• Increase funding for water infrastructure system improvements and associated operations through a comprehensive program;
  • Create a Water Infrastructure Trust Fund to finance the national shortfall in funding of infrastructure systems under the Clean Water Act and the Safe Drinking Water Act, including stormwater management and other projects designed to improve the nation's water quality;
  • Retain traditional financing mechanisms, such as appropriations from general treasury funds, issuance of revenue bonds and tax exempt financing at state and local levels, public-private partnerships, state infrastructure banks, and user fees on certain consumer products;
  • Expand innovative financing mechanisms, including broad-based environmental restoration taxes.


Since 1972, Congress has directly invested more than $77 billion in the construction of publicly owned treatment works and their related facilities. State and local governments have spent billions more over the years. Total nonfederal spending on sewer and water between 1991 and 2005 was $841 billion. Nevertheless, the physical condition of many of the nation's 16,000 wastewater treatment systems is poor due to a lack of investment in plants, equipment, and other capital improvements over the years.

In 2008, the U.S. Environmental Protection Agency (EPA) reported that the total investment needs of America's publicly owned treatment works as of January 1, 2004, were $202.5 billion. This reflects an increase of $16.1 billion (8.6%) since the previous analysis was published in January 2004. 2

In 2002, the Congressional Budget Office (CBO) estimated that for the years 2000 to 2019, annual costs for investment would need to be between $13 billion and $20.9 billion for wastewater systems. 4

Many systems have reached the end of their useful design lives. Older systems are plagued by chronic overflows during major rainstorms and heavy snowmelt and are bringing about the discharge of raw sewage into U.S. surface waters. The EPA estimated in August 2004 that the volume of combined sewer overflows discharged nationwide is 850 billion gallons per year. Sanitary sewer overflows, caused by blocked or broken pipes, result in the release of as much as 10 billion gallons of raw sewage yearly, according to the EPA. 2

Federal funding under the Clean Water Act State Revolving Loan Fund (SRF) program has remained flat for more than a decade. Federal assistance has not kept pace with the needs, yet virtually every authority agrees that funding needs remain very high: the United States must invest an additional $181 billion for all types of sewage treatment projects eligible for funding under the Act, according to the most recent needs survey estimate by the EPA and the states, completed in August 2003. 4

In September 2002, the EPA released a detailed gap analysis, which assessed the difference between current spending for wastewater infrastructure and total funding needs. The EPA Gap Analysis estimated that over the next two decades the United States must spend nearly $390 billion to replace existing wastewater infrastructure systems and build new ones (the total includes money for some projects not currently eligible for federal funds, such as system replacement, which are not reflected in the EPA State Needs Survey). 5

According to the Gap Analysis, if there is no increase in investment, there will be a roughly $6-billion gap between current annual capital expenditures for wastewater treatment ($13 billion annually) and projected spending needs. The study also estimated that if wastewater spending increases by only 3% per year, the gap would shrink by nearly 90% (to about $1 billion annually).

The CBO released its own gap analysis in 2002, in which it determined that the gap for wastewater ranges from $23 billion to $37 billion annually, depending on various financial and accounting variables. 4


Construction, operation and maintenance, and reconstitution of service of wastewater infrastructure is expensive, and the monetary and societal costs incurred when this infrastructure fails are high. Aging, underdesigned, or inadequately maintained systems discharge billions of gallons of untreated wastewater into U.S. surface waters each year.

The nation’s wastewater systems are not resilient in terms of current ability to properly fund and maintain, prevent failure, or reconstitute services.  Additionally, the interdependence on the energy sector contributes to the lack of system resilience that is increasingly being addressed through the construction of dedicated emergency power generation at key wastewater utility facilities. 

Future investments must focus on updating or replacing existing systems as well as building new ones to meet increasing demand; on improved operations processes, including ongoing oversight, evaluation, and asset management on a system wide basis; and watershed approaches to look more broadly at water resources in a coordinated systematic way.


If the nation fails to meet the investment needs of the next 20 years, it risks reversing public health, environmental, and economic gains of the past three decades.

The case for increased federal investment is compelling. Needs are large and unprecedented; in many locations, local sources cannot be expected to meet this challenge alone and, because waters are shared across local and state boundaries, the benefits of federal help will be disseminated throughout the nation. Clean and safe water is no less a national priority than are national defense, an adequate system of interstate highways, and a safe and efficient aviation system. Many other highly important infrastructure programs enjoy sustainable, long-term sources of federal backing, often through the use of dedicated trust funds; under current policy, water and wastewater infrastructure do not.


Design Life of Water Systems

Components Years of design life
Collections 80–100
Treatment Plants—Concrete Structures 50
Treatment Plants—Mechanical and Electrical 15–25
Force Mains 25
Pumping Stations—Concrete Structures 50
Pumping Stations—Mechanical and Electrical 15
Interceptors 90–100

SOURCE Clean Water and Drinking Water Infrastructure
Gap Analysis Report, p. 11, EPA 816-R-02-020, September 2002


  1. U.S. Conference of Mayors, Who Pays for the Water Pipes, Pumps and Treatment Works? -
  2. Local Government Expenditures on Sewer and Water (1991-2005), 2007, .
  3. U.S. Environmental Protection Agency, Clean Watersheds Needs Survey 2004 Report to Congress, January 2008, .
  4. U.S. Environmental Protection Agency, Clean Watersheds Needs Survey 2000 Report to Congress, January 2004, .
  5. Congressional Budget Office, Future Investment in Drinking Water and Wastewater Infrastructure, May 2002, .
  6. U.S. Environmental Protection Agency, The Clean Water and Drinking Water Infrastructure Gap Analysis, September 2002, .
  7. G. Tracy Mehan, Testimony before the Subcommittee on Water Resources and Environment, U.S. House Transportation and Infrastructure Committee, February 2009,