Search Penny Hill Press

Tuesday, January 4, 2011

Water Infrastructure Needs and Investment: Review and Analysis of Key Issues

Claudia Copeland
Specialist in Resources and Environmental Policy

Mary Tiemann
Specialist in Environmental Policy

Policymakers are giving increased attention to issues associated with financing and investing in the nation’s drinking water and wastewater treatment systems, which take in water, treat it, and distribute it to households and other customers, and later collect, treat, and discharge water after use. The renewed attention is due to a combination of factors. These include financial impacts on communities of meeting existing and anticipated regulatory requirements, the need to repair and replace existing infrastructure, concerns about paying for security-related projects, and proposals to stimulate U.S. economic activity by building and rebuilding the nation’s infrastructure.

The federal government has a long history of involvement with wastewater and drinking water systems, with the Environmental Protection Agency (EPA) having the most significant role, both in terms of regulation and funding. The U.S. Department of Agriculture also plays an important role in rural communities through its water and wastewater loan and grant programs. These programs have been popular; however, states, local communities, and others have asserted that various program gaps and limitations may be diminishing their potential effectiveness. They also point to the emergence of new infrastructure needs and issues.

A number of interest groups and coalitions have issued reports on infrastructure funding needs and related policy issues, as have EPA and the Congressional Budget Office (CBO). They present a range of estimates and scenarios of future investment costs and gaps between current spending and future costs. EPA and CBO, in particular, caution that projections of future costs are highly uncertain, and that funding 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 asset management, more efficient pricing, and better technology.

Congressional interest in these issues has grown for some. In each Congress since the 107
th, House and Senate committees acted on legislation to reauthorize and modify infrastructure financing programs in the Clean Water Act and Safe Drinking Water Act, but no bills were enacted. The Bush Administration addressed water infrastructure in a number of general ways, but did not offer legislative proposals of its own. EPA’s principal initiative has been to support strategies intended to ensure that infrastructure investment needs are met in an efficient, timely, and equitable manner. The Obama Administration has focused attention on providing increased federal budgetary resources for water infrastructure investments and is developing a water infrastructure sustainability policy.

This report identifies a number of issues that continue to receive attention in connection with water infrastructure investment. It begins with a review of federal involvement; 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 is the federal role, and questions about mechanisms for delivering federal support. Congressional and Administration activity on these issues since the 107
th Congress also is reviewed. (For detailed information on legislative activity in the 111th Congress, see CRS Report R40098, Water Quality Issues in the 111th Congress: Oversight and Implementation, and CRS Report RS22037, Drinking Water State Revolving Fund (DWSRF): Program Overview and Issues.) .

Date of Report: December 21, 2010
Number of Pages: 40
Order Number: RL31116
Price: $29.95

Follow us on TWITTER at or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail
Penny Hill Press  or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.