The government shutdown ended last week after 43 days, the longest in U.S. history. To open federal doors, Congress passed a three‑bill “minibus” that includes funding for Agriculture-FDA, the Legislative Branch, and Military Construction–Veterans Affairs, alongside a continuing appropriations bill, extending temporary funding for all other agencies through January 30, 2026.
There is a mix of funding appropriated and cut for water throughout the minibus. Within the Agriculture–FDA bill, funding for USDA’s climate hubs was slashed. First established in 2014 to help farmers adopt climate-smart agricultural practices, these ten regional hubs have provided critical research and data for over a decade. Conversely, the bill maintained $903 million for conservation programs, a shift from the Trump administration’s proposal to cut them significantly. It also directs about $1.4 billion for aging water and wastewater infrastructure, $50 million for USDA’s Watershed and Flood Prevention Operations, $3 million for the rehabilitation of dam infrastructure, and $10 million for irrigation modernization.
In addition to the annual budgets established by the minibus, the attached continuing resolution funds the rest of the government through the end of January, reversing the layoffs implemented during the shutdown and providing stopgaps for key programs like the National Flood Insurance Program.
Next, Congress must pass a full budget for fiscal year 2026. This appropriation process will determine the level of funding for water infrastructure, particularly for the Clean Water and Drinking Water State Revolving Funds (SRFs). The SRFs provide low‑interest loans to states and municipalities for drinking water and wastewater projects. Together, they received $8.9 billion in 2025 from a mix of Infrastructure Investment and Jobs Act (IIJA) supplemental funding and base appropriations, making them the most significant annual federal water infrastructure investment. The House and Senate have each proposed conflicting funding plans for these programs next year.
The House FY2026 budget proposes steep reductions to the EPA and the SRFs. It cuts EPA’s budget by 23% (about $2.12 billion) and proposes similarly steep cuts to the Drinking Water and Clean Water SRF base appropriations. Specifically, if passed, funding for drinking water (DWSRF) would fall by $231 million or 20 percent compared to 2025, and funding for wastewater infrastructure (CWSRF) by $431 million or 26 percent. In total, baseline SRF funding would decline to $2.1 billion, a reduction of more than $660 million. These cuts are smaller than what was proposed in Trump’s 2026 budget, which sought to nearly eliminate the program with a 90 percent budget cut, but still significant.
By contrast, the Senate FY2026 budget maintains level funding for SRFs. The Senate bill, approved with bipartisan support, keeps the Drinking Water SRF at $1.126 billion and the Clean Water SRF at $1.64 billion, for a combined total of $2.76 billion, equal to FY2025 levels.
Congress must reconcile these differences and pass a FY2026 budget for the EPA before the continuing resolution expires on January 30, 2026. The outcome will determine whether communities continue to receive robust federal support for clean water or face constrained resources under a leaner budget.
