects.

One Party Control Can be Complicated

On Nov. 5, Donald Trump was elected America’s 47th president, after what is considered one of the biggest political comebacks in recent history. In addition, Republicans won control of the Senate, flipping four seats and will enjoy a 53-47 majority come January 2025. In what was surprising to many, House Republicans will take a 220-215 majority in the 119th Congress.

Among the notable changes in leadership on the Republican side are Sen. John Thune (R-SD) will be taking over as Senate Leader from Mitch McConnell (R-KY), who is stepping down after a record 18 years in the position. Sen. John Barrasso (R-WY) was elected Majority Whip without opposition. Meanwhile, the dynamic on the side of Senate Democrats won’t change much. Sen. Chuck Schumer (D-NY) is expected to remain Democratic Leader, and Sen. Richard Durbin (D-Ill.) will continue his role as Democratic Whip in the Senate.

While 2025 and the focus on the 119th Congress will be on tax reform issues, infrastructure advocates will have to stay vigilant, especially on the water/sewer infrastructure side of things.

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Republican control will likely mean good things for business in general, but the construction industry needs to ensure that Congress does not cut funding for water and sewer systems at a time when they should be increasing it.

In FY 2022, the ban on earmarks was lifted, allowing Members of Congress to use SRF funds to finance earmarked projects, which allows for SRF dollars to be allocated directly to the communities as grants, which didn’t sit well with many water infrastructure advocates.

In July 2024, an ad hoc coalition of construction contractors, engineers, manufacturers and other service providers banded together to push back on any redirection of programmatic SRF funding.

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Letter to Congress

In a letter to House and Senate appropriators, these groups expressed strong concerns with the redirecting of SRF funds to congressional earmarks.

According to these groups:

“the nation’s water and wastewater infrastructure has suffered from chronic underinvestment over the past several decades, resulting in an increasing funding gap. While recent investments from the Infrastructure Investment and Jobs Act have the ability to shrink this funding gap, the [redirecting of SRF dollars] process could exacerbate the problems facing federal water infrastructure financing programs. If broader SRF resources are regularly allocated to CDA/CPF, states will again experience significant shortfalls in funding water and wastewater infrastructure projects.

Therefore, as you begin to develop the FY 2025 Interior, Environment, and Related Agencies Appropriations bill, we urge your committees to:

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  • Increase funding for the SRF programs to account for funds allocated to CDS/CPF; and
  • Provide a sustainable funding source for specific critical water projects through the CDS/CPF process in a way that does not tap into funds from projects that rely on SRF financing.”

The letter was sent by the American Council of Engineering Companies; American Society of Civil Engineers; Associated Equipment Distributors; Distribution Contractors Association; National Stone, Sand and Gravel Association; Pennsylvania Utility Contractors Association; Pipeline Open Data Standard Association; Plastics Pipe Institute; and United Association of Union Plumbers and Pipefitters.

Bring on the 119th Congress

The 2024 elections will certainly present an emboldened Republican majority in Washington, D.C., and while this can mean a lot of good things for American business, industries that have been pushing for increased federal investment in infrastructure need to stay off the sidelines and make sure our government meets its commitment to refurbishing America’s environmental infrastructure.

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Eben M. Wyman is a principal at Wyman Associates, a government relations firm located in Washington, D.C.

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  • Patrick
    February 6, 2025 13:52:26

    I read your articles for information, not politics. If you continue to inject politics in your articles, you will get a hardy unsubscribe

    Reply