President Obama's proposed 2013 budget drew heat for recommending cuts to loan programs intended to fix the nation's decrepit plumbing, now estimated to require more than a trillion dollars in repairs over the next 25 years.

U.S. EPA's Clean Water and Drinking Water State Revolving Funds -- state loan programs intended to finance sewer and potable water infrastructure repairs -- would be cut $353.9 million altogether, from $2.384 billion to $2.025 billion, or 15 percent.

That represents a return to 2006-2009 funding levels. Those programs received a significant boost from the federal stimulus, although experts say that shot of money only put a dent in the overall problem.

Even with the reduction, EPA said the funds will be able to finance $6 billion in wastewater and drinking water infrastructure projects annually.

"The reduced level will mean fewer water infrastructure projects," EPA noted in budget documents. "The EPA will work to target assistance to small and underserved communities with limited ability to repay loans, while maintaining state program integrity."

EPA also noted that a "a number of systems" could have access to capital through the Obama administration's proposed infrastructure bank, although that proposal has gained little traction in Congress.

The American Water Works Association is expected to announce in a report at the end of this month that the drinking water and sewer infrastructure upgrade and repair needs across the United States over the next 25 years have surpassed the staggering trillion-dollar mark.

"It'll be larger than that for water and wastewater, once our analysis is completed," said AWWA deputy executive director Tom Curtis. "Everybody agrees the needs are big, and I think most people now agree that the job of paying those costs will fall on American communities, utilities and their customers."

Curtis said the cuts "concern us greatly." "They are an important and effective program that should be increased in funding and not cut," he said.

Sen. Ben Cardin, the Maryland Democrat who chairs the Environment and Public Works Subcommittee on Water and Wildlife, called the budget "a balanced approach to tackling the long-term fiscal challenges facing the U.S."

But he added that he had "concerns" about the state revolving fund cuts.

"Our aging water infrastructure system poses risks for our local communities," Cardin said in a statement. "Investments in Chesapeake Bay restoration make good sense. We should be doing the same with our aging water infrastructure."

Cardin cited a widely circulated economic study that estimated that every $1 of public investment in water projects grows the economy by $6.35.

"We need to increase our investment to realize the economic benefits and the job opportunities associated with repairing and upgrading our water infrastructure," he said.

Adam Krantz, managing director of NACWA for government and public affairs, said his group was disappointed with the cuts to the revolving funds, which he said were "disproportionate."

At the same time, he added, federal funding will not be the "silver bullet" for utilities trying to meet the growing array of water regulatory requirements.

"It's time for a paradigm shift in how we deal with the Clean Water Act that allows municipalities to make smart, prioritized decisions based on affordability concerns, getting the greatest water quality and bang for the buck that they can," Krantz said.

In the House, Republicans leading the Transportation and Infrastructure Committee are expected to hold a hearing to examine financing options for water infrastructure needs. Legislation is expected to emerge from the Environment and Public Works Committee in the Senate, where water infrastructure investment drew bipartisan support in a recent hearing (E&E Daily, Dec. 14, 2011).