Wastewater Infrastructure Funding: Background and Affordability Issues
Congressional research reportJun 10, 2025
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Wastewater Infrastructure Funding:
Background and Affordability Issues
June 10, 2025
Congressional Research Service
https://crsreports.congress.gov
R48565
SUMMARY
Wastewater Infrastructure Funding:
Background and Affordability Issues
The condition of wastewater infrastructure and the financial and technical challenges some
communities face in ensuring adequate infrastructure services continue to generate interest
among Members of Congress and a range of stakeholders. Several events and circumstances have
increased national attention to local wastewater infrastructure, including infrastructure damage
from natural disasters and the nationwide need to repair or replace aging wastewater
infrastructure. In many communities, wastewater infrastructure may require repair or replacement
to maintain levels of service and comply with relevant regulatory requirements.
R48565
June 10, 2025
Jonathan L. Ramseur
Specialist in Environmental
Policy
Approximately 17,500 publicly owned treatment works operate in the United States. They provide wastewater treatment
services for approximately 270 million people (about 80% of the total U.S. population in 2022). The remaining 20% of the
U.S. population primarily relies on decentralized wastewater infrastructure, such as septic tanks.
In the U.S. Environmental Protection Agency’s (EPA’s) 2024 wastewater infrastructure needs assessment, EPA estimated
national wastewater infrastructure needs of $630 billion over 20 years. Estimated needs increased by about 45% between
2016 and 2024.
A 2025 study from the Congressional Budget Office indicates that—since at least the 1950s—state and local governments
have contributed the vast majority of public funding for wastewater infrastructure projects. The study indicates that in 2023,
the state and local share of such spending was 92%, while the federal share was 8%.
The costs of wastewater services have increased across the United States in recent years. EPA states that a number of factors
have played a role in these increased costs: aging infrastructure and deferred maintenance, regulatory requirements, inflation,
and supply chain disruptions. Although Congress has provided increased funding levels in recent years—particularly through
supplemental appropriations—EPA finds that the need for capital infrastructure improvements, as well as operations and
maintenance costs, are challenging for communities to support with “affordable” water rates. As these needs and costs have
increased, water utilities have raised rates, and household bill payments have increased. For example, between 1998 and
2024, household payments for water and sewer increased at roughly twice the rate of the consumer price index.
The 2022 Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) directed EPA to submit a report to Congress regarding
affordability for water infrastructure—which includes both wastewater and drinking water services—and provide
recommendations to address affordability concerns. In its report, EPA estimated that between 12.1 million and 19.2 million
U.S. households (or 9.2% to 14.6%) lack affordable access to these services. EPA provided a number of recommendations,
including the establishment of a permanent federal water assistance program, analogous to the Supplemental Nutrition
Assistance Program and the Low Income Home Energy Assistance Program. EPA estimated the total annual cost of
unaffordable water service bills is between $5.1 billion and $8.8 billion.
Policymakers may consider modifying existing provisions in the Clean Water Act (CWA) to address affordability. Several
options may help achieve this goal. One option would be for Congress to amend the Clean Water State Revolving Fund
(CWSRF), the key federal funding program for wastewater infrastructure. In a 2016 report that examined the CWSRF state
allotment formula, EPA concluded that most states did not receive appropriated funds in proportion to their infrastructure
needs estimates or populations. A 2024 Government Accountability Office report reached similar conclusions.
Another option for Congress to consider is altering the CWSRF additional subsidization provisions to enhance their effect on
affordability. Further, recent appropriations (FY2022, FY2023, and FY2024) have included community project
funding/congressionally directed spending (CPF/CDS), which some refer to as “earmarks.” Although the CPF/CDS funds
support the same types of projects financed by CWSRF programs, their distribution is not subject to the CWA allotment
formula. If Congress continues to provide CPF/CDS funding, Congress could consider requiring that some portion of these
funds be used to address affordability concerns. For example, the appropriations committees could require that Members’
CPF/CDS requests include some percentage of projects that would support lower-income communities.
Congressional Research Service
Wastewater Infrastructure Funding: Background and Affordability Issues
Contents
Introduction ..................................................................................................................................... 1
Wastewater Infrastructure Overview ............................................................................................... 1
Wastewater Infrastructure Needs Estimates .................................................................................... 2
Clean Water State Revolving Fund Program ................................................................................... 4
Eligible Recipients and Eligible Uses ....................................................................................... 5
Financing or Funding Mechanism............................................................................................. 6
History of Wastewater Infrastructure Funding ................................................................................ 6
Community Project Funding/Congressionally Directed Spending ........................................... 9
Additional Subsidization .......................................................................................................... 11
Appropriations Acts ........................................................................................................... 11
CWA Amendments ............................................................................................................ 12
Other EPA Wastewater Funding Programs .................................................................................... 13
Sewer Overflow and Stormwater Grant Program ................................................................... 13
Training and Technical Assistance for Rural, Small, and Tribal Wastewater Systems ........... 14
Water Infrastructure Finance and Innovation Act (WIFIA) Program...................................... 14
Wastewater Infrastructure Affordability Issues ............................................................................. 15
EPA’s 2024 Affordability Report: Highlights .......................................................................... 17
EPA’s 2024 Affordability Report: Recommendations ............................................................. 19
Other Policy Considerations .......................................................................................................... 20
Figures
Figure 1. Comparison of EPA’s Wastewater Infrastructure Needs Estimates .................................. 3
Figure 2. Water Infrastructure Capital Spending, by Level of Government FY1957FY2023 ......................................................................................................................................... 7
Figure 3. EPA Wastewater Infrastructure Appropriations, FY1973-FY2025 .................................. 8
Figure 4. Clean Water State Revolving Fund (CWSRF) Appropriation, FY1989-FY2026 ............ 9
Figure 5. Community Project Funding and Congressionally Directed Spending........................... 11
Figure 6. Use of Additional Subsidization
in Clean Water State Revolving Fund Programs, FY2014-FY2023 .......................................... 13
Figure 7. Household Drinking Water and Sewer Payments Versus Costs of Other Goods
and Services................................................................................................................................ 16
Figure 8. EPA Estimate of Percentage of Household with Unaffordable Water Bills ................... 18
Tables
Table 1. EPA’s Estimated Wastewater Infrastructure Needs by Category in 2016 and 2024 .......... 3
Table 2. Appropriations for Selected Wastewater Infrastructure Programs ................................... 15
Congressional Research Service
Wastewater Infrastructure Funding: Background and Affordability Issues
Contacts
Author Information........................................................................................................................ 22
Congressional Research Service
Wastewater Infrastructure Funding: Background and Affordability Issues
Introduction
The condition of wastewater infrastructure and the financial and technical challenges some
communities face in ensuring adequate infrastructure services continue to generate interest among
Members of Congress and a range of stakeholders. Several events and circumstances have
increased national attention to local wastewater infrastructure, including infrastructure damage
from natural disasters and the nationwide need to repair or replace aging wastewater
infrastructure. In many communities, wastewater infrastructure conditions may require repair or
replacement to maintain levels of service and comply with relevant regulatory requirements.1
This report discusses the wastewater infrastructure programs administered by the U.S.
Environmental Protection Agency (EPA).2 The report focuses on the principal federal funding
program for wastewater infrastructure—the Clean Water State Revolving Fund (CWSRF)
program—and includes information on selected funding and affordability issues involving
wastewater infrastructure.
Wastewater infrastructure issues are often grouped with drinking water infrastructure issues.
These two sets of issues taken together are considered as a broader infrastructure category,
generally described as water infrastructure. Most studies combine wastewater and drinking water
together as water infrastructure and typically assess the two infrastructure categories as a
collective group, without isolating their respective roles or contributions to a particular issue or
concern. For example, EPA’s 2024 report on water affordability (discussed below) includes
estimates of access to water services and water service costs, among other analyses. This report
generally presents these estimates in the context of the broader water infrastructure category.
Thus, although this report focuses on wastewater infrastructure, some information in this report is
presented in the broader context of water infrastructure.
Wastewater Infrastructure Overview
Based on EPA data from 2022, approximately 17,500 publicly owned treatment works operate in
the United States.3 They provide wastewater treatment services for approximately 270 million
people (about 80% of the total U.S. population in 2022).4 The remaining 20% of the U.S.
population relies primarily on decentralized wastewater infrastructure, such as septic tanks.5 U.S.
1 See, for example, Environmental Protection Agency (EPA), 2022 Clean Watersheds Needs Survey—Report to
Congress, 2024, https://www.epa.gov/system/files/documents/2024-05/2022-cwns-report-to-congress.pdf; American
Society of Civil Engineers, 2021 Report Card for America’s Infrastructure, 2021, https://infrastructurereportcard.org/
wp-content/uploads/2020/12/Wastewater-2021.pdf; and American Water Works Association, Buried No Longer:
Confronting America’s Water Infrastructure Challenge, 2012, https://www.awwa.org/wp-content/uploads/Buried-NoLonger.pdf.
2 Other federal programs also support wastewater infrastructure projects, including programs administered by the U.S.
Department of Agriculture, the Department of the Interior, the Department of Housing and Urban Development, and
the Department of Commerce. For information on these programs, see CRS Report R46471, Federally Supported
Projects and Programs for Wastewater, Drinking Water, and Water Supply Infrastructure, coordinated by Jonathan L.
Ramseur.
3 EPA, Clean Watersheds Needs Survey (CWNS)—2022 Report and Data, Data Dashboard, https://sdwis.epa.gov/ords/
sfdw_pub/r/sfdw/cwns_pub/about.
4 Based on U.S. Census data, American Community Survey, https://www.census.gov/programs-surveys/acs.
5 State-specific data on decentralized system use are limited. The most recent such data are from 1990. The 1990 data
indicate that the percentage of households that used public systems versus decentralized systems varied by state,
ranging from 90% of households using public systems in California to 43% in Vermont. See U.S. Census, “Historical
Census of Housing Tables: Sewage Disposal,” https://www.census.gov/data/tables/time-series/dec/coh-sewage.html.
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Wastewater Infrastructure Funding: Background and Affordability Issues
Census data indicate that less than 1% of households had neither centralized nor decentralized
wastewater infrastructure in 2023.6
Wastewater Infrastructure Needs Estimates
EPA periodically reports on the capital cost of wastewater infrastructure needs. In EPA’s most
recent assessment (published in 2024), EPA estimated national wastewater infrastructure needs of
$630 billion over 20 years.7 Figure 1 compares the needs estimates—in constant 2023 dollars—
by need category from the 2024 report and the two prior reports, published in 2016 and 2010.8
The figure indicates that total needs estimates decreased from 2010 to 2016 by about 20%, due to
decreases in several categories: secondary wastewater treatment,9 combined sewer overflow
(CSO) correction,10 and stormwater management.11 Total needs estimates increased by about 70%
between 2016 and 2024. However, the 2016 report did not include infrastructure needs regarding
nonpoint source pollution. If the “nonpoint source pollution” category is removed from the 2016
to 2024 comparison, estimated needs increase by about 45%.
The precision of the needs estimates and year-to-year comparisons should be viewed with some
caution. A 2024 Government Accountability Office (GAO) report highlighted several data issues
regarding the estimates.12 GAO found that the needs estimates included incomplete data, which
varied by project type and community size. For example, GAO found that needs estimates from
small communities were particularly incomplete,13 as “small communities are typically
understaffed, lack the technical expertise, and have too many competing priorities to assess their
centralized clean water needs and develop documentation.”14
6 U.S. Census, American Housing Survey, https://www.census.gov/programs-surveys/ahs.html.
7 EPA, 2022 Clean Watersheds Needs Survey—Report to Congress, 2024, https://www.epa.gov/system/files/
documents/2024-05/2022-cwns-report-to-congress.pdf.
8 EPA collects data from the states to prepare the needs estimate reports. Generally, several years elapse between data
collection and report publication. The 2010 report is based on 2008 data; the 2016 report is based on 2012 data; and the
2024 report is based on 2022 data.
9 Per EPA category definitions, secondary wastewater treatment “requires a treatment level that produces an effluent
quality of 30 milligrams per liter of both 5-day biochemical oxygen demand (BOD5) and total suspended solids.... In
addition, the secondary treatment must remove 85 percent of BOD5 and total suspended solids from the influent
wastewater.” See EPA, “About the Clean Watersheds Needs Survey (CWNS),” June 9, 2025, https://www.epa.gov/
cwns/about-clean-watersheds-needs-survey-cwns.
10 Per EPA category definitions, combined sewer overflow (CSO) correction “includes needs to prevent or control the
periodic discharges of mixed stormwater and untreated wastewater (CSOs) that occur when the capacity of a sewer
system is exceeded during a wet weather event.” See EPA, “About the Clean Watersheds Needs Survey (CWNS),”
June 9, 2025, https://www.epa.gov/cwns/about-clean-watersheds-needs-survey-cwns.
11
Per EPA category definitions, stormwater needs can include “geographic information systems and tracking systems,
equipment (e.g., street sweepers, vacuum trucks), stormwater education program startup costs (e.g., setting up a
stormwater public education center, building a traveling stormwater education display), and stormwater management
plan development.” See EPA, “About the Clean Watersheds Needs Survey (CWNS),” June 9, 2025,
https://www.epa.gov/cwns/about-clean-watersheds-needs-survey-cwns.
12 Government Accountability Office (GAO), Clean Water: Revolving Fund Grant Formula Could Better Reflect
Infrastructure Needs, and EPA Could Improve Needs Estimate, July 2024, https://www.gao.gov/products/gao-24106251 (hereinafter GAO 2024 Report).
13 According to GAO, officials in one state were able to obtain needs information from only “approximately 17 percent
of small communities in their state, compared with 95 percent of large communities.” GAO 2024 Report, p. 30.
14 GAO 2024 Report, p. 30.
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Wastewater Infrastructure Funding: Background and Affordability Issues
Figure 1. Comparison of EPA’s Wastewater Infrastructure Needs Estimates
Values Adjusted for Inflation
Source: Prepared by CRS. Data from Environmental Protection Agency (EPA), Clean Watersheds Needs Survey
(CWNS) reports, https://www.epa.gov/cwns/clean-watersheds-needs-survey-cwns-2022-report-and-data. The
dates in the figure indicate the date of publication. The 2010 report is based on 2008 data; the 2016 report is
based on 2012 data; and the 2024 report is based on 2022 data.
Notes: “CSO” denotes combined sewer overflow. The 2016 report did not include infrastructure needs
regarding nonpoint source pollution.
Table 1 provides more details about the percentage changes by category between the 2016 and
2024 reports. For example, the stormwater management need category increased by 387% and the
decentralized wastewater treatment category increased by 170%, while the new conveyance
category decreased by 26% and the combined sewer overflow category decreased by 40%.
Table 1. EPA’s Estimated Wastewater Infrastructure Needs by Category
in 2016 and 2024
Dollars in Billions; Adjusted to 2023 Dollars
Need Category
2016 Estimate
2024 Estimate
Change
Percent Change
Secondary Wastewater Treatment
$69
$70
$1
1%
Advanced Wastewater Treatment
$65
$ 87
$22
34%
Conveyance System Repair
$67
$115
$48
72%
New Conveyance Systems
$58
$43
-$15
-26%
Combined Sewer Overflow Correction
$64
$38
-$26
-40%
Stormwater Management
$25
$121
$95
379%
$99
n/a
n/a
Nonpoint Source Pollution
Not reported
Water Reuse
$8
$8
$0
1%
Decentralized Wastewater Treatment
$29
$78
$49
170%
Total Estimated Needs
$385
$659
$274
71%
Source: Prepared by CRS. Data from Environmental Protection Agency (EPA), Clean Watersheds Needs Survey
(CWNS) reports, https://www.epa.gov/cwns. EPA provides definitions of these need categories at “About the
Clean Watersheds Needs Survey (CWNS),” June 9, 2025, https://www.epa.gov/cwns/about-clean-watershedsneeds-survey-cwns.
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Wastewater Infrastructure Funding: Background and Affordability Issues
Clean Water State Revolving Fund Program
Through amendments to the Clean Water Act (CWA) in 1972, Congress established the principal
federal program to support wastewater treatment plant construction and related eligible
activities.15 This 1972 program significantly enhanced what had previously been a modest grant
program. CWA Title II authorized grants to states for wastewater treatment plant construction
under a program administered by EPA. Federal funds were provided through annual
appropriations under a state-by-state allocation formula contained in the CWA. The formula was
based on states’ financial needs for treatment plant construction and population. States used their
allotments to make grants to local governments to build or upgrade categories of wastewater
treatment projects, including treatment plants, related interceptor sewers, correction of
infiltration/inflow of sewer lines, and sewer rehabilitation. This grant program was one of the
largest nonmilitary public works programs in U.S. history.
CWA amendments enacted in 1987 (P.L. 100-4) began the phaseout of the Title II program and
initiated a new program to support wastewater infrastructure projects: the CWSRF program.
Under the CWSRF, states continue to receive federal grants, but now they provide a 20% match
and use the combined funds to make subsidized loans to communities. Monies used for projects
are repaid to states to create a “revolving” source of assistance for other communities.
The CWSRF program fully replaced the Title II program in FY1991. During the transition from
the Title II program to the CWSRF program, Congress began to provide “earmarked” water
infrastructure grants to individual communities and regions. In subsequent years, the earmarked
funds accounted for a significant amount of the total appropriation. General opposition by
Members of Congress to congressional earmarking stopped the practice in FY2011, but Congress
continued to provide special project appropriations to support Alaska Native Village and
U.S.-Mexico border projects.
When the CWSRF program was created, Congress intended for CWSRF appropriations to be
phased out by FY1995, marking a transition to full state and local financing for wastewater
infrastructure projects.16 State CWSRF programs were to be sustained by loan repayments to the
state fund after that date.17 The intention was that states would have greater flexibility to set
priorities and administer funding in exchange for an end to federal aid. The intended shift of the
CWSRF program to a full state responsibility has not occurred, and Congress has continued to
provide CWSRF appropriations to support wastewater infrastructure activities. A number of
factors may have played a role in these continued appropriations, including (1) pressure to extend
federal funding due, in part, to wastewater infrastructure needs estimates (described above); and
(2) varied perspectives regarding the role the federal government should play in supporting local
wastewater infrastructure. For more context on the role the federal government has played in
funding wastewater infrastructure—in comparison to state and local governments—see “History
of Wastewater Infrastructure Funding.”
Congress has revised the CWSRF several times to expand the types of assistance offered as well
as the scope of eligible projects. Recent appropriations for the CWSRF and earmarked funds for
wastewater projects are further detailed below.
15 Federal Water Pollution Control Act Amendments of 1972 (P.L. 92-500).
16 See, for example, Rep. Nowak, “Providing for Consideration of H.R. 1, Water Quality Act of 1987,” House Debate
on H.R. 1, Congressional Record, daily edition, vol. 133 (January 8, 1987), pp. H161-H216.
17 The 1987 CWA amendments authorized appropriations for the newly created CWSRF program through FY1994.
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Eligible Recipients and Eligible Uses
In general, eligible loan recipients for CWSRF assistance are any municipal, intermunicipal,
interstate, or state agency. Private utilities are not eligible to receive funds for construction of
wastewater treatment works and most other eligible activities, but, in some cases, private entities
are eligible to receive assistance for certain types of activities (e.g., decentralized wastewater
treatment projects; projects to manage, reduce, or treat stormwater; or development of watershed
management projects).
The list of eligible projects (in CWA Section 603)18 remained unchanged from the CWSRF
creation until 2014. Until that time, projects or activities eligible for funding included those
needed for constructing or upgrading (and planning and designing) publicly owned municipal
wastewater treatment plans. These include construction or upgrading of secondary or advanced
treatment plants; construction of new collector sewers, interceptor sewers, or storm sewers; and
projects to correct existing problems of sewer system rehabilitation, infiltration/inflow of sewer
lines, and combined sewer overflows. Operation and maintenance are not eligible activities.
In addition, the statutory list of eligible activities initially included nonpoint source management
programs and estuary activities in approved State Nonpoint Management Programs and estuarine
Comprehensive Conservation and Management Plans, respectively.19
The Water Resources Reform and Development Act of 2014 (WRRDA; P.L. 113-121) amended
the initial list of eligible projects by adding several types of projects and activities, including
•
•
•
•
replacement of decentralized treatment systems (e.g., septic tanks),20
energy efficiency improvements at treatment works,
reuse and recycling of wastewater or stormwater, and
security improvements at treatment works.
The America’s Water Infrastructure Act of 2018 (AWIA; P.L. 115-270) amended the list of
eligible activities to allow qualified nonprofits to provide assistance to certain individuals for the
repair or replacement of existing decentralized wastewater treatment systems or for the
connection of an individual household to a centralized publicly owned treatment works.
In addition to the CWA Section 603 eligibility provisions, CWA Section 602 includes several
requirements for states implementing the program.21 For example, Section 602 requires that all
funds in the CWSRF resulting from federal capitalization grants are first to be used to “assure
maintenance of progress ... toward compliance with enforceable deadlines, goals, and [CWA]
requirements.”22
18 33 U.S.C. §1383.
19
For a detailed breakdown of SRF funding by category that is updated annually, see EPA, Clean Water SRF Program
Information, National Summary, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-nationalinformation-management-system-reports.
20 In a 2021 report to Congress, EPA concluded that decentralized systems are “an integral component of our nation’s
wastewater infrastructure and can protect public health and water quality if they are properly planned, sited, designed,
installed, and maintained.” See EPA, Report to Congress on the Prevalence Throughout the U.S. of Low- and
Moderate-Income Households Without Access to a Treatment Works and the Use by States of Assistance Under
Section 603(c)(12) of the Federal Water Pollution Control Act, 2021,
https://www.epa.gov/system/files/documents/2022-01/low-mod-income-without-treatment_report-to-congress.pdf.
21 33 U.S.C. §1382.
22 33 U.S.C. §1382(b)(5).
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Financing or Funding Mechanism
EPA grants (from federal appropriations) and state matching funds capitalize state CWSRF
programs. These programs may provide the following general types of financial assistance:
•
•
•
•
•
making loans;
buying or refinancing existing local debt obligations;
guaranteeing or purchasing insurance for local debt obligations;
guaranteeing CWSRF debt obligations (i.e., to be used as security for leveraging
the assets in the CWSRF); and
providing loan guarantees for local government revolving funds.23
Loans are made at or below market interest rates, including zero-interest loans, as determined by
the state in negotiation with the applicant.
Although the CWSRF program is generally a loan program, states may provide “additional
subsidization”—such as principal forgiveness, negative-interest loans, or a combination—to
eligible entities that meet the state’s affordability criteria and for particular projects, such as those
that implement water or energy efficiency goals or mitigate stormwater runoff. The Infrastructure
Investment and Jobs Act (IIJA; P.L. 117-58) amended the CWSRF statutory provisions to direct
states to use at least 10% of their capitalization grants for additional subsidization under certain
conditions.24 The role of additional subsidization is discussed in more detail below.
History of Wastewater Infrastructure Funding
A comparison of the federal contribution of water infrastructure spending with the contributions
from state and local governments provides historical context. According to a 2025 analysis from
the Congressional Budget Office (CBO), state and local governments have contributed the vast
majority of public funding for wastewater and drinking water infrastructure projects. Figure 2
compares the inflation-adjusted capital spending on water infrastructure of state and local
governments and the federal government. The figure indicates that in 2023, the most recent year
for which data are available, the state and local share of such spending was 92%, while the
federal share was 8%.
23 33 U.S.C. §1383(d).
24 For more information, see CRS Report R46892, Infrastructure Investment and Jobs Act (IIJA): Drinking Water and
Wastewater Infrastructure, by Elena H. Humphreys and Jonathan L. Ramseur.
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Figure 2. Water Infrastructure Capital Spending, by Level of Government
FY1957-FY2023
Source: Prepared by CRS. Data from Congressional Budget Office (CBO), Public Spending on Transportation and
Water Infrastructure, 1956 to 2023, 2025, Supplemental Tables, https://www.cbo.gov/publication/60874.
Notes: Water infrastructure includes wastewater and drinking water infrastructure. The figure does not include
spending on operation and maintenance activities, which are not eligible to receive federal funding. Federal
spending in the figure includes the Environmental Protection Agency state revolving fund programs, as well as
water infrastructure spending from programs administered by the U.S. Department of Agriculture and the
Department of Housing and Urban Development (based on April 2020 correspondence with CBO). For details
on CBO’s methodology, see CBO, Public Spending on Transportation and Water Infrastructure, Appendix B, 2010,
https://www.cbo.gov/publication/21902.
Figure 3 illustrates the history of EPA wastewater infrastructure appropriations (between FY1973
and FY2025) in both nominal dollars and inflation-adjusted (2023) dollars. The increase in
FY2009 was due to a $4.0 billion increase in supplemental funds under the American Recovery
and Reinvestment Act of 2009 (ARRA; P.L. 111-5). The increase in FY2022-FY2025 was due to
the supplemental appropriations provided by IIJA, discussed below. As the figure indicates,
federal funding (after adjusting for inflation) for wastewater infrastructure in the 1970s and 1980s
was considerably greater than in more recent decades.
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Figure 3. EPA Wastewater Infrastructure Appropriations, FY1973-FY2025
Nominal and Real (Inflation-Adjusted) 2023 Dollars
Source: Prepared by CRS using information from annual appropriations acts, committee reports, and
explanatory statements presented in the Congressional Record.
Notes: The figure includes appropriations for the Clean Water Act Title II grant program, the Clean Water
State Revolving Fund program, special project funding, and community project funding/congressionally directed
spending (often referred to as “earmarks”). The increase in FY2009 was due to a $4.0 billion increase in
supplemental funds under the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). The increase in
FY2022-FY2025 was due to the supplemental appropriations provided by the Infrastructure Investment and Jobs
Act (P.L. 117-58). “Real” or inflation-adjusted (2023) dollars calculated from Office of Management of Budget,
Table 10.1, “Gross Domestic Product and Deflators Used in the Historical Tables: 1940–2026.” The deflator
values used for FY2024 through FY2026 are estimates.
Figure 4 provides more details about appropriations for the CWSRF, which received its first
appropriation in FY1989. Appropriations for the CWSRF program and other water infrastructure
programs are provided within an EPA account currently called the State and Tribal Assistance
Grants (STAG) account.
From FY2000 through FY2009, annual CWSRF appropriations averaged about $1.1 billion in
nominal dollars (i.e., not adjusted for inflation). ARRA provided $4.0 billion (nominal) in
FY2009 for the CWSRF, in addition to the regular FY2009 appropriations.25 In nominal dollars,
the annual appropriations for the CWSRF program increased after ARRA. Between FY2010 and
FY2021, the annual appropriations averaged about $1.6 billion (nominal) for the CWSRF.
In the 117th Congress, IIJA (Division J) provided five fiscal years of emergency supplemental
appropriations for the CWSRF.26 IIJA appropriations included annual funding between FY2022
and FY2026 totaling $11.7 billion (nominal). IIJA also provided the CWSRF program with a total
of $1.0 billion (nominal) between FY2022 and FY2026 to address “emerging contaminants.”
25 See CRS Report R46464, EPA Water Infrastructure Funding in the American Recovery and Reinvestment Act of
2009, by Jonathan L. Ramseur and Elena H. Humphreys, for more details.
26 See CRS Report R46892, Infrastructure Investment and Jobs Act (IIJA): Drinking Water and Wastewater
Infrastructure, by Elena H. Humphreys and Jonathan L. Ramseur, for more details.
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The Trump Administration proposed to substantially reduce the CWSRF appropriation in
FY2026. The President’s FY2026 budget proposal would provide $155 million for the CWSRF
program.27
Figure 4. Clean Water State Revolving Fund (CWSRF) Appropriation, FY1989FY2026
Nominal and Real (Inflation-Adjusted) 2023 Dollars
Source: Prepared by CRS using information from annual appropriations acts, committee reports, and
explanatory statements presented in the Congressional Record. Amounts reflect applicable rescissions and
supplemental appropriations, including $4 billion in P.L. 111-5 and $52.5 million in P.L. 116-20.
Notes: “CPF/CDS” denotes community project funding and congressionally directed spending, often referred to
as “earmarks.” “ARRA” denotes supplemental appropriations provided by the American Recovery and
Reinvestment Act (P.L. 111-5). “IIJA” denotes the 2022 Infrastructure Investment and Jobs Act (P.L. 117-58).
General Program or “GP” denotes supplemental appropriations provided to the CWSRF for the range of
statutory eligibilities. “EC” (or emerging contaminants) denotes CWSRF supplemental appropriations dedicated
to projects to address emerging contaminants. “Real” or inflation-adjusted (2023) dollars calculated from Office
of Management of Budget, Table 10.1, “Gross Domestic Product and Deflators Used in the Historical Tables:
1940–2026.” The deflator values used for FY2024 through FY2026 are estimates. The funding levels for FY2026
may change, reflecting funding for the CWSRF through annual appropriations.
Community Project Funding/Congressionally Directed Spending
The FY2022, FY2023, and FY2024 annual appropriations acts included community project
funding/congressionally directed spending (CPF/CDS), which some refer to as “earmarks.” The
27 Office of Management and Budget, “Environmental Protection Agency,” in Technical Supplement to the 2026
Budget: Appendix, pp. 945-964, https://www.govinfo.gov/app/collection/budget/2026.
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FY2025 appropriations, which were provided through a continuing resolution, did not include
CPF/CDS.28 For FY2026, the House and Senate appropriations committees began to collect
CPF/CDS project requests from Members in April 2025.29
CPF/CDS items support a range of objectives, including wastewater infrastructure. The recent
CPF/CDS funding framework differs from prior funding approaches for direct water
infrastructure grants.30 In particular, from FY1989 to FY2010, appropriations acts provided an
appropriation to the CWSRF and a separate appropriation for funds earmarked for water
infrastructure projects. In the FY2022, FY2023, and FY2024 appropriations acts, the CWSRF and
CPF/CDS funds are included in the same appropriation, with funding for CPF/CDS set aside from
the CWSRF appropriation.
•
•
•
The Consolidated Appropriations Act, 2022 (P.L. 117-103) sets aside for
CPF/CDS 27% ($443.6 million) of the total FY2022 CWSRF appropriation
($1,639 million).
The Consolidated Appropriations Act, 2023 (P.L. 117-328) sets aside for
CPF/CDS 53% ($863.1 million) of the total FY2023 CWSRF appropriation
($1,639 million).
The Consolidated Appropriations Act, 2024 (P.L. 118-42) sets aside for CPF/CDS
48% ($787.7 million) of the total FY2024 CWSRF appropriation ($1,639
million).
The effect of this reduction in SRF funding is distributed uniformly among state SRFs, as EPA
uses a CWA formula to determine state allotments of CWSRF capitalization grants.31 The
magnitude of the effect of shifting a portion of the SRF appropriations from being distributed via
the SRFs to being distributed as CPF/CDS can be presented in several ways.32 For example, the
effect can be assessed by comparing the different nominal funding amounts states received with
the addition of CPF/CDS to a hypothetical scenario in which states received only CWSRF
capitalization grants and CPF/CDS funding was not reserved. Figure 5 presents this comparison.
While some states received more funding due to CPF/CDS items, other states received less
wastewater infrastructure funding from annual appropriations acts as a result of this practice.
28 Full-Year Continuing Appropriations and Extensions Act, 2025 (P.L. 119-4). During the FY2025 appropriations
process, the House and Senate appropriations committees collected CPF/CDS requests from Members, but these were
not included in the continuing resolution for FY2025. For example, for the list of project requests compiled by the
Senate Committee on Appropriations, see U.S. Senate Committee on Appropriations, “Congressionally Directed
Spending Requests FY2025,” July 7, 2024, https://www.appropriations.senate.gov/congressionally-directed-spendingrequests-fy2025. For more information, see CRS Insight IN12524, Wastewater and Drinking Water Infrastructure
Program Funding Developments, by Elena H. Humphreys and Jonathan L. Ramseur.
29 For example, see House Committee on Appropriations, “FY26 Member Requests,” https://appropriations.house.gov/
fy26-member-requests.
30 These grants were often described as special project funding.
31 For more information, see CRS Report R47474, Clean Water State Revolving Fund Allotment Formula: Background
and Options, by Jonathan L. Ramseur.
32 For a more detailed analysis, see CRS Report R48066, The Role of Earmarks in SRF Appropriations in the 118th
Congress, by Elena H. Humphreys.
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Figure 5. Community Project Funding and Congressionally Directed Spending
Effects on Clean Water State Revolving Fund Allotments in FY2024
Source: Amounts calculated by CRS from the joint explanatory statement accompanying the Consolidated
Appropriations Act, 2024 (P.L. 118-42) and Clean Water Act formula found in 33 U.S.C. §1285(c)(3) as modified
by the Environmental Protection Agency (EPA). This figure is modified from a figure included in CRS Report
R48066, The Role of Earmarks in SRF Appropriations in the 118th Congress, by Elena H. Humphreys.
Notes: This figure identifies the change in available FY2024 wastewater infrastructure funds as a result of the
reservation of funds for community project funding/congressionally directed spending (CPF/CDS) and
distribution of CPF/CDS, compared with a hypothetical scenario in which CPF/CDS was not reserved. State
abbreviations are listed. For territories, “AS” denotes American Samoa, “GU” denotes Guam, “MP” denotes
Northern Mariana Islands, and “VI” denotes U.S. Virgin Islands. Prior to making state allotments, EPA reserves
2% of the CWSRF appropriation for grants to tribes for wastewater infrastructure projects, and EPA reserves
1.5% of the CWSRF appropriation for grants to AS, GU, MP, and VI for wastewater infrastructure projects.
Additional Subsidization
Since the establishment of the CWSRF in 1987, several acts have amended the CWA and its
CWSRF provisions to increase flexibilities and/or add new requirements. Among the changes to
the CWSRF program, several pertained to the use of additional subsidization. Additional
subsidization may involve a range of financial mechanisms, including principal or other loan
forgiveness; grants; negative interest loans; and buying, refinancing, or restructuring debt. The
authority to provide additional subsidization has been the primary route that Congress has used to
address water infrastructure affordability. The degree to which additional subsidization is required
or authorized—thereby altering the ratio between loans and subsidization—has generated
congressional and stakeholder attention over the past 15 years.
The use of additional subsidization alters the underlying framework of the CWSRF program. As
additional subsidization provides funding or financing to recipients that is not repaid into the
state’s revolving fund account, the use of additional subsidization affects the amount of funding
that is recycled into the account.
Appropriations Acts
The CWSRF program historically involved subsidized loans from the states to local entities. In
2009, ARRA provided an emergency supplemental appropriation to the CWSRF, requiring states
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to use at least 50% of the ARRA funds for additional subsidization. Since ARRA’s enactment,
appropriations acts have required states to use minimum percentages of their allotted CWSRF
grants to provide additional subsidization. Between FY2009 and FY2023, principal forgiveness
accounted for almost 90% of the additional subsidization offered by states.33
Enacted in 2022, IIJA supplemental appropriations (FY2022-FY2026) require states to use 49%
of their SRF capitalization grant amount as 100% principal forgiveness or grants, or a
combination of these. For the IIJA emergency supplemental appropriations for projects to address
emerging contaminants, states are required to use 100% of their capitalization grants as principal
forgiveness or grants.
CWA Amendments
In 2014, Congress amended the CWA, authorizing states to offer additional subsidization.34 After
this amendment, states have been able to use up to 30% of their annual capitalization grant to
provide additional subsidization to eligible recipients.35 IIJA also amended the CWA to require
states to use, at minimum, 10% of their capitalization grants for additional subsidization.36 In EPA
memoranda from 2022 and 2023, the agency clarified its interpretation that the appropriations
acts’ additional subsidization percentages are “additive” to the additional subsidization statutory
floor of 10% for the CWSRF.37 Thus, states have had an additional subsidization floor of 20%
since FY2022.
Figure 6 illustrates the degree to which states provided additional subsidization between FY2014
and FY2023. A year-by-year analysis of additional subsidization is challenging, because a state’s
CWSRF capitalization grant is available for obligation in the fiscal year in which EPA awards it
and in the subsequent fiscal year.38 It is uncertain how often and to what degree this occurs. Thus,
the data displayed in this figure should be viewed with caution.
In the figure, the red line depicts the statutory additional subsidization ceiling of 30%. The blue
line depicts the minimum percentage of additional subsidization (i.e., floor), which was 10%
between FY2014 and FY2021 as required by appropriations acts, and 20% thereafter. The figure
suggests that the states, in aggregate, reached the 30% ceiling in two fiscal years (FY2017 and
FY2021). The figure also suggests that states, in aggregate, did not reach the additional
subsidization floor in 2015. However, due to the two-year funding obligation window (described
above), it is uncertain whether states, in aggregate, are exceeding the 20% floor or reaching the
30% ceiling in a particular year. For example, a state may have provided additional subsidization
in FY2017 that was sourced from the state’s FY2017 capitalization grant and its FY2016
capitalization grant. The underlying data do not indicate the specific source of federal funding
33 Based on CRS analysis of data in EPA, CWSRF National Information Management System, https://www.epa.gov/
cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports.
34 Water Resources Reform and Development Act of 2014 (P.L. 113-121), §5003.
35
33 U.S.C. §1383(i).
36 P.L. 117-58, §50210.
37 EPA, FY 2022 DWSRF Base Allotment Availability, May 2022, https://www.epa.gov/system/files/documents/202205/FY%202022%20DWSRF%20Base%20Allotment%20Availability.pdf. EPA, FY 2022 CWSRF Base Allotment
Availability, May 2022, https://www.epa.gov/system/files/documents/2022-05/
FY%202022%20CWSRF%20Base%20Allotment%20Availability.pdf. EPA, FY 2023 Clean Water State Revolving
Fund Base Allotment Availability, March 2023, https://www.epa.gov/system/files/documents/2023-03/fy2023-cwsrfbase-allotment.pdf. EPA, FY 2023 Allotments for the Drinking Water State Revolving Fund Based on the Seventh
Drinking Water Infrastructure Needs Survey and Assessment, May 2023, https://www.epa.gov/system/files/documents/
2023-04/Final_FY23%20DWSRF%20Allotment%20Memo%20and%20Attachments_April%202023.pdf.
38 33 U.S.C. §1384(c).
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that supports states’ use of additional subsidization. Although specific-year evaluations are
uncertain, the figure illustrates that, in aggregate, states chose not to provide as much additional
subsidization to recipients as allowed under the statute.
Figure 6. Use of Additional Subsidization
in Clean Water State Revolving Fund Programs, FY2014-FY2023
Source: Prepared by CRS. Data from Clean Water State Revolving Fund (CWSRF) National Information
Management System, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-informationmanagement-system-reports.
Notes: Clean Water Act Section 604(c) (33 U.S.C. §1384(c)) provides that CWSRF capitalization grants allotted
to each state have two years of availability. Therefore, a state may provide assistance in one fiscal year with
funding from a previous fiscal year. Accordingly, a state may be complying with a prior fiscal year’s additional
subsidization requirements in the fiscal year following the year of appropriation.
Other EPA Wastewater Funding Programs
In addition to the CWSRF program, EPA implements several other programs that provide funding
to support wastewater infrastructure or support systems to apply for CWSRF assistance. These
programs are discussed below and followed by a table that identifies recent appropriations for
these programs.
Sewer Overflow and Stormwater Grant Program
In 2000, the Consolidated Appropriations Act, 2001 (P.L. 106-554) authorized EPA to establish a
new grant program in the CWA to address overflows from municipal combined sewer systems
and from municipal separate sanitary sewers (“wet weather” projects). At that time, Congress
authorized annual appropriations of $750 million for FY2002 and FY2003, but did not
appropriate funding for the program until FY2020. AWIA (P.L. 115-270) amended the grant
program by modifying the eligibility provisions to include stormwater infrastructure, among other
changes. In addition, AWIA reauthorized appropriations for the grant program for $225 million
for FY2019 and FY2020. IIJA reauthorized appropriations for $280 million annually for FY2022
through FY2026.
Under this program, EPA provides grants to states, which provide sub-awards to eligible entities.
CWA Section 221 directs states to prioritize funding to financially distressed communities, among
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other conditions. The grants to states are to be allocated based on a formula prepared by EPA.39 In
November 2022, EPA announced the availability of funding and invited states to apply for grants
to support eligible projects.40
Training and Technical Assistance for Rural, Small, and Tribal
Wastewater Systems
In 2018, AWIA added Section 104(b)(8) to the CWA authorizing EPA to make grants to qualified
nonprofits to provide technical assistance to help rural, small, and tribal publicly owned treatment
works and decentralized wastewater treatment systems to comply with the CWA and apply for
financing from the CWSRF.41 For this purpose, AWIA authorized appropriations of $25.0 million
per year for FY2019 through FY2023. IIJA reauthorized appropriations of $75.0 million per year
for FY2022 through FY2026 to carry out grant programs in Section 104(b)(8), as well as
Section 104(b)(3) and Section 104(g).
Water Infrastructure Finance and Innovation Act (WIFIA) Program
Congress established the WIFIA program in the Water Resources Reform and Development Act
of 2014 (P.L. 113-121; 33 U.S.C. §§3901-3914). WIFIA authorizes EPA and the U.S. Army Corps
of Engineers to provide credit assistance (e.g., secured loans) for a range of water infrastructure
projects. EPA provides WIFIA loans directly to eligible recipients. WIFIA appropriations
primarily cover long-term credit subsidy costs, which would cover the federal government’s risk
that the loan may not be repaid. EPA estimates that the average subsidy cost for WIFIA projects
will be comparatively low. Thus, relative to its budget authority, WIFIA allows for a larger
amount of total assistance. For example, EPA estimated that the FY2024 budget authority for
WIFIA subsidy costs would be $64.6 million of the $72.3 million for the program and will allow
EPA to lend approximately $6.5 billion.42
EPA, “State Formula Allocations for Sewer Overflow and Stormwater Reuse Grants,” 86 Federal Register 11287,
February 24, 2021, https://www.federalregister.gov/documents/2021/02/24/2021-03756/state-formula-allocations-forsewer-overflow-and-stormwater-reuse-grants.
40 EPA, “EPA Announces $52M in Grants for States to Support Clean Water, Flood Resilience, and Water Equity,”
press release, November 29, 2022, https://www.epa.gov/newsreleases/epa-announces-52m-grants-states-support-cleanwater-flood-resilience-and-water-equity.
41 Codified at 33 U.S.C. §1254(b)(8)). For more information, see EPA, “Training and Technical Assistance (TA)
Program for Rural, Small, and Tribal Wastewater Systems,” May 30, 2025, https://www.epa.gov/small-and-ruralwastewater-systems/training-and-technical-assistance-ta-program-rural-small-and.
42 EPA, “Notice of Funding Availability for Credit Assistance Under the Water Infrastructure Finance and Innovation
Act (WIFIA) Program,” 89 Federal Register 73083, September 9, 2024.
39
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Table 2. Appropriations for Selected Wastewater Infrastructure Programs
Appropriations in Nominal Value in Millions of Dollars (Not Adjusted for Inflation)
Appropriations
Program
U.S. Code
FY2020
(P.L. 116-94)
FY2021
(P.L. 116-260)
FY2022
(P.L. 117-103)
FY2023
(P.L. 117-328)
FY2024
(P.L. 118-42)
FY2025
(P.L. 119-4)
Water Infrastructure
Finance and Innovation
Act Program
33 U.S.C.
§§3901-3914
$60.0
$65.0
$69.5
$75.6
$72.3
$72.3
Sewer Overflow and
Stormwater Reuse
Municipal Grants Program
33 U.S.C. §1301
$28.0
$40.0
$43.0
$50.0
$41.0
$41.0
Training and Technical
Assistance Program for
Rural, Small, and Tribal
Wastewater Systems
33 U.S.C.
§1254(b)(8)
$12.0
$18.0
$20.0
$27.0
$25.5
$25.5
Source: Prepared by CRS using annual appropriations acts.
Wastewater Infrastructure Affordability Issues
Studies have found that the costs of wastewater and drinking water services have “increased
significantly” across the United States in recent years.43 EPA states that a number of factors have
played a role in these increased costs, including aging infrastructure and deferred maintenance,
regulatory requirements (e.g., treatment standards), inflation, and supply chain disruptions.44
Although Congress has provided increased funding levels in recent years—particularly
supplemental appropriations in IIJA (discussed above)—needs for capital infrastructure
improvements, as well as operations and maintenance costs, according to EPA, may be
challenging for communities to support with “affordable” water rates.45 As these needs and costs
have increased, water utilities have raised rates and household bill payments have increased.
Affordability concerns may increase if Congress adopts President Trump’s budget proposal
(discussed above) for FY2026.
Figure 7 illustrates the percentage increase in household payments for water and sewer services
between 1998 and 2024. The figure compares these percentage increases to percentage
increases—over the same time period—in the consumer price index (CPI) for all items (listed as
“All Goods and Services” in the figure). The CPI is often used to measure inflation in the U.S.
economy.46 The figure indicates that household payments for water and sewer increased at
roughly twice the rate of the CPI during this period. In addition, the figure illustrates the average
and median wage increases over this time period. The relative increases in water and sewer
service payments as compared to the wage data indicate that individuals are spending
proportionally more of their income on household water and sewer services.
43 EPA cites several studies in its 2024 report to Congress on affordability. See EPA, Water Affordability Needs
Assessment: Report to Congress, December 2024, https://www.epa.gov/waterfinancecenter/water-affordability-needsassessment (hereinafter EPA 2024 Affordability Report).
44 EPA 2024 Affordability Report, p. 4.
45 EPA 2024 Affordability Report, p. 7.
46 For more information, see CRS In Focus IF10477, Introduction to U.S. Economy: Inflation, by Lida R. Weinstock.
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Figure 7. Household Drinking Water and Sewer Payments
Versus Costs of Other Goods and Services
Percentage Change from 1998 to 2024
Source: Prepared by CRS and included in CRS Report R48271, Paying for Drinking Water: Background and Issues
for Congress, by Elena H. Humphreys; based on analysis of Bureau of Labor Statistics (BLS) data on Consumer
Price Index (CPI) for all urban consumers for the following series: CUUR0000SEHG01 and CUUR0000SA0. Data
rebased to calendar year 1998. CRS analysis of Social Security Administration data for the series: national
average wage index (AWI).
Notes: The CPI “all urban consumers” represents changes in prices of all goods and services purchased for
consumption by urban households, which BLS states represents 90% of the U.S. population. BLS CPI for water
sewer maintenance represents the changes in user payments for those services.
Wastewater and drinking water services are often combined on household water bills. One study
estimates that wastewater services account for about 60% of the total costs on these combined
bills.47 In general, costs for wastewater services are based on household water consumption.48
Recent studies indicate that the rates and payments are expected to increase. For example, a 2023
report from the National Association of Clean Water Agencies (NACWA) projected that
wastewater service rates would increase annually from 4.5% to 5.6% between 2025 and 2028.49 It
is uncertain how these estimated increases would compare to CPI during these years.
The billing methods utilities use to implement these rate increases can affect affordability. EPA
recommends that the pricing of water services cover the costs of providing service, for both
operations and maintenance and capital expenses.50 Water utility bills often comprise a fixed cost
element and a cost based on water use (volumetric charge). A 2024 study found that in recent
years water utilities have shifted their rate structure to collect a greater proportion of revenue
47 Bluefield Research, “U.S. Municipal Utility Water Rates Index 2024: Drinking Water & Sewer,” 2025,
https://www.bluefieldresearch.com/.
48 See, for example, D.C. Water, “Rates and Fees,” https://www.dcwater.com/customer-center/rates-and-fees.
49 National Association of Clean Water Agencies (NACWA), “Cost of Clean Water Index,” 2023,
https://www.nacwa.org/docs/default-source/resources—public/nacwa-index/2023-nacwa-cost-of-clean-waterindex.pdf?sfvrsn=e0f9c261_2.
50 EPA, Guidebook of Financial Tools: Paying for Environmental Systems, 2008, https://nepis.epa.gov/Exe/ZyPDF.cgi/
P100179D.PDF?Dockey=P100179D.PDF.
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from customers based on fixed charges. The study found that this shift in billing structure
disproportionately affects lower-income households.51
A 2024 survey of selected water utilities by the Department of Health and Human Services (HHS)
found that—on average—20% of U.S. households are in debt to their water utility.52 These
situations can result in broader impacts, forcing households to reduce spending on other expenses,
including food, health care, and education. In addition, households with unpaid bills may have
their services disconnected, which may result in households relying on nonhygienic practices
regarding household water and wastewater needs.53
In addition, water utilities rely on ratepayer revenue to support the system’s operation, among
other activities. When customer accounts are in arrears, utilities may make up the revenue
difference through other means or defer infrastructure repairs and improvements.
Some systems offer programs to assist low-income customers with water bill payments. Among
these, systems may offer individualized payment plans or customer assistance programs
(CAPs).54 However, some states prohibit the use of rate revenues to fund CAPs. Others face
potential legal challenges in doing so. Facing revenue shortfalls and increased costs, some water
systems have disconnected service to certain delinquent accounts. The practice of disconnecting
service for nonpayment is more commonly associated with tap water service rather than
wastewater disposal services.
EPA’s 2024 Affordability Report: Highlights
Section 50108 of IIJA directed EPA to submit a report to Congress that examines the degree to
which water service providers serve a “disproportionate percentage ... of households with
qualifying need.”55 EPA published this report in December 2024, stating that its report provides
an understanding of the water affordability burden in the United States among households and
utilities.
Previous studies have used a number of definitions for water affordability. In its study, EPA used
two affordability threshold values: 3% and 4.5% of household income spent on drinking water
and wastewater bills combined. In other words, if payments for household water services
accounted for more than 3% or 4.5% of total monthly household income, these payments were
considered unaffordable.56 Based on these thresholds, EPA estimated the following:
51 Manuel P. Teodoro and Ryan Thiele, “Water and Sewer Price and Affordability Trends in the United States, 2017–
2023,” Journal of the American Water Works Association, 2024, https://doi.org/10.1002/awwa.2315.
52 Department of Health and Human Services, Office of Community Services, Understanding Water Affordability
Across Contexts: LIHWAP Water Utility Affordability Survey Report, 2024, https://acf.gov/sites/default/files/
documents/ocs/water-survey.pdf.
53 EPA 2024 Affordability Report, p. 9.
54 For more information, see EPA, “Compendium of Drinking Water and Wastewater Customer Assistance Programs,”
https://www.epa.gov/waterfinancecenter/compendium-drinking-water-and-wastewater-customer-assistance-programs.
55 Codified in 42 U.S.C. §300j-19a note.
56 In its report, EPA stated that the 4.5% threshold is used in a number of other studies (and is comparable to
affordability metrics in other contexts), and the 3% threshold was used in a widely cited 2023 study: Stacey Isaac
Berahzer et al., Low-Income Water Customer Assistance Program Assessment, 2023, prepared for the American Water
Works Association, Association of Metropolitan Water Agencies, National Association of Clean Water Agencies,
National Association of Water Companies, and Water Environment Federation, https://www.amwa.net/system/files/
linked-files/liwcap—final-report-4-24-23.pdf.
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•
•
•
between 12.1 million and 19.2 million U.S. households (or 9.2% to 14.6%) lack
affordable access to water services;57
between 11% and 20% of U.S. water service customers are in arrears with their
bills;
the total annual cost of unaffordable water service bills is between $5.1 billion
and $8.8 billion.
EPA noted several challenges and limitations the agency (and other study authors) encountered
when assessing water affordability. Such assessments generally require water rates data, census
data, and a means to match these data geographically. EPA pointed out that a comprehensive
database of national water rates does not exist, and the available data from utilities are presented
with inconsistent formats and scopes, making comparisons across utilities challenging.
In its 2024 Affordability Report, EPA matched water utility rate data with 59% of the U.S.
population. For areas with no data (e.g., areas using decentralized systems), EPA used average
rates from the surrounding region. Based on observed data and extrapolations for areas without
available data, EPA prepared the map shown in Figure 8, which illustrates the percentage of
households with unaffordable water bills (using the 4.5% threshold) by U.S. county. As the figure
indicates, the percentage of households with unaffordable water service bills ranged by county
from zero percent to 30%-45%.
Figure 8. EPA Estimate of Percentage of Household with Unaffordable Water Bills
By County, Using 4.5% Threshold of Household Income
Source: Reproduced from Figure 10 in Environmental Protection Agency (EPA), Water Affordability Needs
Assessment: Report to Congress, December 2024, https://www.epa.gov/waterfinancecenter/water-affordabilityneeds-assessment.
57 EPA found this estimate to be consistent with other studies, with estimates ranging from 5.8% to 17.1% of
households.
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Notes: As EPA discusses in its 2024 report, the above figure includes water rate data associated with 59% of the
U.S. population. EPA used those data to extrapolate water rate data to areas serving the remaining 41% of the
U.S. population.
EPA’s 2024 Affordability Report: Recommendations
IIJA directed EPA to provide recommendations in its 2024 Affordability Report that would
address affordability issues. EPA provided a number of recommendations that fell into three broad
categories, discussed below.
Establish a Permanent Federal Water Assistance Program
IIJA Section 50109 directed EPA—within two years of enactment of IIJA—to establish a pilot
grant program to provide household drinking water and/or wastewater rate assistance based on
the results of the study performed under IIJA Section 50108. This program would be similar to
the Low Income Household Water Assistance Program established during the COVID-19
pandemic (see text box below). Section 50109 did not include an authorization of appropriations
for this grant program, and Congress has not provided an appropriation to carry out this directive.
In its 2024 Affordability Report, EPA estimated that the cost to fund the pilot program would
range between $115 million and $185 million per year. EPA stated that this pilot program could
be the first step in creating a more comprehensive and permanent program.
Examples of Federal Assistance in Other Contexts
EPA noted that the federal government provides household assistance in other contexts, including the following
examples:
•
The Supplemental Nutrition Assistance Program (SNAP)—formerly called the Food Stamp Program—is
designed primarily to increase the food purchasing power of eligible low-income households to help them buy
a nutritionally adequate low-cost diet.58 In FY2023, SNAP provided food benefits to approximately 42 million
low-income individuals to supplement their grocery budgets.59
•
The Low Income Home Energy Assistance Program (LIHEAP) makes annual grants to states, tribes, and
territories to operate home energy assistance programs for low-income households.60 In FY2023, Congress
provided approximately $6.2 billion for LIHEAP, which supported an estimated 5.9 million households.61
•
The Low Income Household Water Assistance Program (LIHWAP) was established in response to the
COVID-19 pandemic and provided funding to states, tribes, and territories to operate drinking water and
wastewater assistance programs. The program assisted low-income households with rates charged for
drinking water and wastewater as well as account arrearages. The program received appropriations in the
Consolidated Appropriations Act, 2021 (P.L. 116-260) and the American Rescue Plan Act of 2021 (P.L. 1172), which appropriated $638 million and $500 million, respectively. 62 LIHWAP was administered by the
Department of Health and Human Services (HHS) and followed many of the program rules associated with
the LIHEAP Program. Through the second quarter of 2024, HHS reported that LIHWAP had assisted 1.7
million households.63
58 For more information, see CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on
Eligibility and Benefits, by Randy Alison Aussenberg and Gene Falk.
59 U.S. Department of Agriculture, Economic Research Service, “Supplemental Nutrition Assistance Program
(SNAP)—Key Statistics and Research,” January 6, 2025, https://www.ers.usda.gov/topics/food-nutrition-assistance/
supplemental-nutrition-assistance-program-snap/key-statistics-and-research/.
60 For more information, see CRS Report RL31865, LIHEAP: Program and Funding, by Libby Perl.
61 Department of Health and Human Services, Office of Community Services, “LIHEAP Fact Sheet,” https://acf.gov/
ocs/fact-sheet/liheap-fact-sheet.
62 See Division H, Title V, §533, of P.L. 116-260, and §2912 of P.L. 117-2.
63 See the LIHWAP Data Dashboard Quarterly Reports, https://lihwap-hhs-acf.opendata.arcgis.com/pages/quarterlysnapshot.
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In addition, EPA suggested policymakers consider a household water efficiency and plumbing
repair grant program. EPA argued that such a program could complement a water assistance
program by addressing water infrastructure inefficiencies in households (e.g., leaks and
inefficient appliances).
Increase Awareness Regarding Existing Federal Programs
and Information Sharing
EPA contended that many communities are unaware of the existing federal funding programs
(e.g., CWSRF program, discussed above) and other resources that could address affordability
concerns. EPA suggested this situation could be improved through increased outreach activities
and idea sharing among stakeholders. EPA specifically highlighted customer assistance programs
(CAPs) and the need for utilities to share lessons learned from their CAP experiences.
Reduce Infrastructure Capital and Operating Costs Through Regionalization
EPA offered a number of recommendations to help reduce wastewater infrastructure costs. For
example, EPA suggested that policymakers look for ways to encourage regionalization and
consolidation among service providers. The CWA Section 104(b)(8) grant program could be used
to support this objective. As discussed above, this program provides funding to qualified
nonprofits to provide technical assistance to help rural, small, and tribal publicly owned treatment
works and decentralized wastewater treatment systems to comply with the CWA and apply for
financing. In addition, policymakers could consider using set-asides in appropriations acts to
support these objectives, as has been done to support specific project types—“green
infrastructure,” water efficiency, or energy efficiency—through the CWSRF.64
Other Policy Considerations
Policymakers may also consider modifying existing provisions in the CWA to address
affordability. Several options exist to help achieve this goal. One option would be for Congress to
amend the CWSRF state allotment formula.65 An adjustment to the CWSRF allotment formula
that more closely aligns with current estimated needs and population would likely also have some
effect on affordability. For example, if states with a greater proportion of needs receive a larger
percentage of federal funds, the utilities in these states may not need to raise water service rates as
high as they might raise them under the existing allotment structure.
When Congress created the CWSRF program in 1987, Congress may have based the state
allotments on some combination of wastewater infrastructure needs and population, among other
potential factors.66 These allotment percentages have effectively been in place since the program’s
establishment in 1987.67 Since 1987, EPA has produced seven wastewater infrastructure needs
64 These particular project types are not defined in the CWA CWSRF provisions. EPA issued guidance providing
definitions and examples of eligible project types. See EPA, “Green Project Reserve Guidance for the Clean Water
State Revolving Fund (CWSRF),” https://www.epa.gov/cwsrf/green-project-reserve-guidance-clean-water-staterevolving-fund-cwsrf.
65 For more details, see CRS Report R47474, Clean Water State Revolving Fund Allotment Formula: Background and
Options, by Jonathan L. Ramseur.
66 The legislative history does not explicitly describe these factors or how they are weighted in the allotments.
67 In 1995, three districts of the U.S.-administered United Nations Trust Territory of the Pacific Islands, which
previously had been eligible for CWA funds (and part of the CWSRF allotment), became sovereign states by adopting
(continued...)
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surveys. EPA published its most recent survey in 2024. In addition, the U.S. Census Bureau has
prepared four reports on state population levels. None of this more recent information is reflected
in the statutory funding allocation.
The Water Resources Reform and Development Act of 2014 (P.L. 113-121) directed EPA to report
to Congress whether the allotment adequately addressed water quality needs. EPA published this
report in 2016.68 Based on the difference between the current allotments and the updated needs
surveys and state population estimates, EPA concluded that most states did not receive
appropriated funds in proportion to their infrastructure needs estimates or populations. A 2024
GAO report reached similar conclusions. In the report, GAO stated, “Congress should consider
revising the allotment formula for the [CWSRF] program to clearly align with the program’s
goals and requiring EPA to periodically calculate allotment percentages using the most recent
data.”69
Both the 2016 EPA report and the 2024 GAO report highlighted concerns regarding the
incomplete data in the wastewater needs estimates. Because of these concerns, some may argue
that factors other than needs estimates should be included for CWSRF allocation. Both EPA and
GAO offered allotment formula alternatives that included additional factors, such as population,
economic burden, and water quality.
The CWSRF program’s allotment formula has been an issue of debate for a number of years.
Considerations of states’ potential allotment decreases or increases bear heavily on discussions of
policy choices reflected in alternative formulations. If Members consider the allotment formula in
the 119th Congress, they may assess allotment in the context of recent developments in CWSRF
appropriations. For instance, the supplemental appropriations in IIJA increased CWSRF
appropriations in FY2022 through FY2026 by approximately 100% compared to regular
appropriations in previous years.70 The increased appropriations may help alleviate the concerns
noted above, because the total appropriations available for state allotment are greater due to the
IIJA appropriations. It is uncertain whether the IIJA appropriations would have the same effect in
FY2026. As noted above, the Trump Administration proposed to substantially reduce the CWSRF
appropriation in FY2026.
Another consideration regarding the allotment formula and its effects on affordability is the IIJA
supplemental funds’ additional subsidization requirements. In contrast to regular CWSRF
appropriations, almost half (49%) of the IIJA supplemental funds are to be used for additional
subsidization. If the additional subsidization funding from IIJA is allotted under the current
formula, this subsidization may not be applied as effectively as possible (i.e., not reaching the
recipients that need it the most).
Another option for Congress to consider is altering the additional subsidization provisions to
enhance their effect on affordability. In CWA Section 603, states must apply the additional
subsidization—with a statutory floor of 10% and ceiling of 30%—to support one of the following
objectives: (1) affordability concerns or (2) specific project types, including water efficiency and
a Compact of Free Association. As of FY1999, the Trust Territory, which had been receiving 0.1295% of available
funds, was no longer eligible for funding under the act. EPA made an administrative adjustment to allotment totals for
all other recipients for FY2000 and onward to reflect this change.
68 EPA, Review of the Allotment of the Clean Water State Revolving Fund (CWSRF), Report to Congress, 2016,
https://www.epa.gov/sites/production/files/2016-05/documents/review_of_the_allotment_of_the_cwrsf_report.pdf.
69 GAO, Clean Water: Revolving Fund Grant Formula Could Better Reflect Infrastructure Needs, and EPA Could
Improve Needs Estimate, July 2024, https://www.gao.gov/products/gao-24-106251.
70 If regular CWSRF appropriations remain consistent in FY2025 and FY2026, the supplemental appropriations in IIJA
would represent 100% increases in those years as well.
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energy efficiency projects.71 The construction of this provision gives states the discretion to apply
100% of their additional subsidization allotment toward water efficiency and/or energy efficiency
projects, rather than affordability. States are not required to use any of their annual allotments for
affordability, if they choose to support these specific project types.
In addition, the CWSRF set-aside (typically 10%) in recent appropriations acts specifies that the
additional subsidization go to “eligible recipients.” The scope of this set-aside is broader than the
scope of additional subsidization in CWA Section 603. As with the scope of additional
subsidization in Section 603, states may use these funds to address affordability issues, but states
are not required to do so. For example, states could choose to provide additional subsidization to
any eligible recipient for any eligible project, regardless of the underlying financial characteristics
of the recipient. Congress could consider altering the scope of these set-asides to direct more of
the additional subsidization to recipients or communities facing affordability challenges.
Further, the regular appropriations in FY2022, FY2023, and FY2024 included CPF/CDS items.
As discussed above, these funds effectively decrease the total allotment available for state
CWSRF programs. Although the CPF/CDS funds support the same types of projects that are
financed by CWSRF programs, their distribution is not subject to the CWA allotment formula.
The CPF/CDS funds, which require a 20% match from recipients, are more akin to the CWSRF
additional subsidization (i.e., grants rather than loans). If Congress continues to provide
CPF/CDS funding, Congress could consider requiring that some portion of these funds be used to
address affordability concerns. For example, the appropriations committees could require that
Members’ CPF/CDS requests include some percentage of projects that would support lowerincome communities.
Author Information
Jonathan L. Ramseur
Specialist in Environmental Policy
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
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copy or otherwise use copyrighted material.
71 33 U.S.C. §1383(i).
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