White House proposes significant cuts to EPA, SRFs in budget proposal

The Trump administration’s fiscal year 2027 budget proposal outlines significant changes to federal water infrastructure funding, including major reductions to State Revolving Funds (SRFs) and a shift in how Superfund cleanup activities are financed.

EPA and State Revolving Funds

According to the budget proposal, EPA discretionary budget authority woulkd witness a $4.6 billion cut which is a 52% decrease from the 2026 enacted level.

The proposal calls for more than $2.5 billion in savings from the Drinking Water and Clean Water State Revolving Funds, signaling a reduced federal role in financing water infrastructure. According to the document, the cuts are intended to “return the SRFs to their intended structure of funds revolving at the State level,” arguing that states should take greater responsibility for funding water projects.

The budget also points to previous funding through the Infrastructure Investment and Jobs Act as justification for scaling back federal contributions, noting that SRF programs have already received a “massive investment” in recent years.

In contrast, the proposal maintains core funding for EPA’s drinking water mission, allocating $122 million—an increase of $7 million from 2026—to support regulatory oversight, emergency response, and permitting activities. The budget also includes a $27 million boost for the Indian Reservation Drinking Water Program to improve access in tribal communities.

For hazardous site cleanup, the budget shifts reliance toward existing revenue streams for the Hazardous Substance Superfund. It states that funding will primarily come from industry taxes, litigation recoveries, and $290 million in appropriations, concluding that “there is no need for additional funding for Superfund cleanup.”

While the document does not explicitly detail new funding levels for the Water Infrastructure Finance and Innovation Act (WIFIA) program, it continues to position federal financing tools as part of a broader effort to streamline spending and reduce reliance on direct appropriations.

Overall, the proposal reflects a policy shift toward decentralizing water infrastructure funding, emphasizing state and local responsibility while maintaining targeted federal support for drinking water programs and contaminated site remediation.

How is the budget proposal signed into law?

1. Congress takes control of the process
The proposal is sent to both chambers of the U.S. Congress, where lawmakers review it but are not obligated to follow it. In practice, Congress often rewrites large portions.

2. Budget committees set overall spending targets
The House Budget Committee and Senate Budget Committee may draft a budget resolution, which sets top-line spending levels and priorities (though this step is sometimes skipped in modern cycles).

3. Appropriations process begins
The real decisions happen in the House Appropriations Committee and Senate Appropriations Committee. These committees break funding into 12 bills, including the Interior and Environment appropriations bill, which covers EPA and water programs like SRFs and WIFIA.

4. Subcommittees draft detailed funding bills
Specialized subcommittees write the actual legislation that determines how much money programs receive—and they often diverge significantly from the president’s proposal.

5. House and Senate pass their versions
Each chamber debates, amends, and votes on its own appropriations bills.

6. Reconciliation and final passage
Differences between House and Senate versions are negotiated, and a final bill is passed by both chambers.

7. Presidential signature (or veto)
The final legislation goes back to the president to be signed into law—or vetoed.