Firms that pursue Corps of Engineers work groaned after President Bush proposed a 14% cut in the 2006 civil works budget. Hopes rose when the House approved $414 million more than Bush did. Now, industry is smiling after Senate appropriators boosted the Corps by a further $552 million. "We were very pleased that the House went up, but the Senate is just phenomenal," says National Waterways Conference President Worth Hager. Figures won�t be final, however, until the full Senate votes and its numbers are reconciled with the House�s.

How 2006 Corps Budget Is Shaping Up
Bush proposal 2006
House 2006

Senate committee

General investigations 144 95 100 180
Operations/maintenance 2,099 1,798 2,000 2,100
Construction, general 1,844 1,637 1,900 2,087
Flood control, Mississippi River/tributaries  328  270  290  433
Other** 625 532 456 498
  ------------ ----------- --------- ---------
Total Corps Civil Works 5,040* 4,332 4,746 5,298
*includes $372 million in emergency funds for hurricanes, other disasters
**includes regulatory program, flood control and emergencies, general expenses, Office of Asst.Sec.
for Civil Works    
Sources: House, Senate Appropriations Committees, ENR 

That conference could be complicated by disputes between the chambers over Corps policies, including its use of "continuing contracts." If federal aid doesn�t cover project costs in a given year, a contractor can finance a portion of the work itself and seek reimbursement later from the Corps, plus interest, when Congress approves new funding. House appropriators have slammed such continuing contracts as "an unsound financial practice." But in the report with its 2006 bill, the Senate Appropriations Committee says the Corps is tightening controls over the contracts and expects them "to remain a generally available contracting tool for program execution."

The energy and water bill the Senate panel approved June 16 allots $5.3 billion to civil works, up 5% from 2005. That includes $2.1 billion for the construction account, a 13% jump. Another industry source says that in the current budget climate, "there are some other programs that are being treated much more severely than the Corps civil works program."

Big construction items in the Senate committee measure include: $90 million to dredge New York�s harbor; $85 million for Columbia River fish mitigation; $85 million for the Ohio River�s Olmsted Locks and Dam; $74 million for Marmet Lock on the Kanawha River; and $60 million for Missouri River fish and wildlife recovery.

On a related front, a House subcommittee June 16 approved a water resources authorization bill with an estimated $10 billion in Corps projects. The last Water Resources Development Act became law in December 2000. In the Senate, the Environment and Public Works Committee cleared its version of a 2005 WRDA on April 13.

Energy: Senate Adds Tax Breaks, Renewables Standard
As the Senate neared a final vote on a wide-ranging energy package, it approved $14.1 billion in tax breaks through 2015 and mandated that electric utilities derive 10% of the power they sell in 2020 from renewable sources.

The provisions, passed on June 20, include $6.4 billion in breaks for conservation, energy efficiency, alternative fuels or hybrid, electric or alternative-fuel vehicles. Incentives include credits for building energy-efficient homes. A House bill has $8 billion in tax breaks and is less generous for energy efficiency.

The "renewable portfolio standard," approved June 16, requires utilities to tap sources such as solar or wind for 2.5% of power sold in 2008, 5% in 2012, 7.5% in 2016 and 10% in 2020.

TEA-21: Senate Offers $290 Billion
In a compromise, Senate transportation conferees proposed that the bill guarantee $290 billion. The June 20 proposal is down $5 billion from the bill the Senate passed in May, says Environment and Public Works Committee spokesman Bill Holbrook. At press time, the House, which approved a $284-billion bill, had not responded.

"We�re...optimistic that we�ll be able to have the legislation completed by the end of the month," Holbrook says. Extensions have kept aid flowing since the Transportation Equity Act for the 21st Century expired in 2003. The latest stopgap lapses June 30. David Bauer, American Road & Transportation Builders Association senior vice president, says the offer "demonstrates that the political process is working, but where this is going to end up I don�t think anybody can say with certainty."

Drinking Water: EPA Report Says Needs Continue To Rise
In its third report to Congress on drinking water infrastructure, the Environmental Protection Agency says it will cost $277 billion over 20 years to repair or replace aging pipes and other equipment. In EPA’s 2001 report, the estimated 20-year need was $151 billion. The latest study, conducted in 2003 but released June 14, covers some 74,400 systems. EPA uses the data to allocate grants, but rising needs haven’t led to higher funding.

Compiled by Tom Ichniowski and Sherie WInston