Trump's 2026 Budget Cuts: What Will They Mean For The Water Industry?
On May 2nd, a letter to Appropriations Committee Chair Susan Collins revealed that President Donald Trump’s budget proposal for FY2026 calls for a sweeping $4.2 billion in total funding reduction for the U.S. EPA. $2.46 billion of this will be taken from the Clean and Drinking Water State Revolving Funds, or SRFs — slashing 89% of the FY2025 funding.
The Clean Water SRF (CWSRF) program provides funding for water infrastructure projects such as stormwater runoff mitigation, decentralized wastewater treatment systems, and water reuse.
Similarly, the Drinking Water SRF (DWSRF) program is dedicated to supporting and protecting water supply projects. The DWSRF is designed to help communities finance the maintenance of safe drinking water — significantly, replacing aging pipelines. After the Lead and Copper Rule Improvements (LCRI) issued in October 2024, the importance of distribution system investment has become even more paramount.
The letter describes the FY2025 budget as “laden with spending contrary to the needs of ordinary working Americans… .” The Trump administration expects these budget cuts to generate trillions in savings over 10 years.
A driving force behind the administration’s proposal is its belief that many infrastructure projects should be funded by individual states. It maintains that the federal government has “intruded on matters best left to the levels of government closest to the people, who understand and respect the needs and desires of their communities far better than the Federal Government ever could.”
The proposed cuts have raised concerns among some environmental advocates. The National Association of Clean Water Agencies (NACWA) called the cuts “draconian” and wrote in a statement that it “strongly urges the White House to reconsider these cuts and take swift action to support greater investment in clean water.”
Banner Public Affairs worries that cutting water infrastructure funding “would have far-reaching economic consequences.” In a series of documents, Banner also included a state-by-state guide to the funding cuts.
The proposal still faces a battle in Congress, and whether it survives intact or is watered down by lawmakers remains to be seen.