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Wastewater Loans, Diesel Retrofits Targeted in EPA Budget

Darren Samuelsohn, E&E Daily senior reporter

The Senate Appropriations Committee yesterday chopped $110 million from U.S. EPA's annual budget, including reductions for a popular wastewater loan program, diesel retrofits and state air quality monitoring.

Both Republicans and Democrats bemoaned the proposed cuts they were making to EPA, the Interior Department and U.S. Forest Service, but they said they were a necessity given the Senate's tight overall budget allocations.

"For most of the programs, the needs are almost limitless, but we had to live with tough choices," said Sen. Conrad Burns (R-Mont.), chairman of the Interior and Environment Appropriations Subcommittee, at the start of the markup.

Under the EPA budget, the low-interest Clean Water State Revolving Loan Fund received the same $688 million infusion President Bush requested and the House last month approved. Bush and Congress have consistently cut the wastewater program since allowing it to reach an all-time high of $1.35 billion in fiscal 2003.

"It's another in a string of disappointments," said Lee Garrigan, legislative affairs director for the wastewater industry's National Association of Clean Water Agencies. Garrigan said she was hopeful Congress would authorize a long-term trust fund for wastewater projects to avoid her industry's competitive dash for discretionary funding.

Another EPA program hit with budget cuts was a diesel retrofit program for school buses, construction equipment and other on and off-road engines. The Senate panel approved $20 million, the lowest total yet for the program compared with the House's $28 million mark and Bush's $50 million request.

Bill Becker, head of two associations representing state and local air pollution officials, said the cuts will hamper emission reduction efforts. "This is one of the most effective ways to clean up the air to reduce air pollution," Becker said in an interview earlier this week on E&ETV's OnPoint. "And these are very cost effective measures that states and localities support."

Becker yesterday said he also was troubled with the Senate panel's decision to cut $20 million from air pollution grants that go toward monitoring and personnel. The House has already agreed to fund the Clean Air Act programs at the same $220 million level, while Bush requested $185 million.

EPA's Drinking Water State Revolving Loan Fund fared well compared to other parts of the agency budget as Senate appropriators approved $842 million -- the same level as Bush's request and $4 million above fiscal 2006 levels.

The full panel gave voice vote approval to EPA's overall budget of $7.529 billion. Senate floor action will have to wait at least until next month, when Congress has three weeks of legislative business scheduled before embarking on a monthlong summer break in August.

Overall, EPA's budget is all but guaranteed a net cut from current funding levels once negotiations are complete with the House. That is because the House adopted a $7.569 billion EPA spending bill and Bush requested $7.315 billion -- both of which are below EPA's $7.625 billion fiscal 2006 level.

No arsenic enforcement moratorium
During yesterday's markup, Sen. Larry Craig (R-Idaho) said he would not use the EPA spending bill as a vehicle to impose a one-year moratorium on civil penalties against the small communities that fail to comply with new standards for arsenic in drinking water.

Craig instead added an amendment that would provide $11 million for research and development of new technologies that can take the harmful but naturally occuring substance out of Western water supplies.

"We're out at the edge of science," Craig said. He warned that communities should not be penalized for failing to comply with a standard when no technology is available to help them meet it.

Sens. Dick Durbin (D-Ill.) and Mary Landrieu (D-La.) backed Craig's decision to change his amendment from an enforcement moratorium, but both also highlighted more than $600 million in cuts over the last five years to EPA's Clean Water State Revolving Loan Fund -- which provides low-interest loans to help water systems comply with federal regulations.

Mike Keegan, an analyst with the National Rural Water Association, said the amendment "provides an opportunity to develop consensus" around communities' efforts to meet the arsenic standard. The agreement among senators on the need to assist rural communities is encouraging. "They will be able to clarify language on the moratorium when it hits the Senate floor," he said.

Speaking to reporters, Craig insisted he could muster the votes on the Senate floor to impose a moratorium on EPA enforcement. But the senator said he wanted to hear more about how the $11 million would assist in technology development before taking the extra, more controversial step.

"If I don't have to, I won't" offer a moratorium amendment, Craig said.

Bond leaves EPA budget free of rider
Also yesterday, Sen. Kit Bond (R-Mo.) showed no sign he would try to block new EPA or California regulations to limit air pollution from lawnmowers and other small engines.

Bond had threatened to add his third legislative "rider" to the agency spending bill in five years on the engine issue. But Republican aides said Bond made no move to add the language.

In 2003 and again last year, Bond tried to slow the engine-rulemaking process. The first time, Bond stripped states of the right to follow California's lead in setting tight new limits. He followed last year by requiring EPA to study the potential safety risks that come with adding catalytic converters to the engines.

EPA earlier this year found no fire risks exist from the pollution control technologies. But Bond, whose home state includes several plants of the nation's largest small enginemaker, Briggs & Stratton, questioned the integrity of the study and threatened further legislative holds.

California is going forward with its small engine regulations and needs an EPA waiver so it can enforce the rules. EPA held a hearing in Washington yesterday on the state's request for an enforcement waiver.

EPA has not spelled out a firm timeline for new engine standards for the rest of the country. Even so, environmentalists welcomed news Bond would monitor EPA's efforts but would not try now to stop it.

"It's a huge victory for California breathers and should pave the way for cleaner national standards," said Frank O'Donnell, head of the advocacy group Clean Air Watch.

Staff writer David Loos contributed to this report.