Budget proposal focuses on air and climate rules, cuts water grants

U.S. EPA would take a 12.6 percent funding cut under President Obama's budget request for fiscal 2012, which would shrink the amount of grants for state and local water projects while keeping money flowing toward enforcement and the new air pollution regulations that House Republicans are trying to starve of funding.

The president's budget would include $9 billion for EPA, down from the fiscal 2010 funding level of $10.3 billion that has remained in place for the first five months of fiscal 2011. The proposal, which is seeking $1 billion less than Obama requested for the agency in fiscal 2011, shows the wide divide between the White House and Republicans, who are hoping to slash EPA's budget by $3 billion and defund the agency's climate program.

House Appropriations Chairman Hal Rogers (R-Ky.) unveiled a proposal late Friday to slash the agency's 2011 budget to about $7.5 billion, part of a Republican plan to return spending to 2008 levels. EPA, which has been a target of intense criticism from conservatives under President Obama, bore the brunt of the proposed Republican replacement for the stopgap spending bill that will expire on March 4.

Though the Republicans want to pull funding from EPA's own operations, seeking to slow down the agency's work on regulations that industry groups have labeled as harmful to the economy, Obama's request focuses on cuts to grant programs, some of which were bolstered by stimulus funding over the past two years.

EPA's own operations have historically gotten about a third of the agency's budget with most of the remaining two-thirds going to state and local agencies that implement the federal rules. Of the $1.3 billion in funding cuts in the president's proposal, about $117 million would come from federal operations and the rest would mainly come from grants.


Two revolving funds that provide money for state water projects would see a $947 million cut from fiscal 2010 levels. An $80 million grant program for clean diesel projects would be eliminated. And as the White House had promised in a recent op-ed, the president's Great Lakes Restoration Initiative would lose $125 million from current funding levels.

The budget also scraps $167 million in water infrastructure funding, $157 million of which had been earmarked by members of Congress.

Meanwhile, the White House is seeking $24 million more in funding for federal enforcement than in the fiscal 2011 request. Those efforts would get $621 million, a 2.5 percent decrease from fiscal 2010 levels.

The biggest increase is an $85 million boost for categorical grants that state, local and tribal governments use to fund their own operations. State and local air quality agencies would receive $79.5 million more than they are getting at the fiscal 2010 funding level.

The total package of $306 million for those programs in fiscal 2012 would be "well above historical levels due to additional responsibilities associated with achieving more stringent air quality standards," the budget says.

State agencies have been bracing for cuts to the State Revolving Funds for clean water and drinking water projects, which were given a boost by the American Recovery and Reinvestment Act, said R. Steven Brown, executive director of the Environmental Council of the States. The $550 million cut to clean water grants and the $397 million cut to drinking water grants could cause some of those projects to be delayed by a year or two, but the increase in funding for agency air quality programs is good news, he said.

"The state budgets are so bad right now, and the president's proposal would really help," Brown said.

In the past, when EPA was asked to cut its budget, the agency would sometimes take all the money from state and local governments. Though states will still bear the heaviest load, today's request shows EPA is serious about tightening the belt on the federal side, Brown said.

"This time, the EPA would take 15 percent of the cuts," Brown said. "We don't get joy from that, but it does show that the agency understands there's going to have to be some shared pain."

Climate, air and water

Today's budget is short on details about EPA's climate and air rules, which are at the center of a political war on Capitol Hill.

The EPA budget request downplays the agency's efforts to curb greenhouse gas emissions, lumping in the climate program with other air quality programs for a combined ask of $471 million for fiscal 2012. That would be a 3.6 percent decrease compared with what the agency received for air quality programs in the first part of fiscal 2011.

On top of that, the agency's science and technology office would get $247 million for air and climate programs, up from $244 million in fiscal 2010. An undisclosed share of that money would go toward a new Air, Climate and Energy program that would "identify benefits for air and water quality associated with climate mitigation and adaptation choices to inform national and regional climate decisions."

EPA's water programs would be slashed 16 percent from estimated spending levels under the CR for fiscal 2011, down from $4.1 billion to $3.4 billion. When compared to the 2010 budget, the cut would be a more modest 3 percent drop from $3.5 billion. Spending on "healthy communities and ecosystems" would drop 15.5 percent, from an estimated $271 million in 2011 to $229 million.

In last year's budget request, EPA provided separate line items for its greenhouse gas rules, including $56 million for EPA to run the new programs and support state permitting operations. But the fiscal 2012 budget offered few breakout numbers related to climate change.

An unspecified sum would go to programs that would curb heat-trapping emissions linked to global warming through "cost-effective, non-regulatory programs while also pursuing regulatory options," the request says.

EPA recently started requiring large pollution sources to use the Best Available Control Technology for greenhouse gases and plans to draft additional rules in the next two years to limit emissions from power plants and refineries. The budget seeks $25 million to help states cover the cost of permitting under that program.

In fiscal 2012, the administration will also begin implementing a new program to cut emissions from cars and trucks.

While the climate rules have made the most headlines, states are also scrambling to follow new federal rules for conventional air pollution, such as the recently tightened air quality standards for nitrogen oxides and sulfur dioxide. Across the country, state budget woes have forced agencies to rely more heavily on the federal funding awarded through the categorical grants program.

That program would get $1.2 billion under the president's request. The Republican proposal for the rest of fiscal 2011 set down a marker by cutting $25 million for greenhouse gas permitting, but it would also cut $220 million from unspecified programs under the categorical grants program, said Bill Becker, executive director of the National Association of Clean Air Agencies.

Cutbacks that large could cripple the state agencies that are tasked with following federal rules, he said.

"If those cuts hit the air program any more, it's going to have huge and horrific repercussions on the abilities of states and localities," Becker said. "That's not only the ability to address greenhouse gas issues but also to clean up toxic air pollution, to write rules for our state implementation plans and to carry out the day-to-day responsibilities that Congress insists that we do under the Clean Air Act."

Today's budget request was Obama's first since Republicans gained control of the House, bringing with them a promise not only to cut spending but head off climate rules under the Clean Air Act. Tomorrow, the House is expected to vote on a fiscal 2011 spending bill that would do just that.

The continuing resolution, or CR, would fund the federal government through Oct. 1 with the stipulation that none of the funds can be used to craft or implement any climate regulations except the tailpipe emissions rules. The White House has suggested it might veto such a bill if it arrived at the president's desk, though the Democratic leadership of the Senate will be another obstacle for House Republicans.

Republican appropriators also proposed substantial cuts to EPA's budget for the remainder of the fiscal year, including a $107 million cut for a variety of programs related to carbon dioxide mitigation.

While the president's budget and the House CR set the stage for a months-long battle over federal funding for climate regulations, Obama's budget document says he hopes that lawmakers can find common ground on "forward-looking energy legislation that would spur U.S. development of advanced, clean energy technologies to reduce the Nation's dependence on oil, strengthen energy and national security, create new jobs and restore America's position as a global leader in efforts to mitigate climate change and address its consequences."

It says the president stands behind his 2009 commitment to cut U.S. greenhouse gas emissions 17 percent by 2020.

Reporter Paul Quinlan contributed.



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