Trump Funding Freeze
EPA Silence on Project Fund Status Concerns Stakeholders
Newly appointed US Environmental Protection Agency Administrator Lee Zeldin, center—seen here on a Feb. 3 visit to East Palestine, Ohio, on the second anniversary of the Norfolk Southern train derailment there—has kept agency water infrastructure stakeholders in limbo on project funding.
Credit: AP Photo/Gene J. Puskar
Construction sector associations and other groups focused on members' work related to U.S. Environmental Protection Agency clean water initiatives are continuing to field a barrage of questions this week about how, when and if the Trump administration’s move to freeze federal funding will affect their continued execution.
The concern is growing after the Office of Management and Budget issued a sweeping temporary freeze on trillions of dollars of awarded federal loans and grants, including those by EPA under a number of laws. The OMB directive was quickly rescinded after an outcry from recipients, which developed into two separate lawsuits by private groups and by a 22-member coalition of Democratic-led states based on evidence that the administration was still executing the funding pause on targeted programs “implicated” by President Donald Trump’s executive orders as "undermining the national interest.”
The lawsuits brought legal action in two federal courts that halted the Trump funding holdup, including one on Feb. 3.
EPA is reviewing all funding programs in light of the executive orders, which is causing significant confusion among utilities and states, said Zack Perconti, vice president of government affairs at the National Utility Contractors Association.
“The bottom line is, there’s a lot of confusion and uncertainty as to what is impacted and what is not,” noted Nathan Gardner-Andrews, chief advocacy officer of the National Association of Clean Water Agencies, who added that at a conference with the wastewater treatment trade group’s members last week, “literally almost by the hour, things were changing. Orders are issued, orders are rescinded.”
But of $50 billion worth of grants authorized under the Inflation Reduction Act, $32 billion has not been awarded and could be vulnerable to being clawed back, with about $20.5 billion of that related to EPA programs, according to a federal spending data site that was analyzed in a Feb. 8 Washington Post report.
Negative Impacts?
A big part of the chaos related to core water funding programs is that the administration has clearly indicated that it is looking at DEI and environmental justice-related programs, Gardner-Andrews said. “What is unclear in terms of the impact of the executive order is if a utility has these types of programs, will that negatively impact its ability to get Clean Water Act funding?” he said.
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Complicating the situation is an EPA gag order on outgoing communication that has prevented agency officials from discussing issues with stakeholders, Gardner-Andrews said.
The consensus is that State Revolving Fund (SRF) programs—EPA’s core clean water funding programs—are not the intended targets of the executive orders, he said. However, SRF funding goes through the states and Gardner-Andrews has heard that two states have temporarily paused all of their SRF programs until they get greater clarity on if and how that money will be affected by the executive orders.
At this time, especially, it is important for stakeholders to stay engaged and call all of their congressional representatives, state governors and trade associations, Perconti said. “We are doing our best to separate the signal from the noise and really try to figure out what exactly the ramifications of these policies are,” he emphasized.
Perconti added, “Our goal right now is to make clear that the SRFs have been around a long time. They’ve always worked very well and EPA should continue successfully administering those dollars as we complete buildout of the infrastructure monies.”
Some clarity on the situation may emerge once Lee Zeldin, confirmed as EPA Administrator last week, has a team in place. But, at this point, it is difficult to assess what the potential effect of that may be, Gardner-Andews said.
The Association of Metropolitan Water Agencies said in a statement that currently there is no restriction on EPA continuing to send funding to recipients of water infrastructure grants and loans.
“What still remains in place is a separate executive order that temporarily freezes funding for programs that conflict with administration priorities, such as by promoting electric vehicle mandates or obstructing domestic energy development, but we do not believe that EPA’s water infrastructure funding programs will be affected by this [order],” the association said.
Worse than Before
Steve Via, government affairs director at the American Water Works Association, which represents water supply utilities, said that since the EPA is not communicating with outside parties, stakeholders should contact state primacy agencies that have a co-regulator role or fiduciary responsibility.
The Clean Water Act, Safe Drinking Water Act and revolving loan fund programs all pass through delegated primacy agencies, he said.
Via referred to Trump’s first term in 2017 when he also instructed EPA to freeze grants and contracts, a move that lasted about a week before it was lifted following the agency’s review of grants. EPA concluded that all was proceeding as usual and that there were no delays “including revolving grants to states and Native American tribes,” according to a Washington Post report at the time.
Perconti said he believes that this time around, the administration’s freeze is much more extensive. While programmatic reviews are not uncommon when a new president takes office, the recent action is on a much broader scale than before, he said.
“I think a lot of what happens here is going to come down to the courts on one side, and then on the other side, how fast the administration feels that it can complete the review in parallel,” he added.
