The House of Representatives has released a draft of the FY26 Interior-Environment appropriations bill, which includes proposals for federal water infrastructure appropriations in 2026. Of note, the draft bill calls for a 20% reduction to the Drinking Water State Revolving Fund (SRF) and a 26% reduction to the Clean Water SRF.
The draft appropriations bill would, however, preserve funding levels for the Water Infrastructure Finance and Innovation Act (WIFIA) loan program and other water infrastructure programs.
The SRFs revolve at the state level to provide local water utilities access to affordable financing and are bolstered through annual federal investment. Together, the two programs represent about a third of EPA’s annual budget.
The sizable cuts proposed to the SRFs in the draft bill confirm some of the anxiety hanging over the water sector in recent months, as cuts to federal water infrastructure dollars have been suggested through various means. In May, a White House FY2026 Budget Request proposed a 55% reduction in annual spending at the U.S. Environmental Protection Agency (EPA). The National Association of Clean Water Agencies (NACWA) said the White House budget proposal would cut the SRF’s annual funding by nearly 90 percent.
The Association of Metropolitan Water Agencies (AMWA), which represents large U.S. drinking water systems and has advocated for fully funding the DWSRF and other programs, commented on the draft bill in a press release.
“The Drinking Water State Revolving Fund is the backbone of federal infrastructure assistance for water systems, providing critical resources to help maintain compliance with drinking water standards,” AMWA CEO Tom Dobbins said. “While the House’s FY26 appropriations bill avoids the most extreme SRF cuts proposed in the president’s budget request, its 20 percent reduction to DWSRF funding would undoubtedly restrict water systems’ already strained budgets and ability to maintain current levels of service. AMWA supports fully funding the DWSRF but at a minimum, Congress should avoid any cuts in a final appropriations package.”
Dobbins added that while the cuts to the DWSRF program must be addressed, AMWA is grateful that the draft appropriations bill would preserve FY25 funding levels for WIFIA, as well as the Reducing Lead in Drinking Water grants and the Midsize and Large Drinking Water System Infrastructure Resilience and Sustainability Program.
According to AWWA executive director of government affairs Tracy Mehan, Congressionally Directed Spending is about half for the DWSRF and less than half for the CWSRF (in the 118th Congress, just over half of the combined SRF appropriations were diverted to drinking water and wastewater project earmarks – leaving 39 states with a net loss of federal water infrastructure funding).
It appeared in recent months, following multiple hearings in both House and Senate committees, that there was bipartisan support for reauthorizing the Drinking and Clean Water State Revolving Funds and WIFIA programs before the current authorization expiries next year. NACWA had said meetings with Senate EPW and House T&I Committees were productive and that the association was “optimistic” Congress would reauthorize the CWSRF.
The water sector now awaits a similar draft bill from the Senate Appropriations Committee. AMWA added that in recent years, the Senate has ultimately supported funding EPA and the SRFs at higher levels than House proposals.
Sources: AMWA, NACWA, AWWA, EPA
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