The federal government undertakes substantial activities constructing and maintaining national water resources and infrastructure through the U.S. Army Corps of Engineers. These activities are primarily: maintaining navigable channels, reducing flood and storm damage, and restoring aquatic ecosystems. Corps activities are traditionally authorized every two years by Congress in Water Resources Development Acts (WRDAs) and funded annually in appropriations bills.
WRDAs are not typical reauthorization bills (required to continue ongoing agency functions), nor do they appropriate any funds to be spent. Instead, they authorize new activities in addition to previously authorized projects. They also require an appropriations act to provide funding for authorized projects, generally contained in the annual Energy and Water appropriations bill. Because WRDAs are not reauthorization or appropriations bills, there is no deadline for passage that must be met in order to continue normal Corps functions.
The last authorization was through the 2014 Water Resources Reform and Development Act, thus prompting leaders in Congress to push for a WRDA in 2016 in order to “[r]eturn to the two-year cycle of considering WRDA legislation.” Both the House and the Senate have introduced their own versions of WRDAs: H.R. 5303 and S. 2848. Both bills contain relatively few changes regarding WRDAs’ structure, and are largely focused on authorizations for new projects. However, the Senate bill contains substantive provisions in regards to drinking water infrastructure and environmental restoration through new activities housed in the Environmental Protection Agency (EPA) and other agencies. This Issue Brief details how Congress can best reform the WRDA and how the provisions in each of the bills address (or fail to address) these issues.
No Lame-Duck Consideration
First, lawmakers must contemplate the implications of considering far-reaching legislation at the end of an election year. Given the short timeframe between Congress’s return in September and the election in November, as well as the need to pass critical annual funding bills, it is unlikely that Congress will be able to comprehensively debate and vote on bills of lesser priority, such as the WRDA, before the election. Thus, Congress may be tempted to consider the WRDA during the lame-duck period following the election before the inauguration of the new President.
Congress should not consider any bills, including a WRDA, during this period due to the unaccountable nature of lawmakers in lame-duck sessions. As The Heritage Foundation notes, addressing meaningful legislation during this period effectively “undermines representative government by weakening the accountability link between the American people and their elected representatives.” Because the WRDA does not face a deadline in order to continue normal Corps functions, considering it during a lame-duck session would be especially egregious. Instead, Congress should consider the WRDA after the election and the instatement of the new Congress properly representing voters.
Necessary WRDA Reforms
Though the 2014 Water Resources Reform and Development Act contained some changes to the water resources funding process, Congress needs to take more substantial steps to reform water resources funding as well as the responsibilities of the Army Corps of Engineers. Congress should:
- Address Corps backlog and prioritize. The Corps has a project backlog of over 1,000 projects, with an estimated cost of completion of at least $62 billion. The Corps should undertake an aggressive de-authorization process to reduce the backlog and focus on projects that are truly national in scope. New authorizations should only be added following large-scale de-authorizations and a clear, demonstrated national justification for the new project. Requiring a two-to-one de-authorization-to-new-authorization ratio would be a good first step to addressing the backlog.
- Maintain fiscal accountability. The federal budget is increasingly dominated by mandatory programs, which do not require annual appropriations and thus lack sufficient oversight by Congress. Currently, mandatory spending accounts for 69 percent of the federal budget—a share that is projected to increase to 77 percent within 10 years. These programs are largely responsible for the unsustainable growth in federal spending. Congress must refrain from reclassifying any funding for water resources as mandatory in order to maintain accountability and fiscal responsibility.
- Restructure and refocus the Corps’ mission. Currently, harbor maintenance is funded by a 0.125 percent ad valorem tax levied on the value of a vessel’s cargo. These revenues do not reflect harbor maintenance needs and lead to cross-subsidies between net revenue-generating ports and those that are less economically viable. Eliminating the ad valorem tax and moving to a user-fee model based on the cost of maintenance would provide a more economical and less distortionary method of funding. The Corps likewise should phase out programs that are local in scope or improper use of federal dollars, such as beach nourishment and recreation site management activities.
- Force efficiencies and lower costs. Congress should require that Corps projects deliver twice as many benefits as costs, limiting the authorization of low-value and parochial activities. Likewise, the cost-share rules established in the 1986 WRDA should be maintained to limit the federal share of projects, thus incentivizing local sponsors to pursue economically viable projects.
Drinking Water and Environmental Provisions in S. 2848
In addition to typical WRDA provisions, the Senate bill contains substantial proposals meant to address drinking water infrastructure as a response to troubling water crises in places like Flint, Michigan. Though these terrible incidents should be addressed, they are best handled by state and local institutions, and not the federal government.
Title VII of the Senate bill, however, permanently expands the federal government’s role in funding local water infrastructure by establishing new programs and increasing funding levels for existing ones. It also authorizes various sums for the EPA to carry out environmental conservation activities. The Congressional Budget Office (CBO) projects that these provisions will cost more than $6 billion through 2021. Furthermore, the bill will result in $270 million in direct appropriations to the EPA and other agencies—an anomaly for an authorization bill.
Among other provisions, the CBO notes that the most significant provisions include the following authorizations for 2017 to 2021:
- $1.8 billion for the EPA to make grants to help municipalities pay for controlling sewer overflows and storm water discharges (Sec. 7201);
- $1.5 billion for the EPA to support the Great Lakes Restoration Initiative (Sec. 7611);
- $1.43 billion for the EPA to make grants to assist small and disadvantaged communities with the cost of complying with drinking water regulations (Sec. 7106);
- $500 million for the EPA to make grants to public water systems and other entities to develop innovative water technologies (Sec. 7304);
- $415 million for several federal agencies to perform ecological restoration activities in the Lake Tahoe Basin (Secs. 7621–7628);
- $325 million to support conservation and research activities for the Long Island Sound (Secs. 7631–7632);
- $300 million for the EPA to make grants to public water systems to fund projects, such as replacing service lines, that reduce lead in drinking water (Sec. 7107);
- $125 million for the EPA to provide technical assistance grants to small and medium water treatment works (Sec. 7202); and
- $100 million for the EPA to make grants to fund lead-testing programs in schools and child care centers (Sec. 7111).
Also notably, in order to administer the grants under Sec. 7303, S. 2848 creates a new dedicated Water Infrastructure Investment Trust Fund. The new trust fund is to be funded by a new “voluntary labeling system” that allows the producers of consumer goods to apply a label that states that they are contributing to the trust fund at a cost of 3 cents per unit. The bill’s committee report notes that this new trust fund is meant to be “supplemental” to existing programs, thus creating another layer of federal bureaucracy and a new fund through which dedicated revenues can be spent with little accountability. Furthermore, the nature of a federally administered “voluntary fee” on industry activities is dubious, and is susceptible to evolve into a mandatory tax.
Instead of creating a slew of new federal programs and increasing grant funding, Congress should work extensively with localities and water providers in order to provide necessary support through current programs and properly offset emergency funding. In addition, the federal government can lessen the regulatory load on local infrastructure and reduce costs by eliminating costly mandates, such as Davis–Bacon wage requirements, “Buy America” provisions, and extensive environmental review processes.
A Better Way for the WRDA
Neither the House nor Senate bills commit to making sweeping reforms to water resources funding that would improve accountability and limit waste. Though the House bill is more appropriately limited in scope and better adheres to fiscally responsible principles, more aggressive action is needed. Likewise, the additional provisions in the Senate bill permanently increase the federal government’s reach in funding local infrastructure and environmental conservation.
Instead of rushing to pass a flawed WRDA bill to maintain the semblance of regular order, Congress should work with the next President to develop a visionary WRDA bill that incorporates the structural reforms described to better serve taxpayers and the water resources needs of all Americans.
—Michael Sargent is a Research Associate in the Thomas A. Roe Institute for Economic Policy Studies, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation.