Download PDF, including InRecap comments 02112026
As a follow-on to the prior post, here we’ll look at OpenOMB’s reports on the EPA WIFIA Direct Financing account apportionments.
Lending Authority
The Financing account is where overall legal lending authority granted by spending bills is apportioned for specific loans, and subsidy from the Program account is also apportioned for specific loans.
Lending authority is not mysterious. It seems OMB apportions a chunk, generally $3b, at a time. Since in theory WIFIA has been getting annual appropriated subsidy amounts to lend about $6b per year (not even counting carryovers), it would seem that OMB can ‘top up’ the apportioned amount within the fiscal year, if necessary (which it hasn’t been recently). This ‘budget authority’ is then apportioned to specific loans at some stage in the approval process in that fiscal year. Lots of minor adjustments, as you’d expect, including a $222m ‘downward re-estimate’, which I think probably relates to cancellations of prior loan apportionments of lending authority.
Subsidy Apportionments
The subsidy apportionments, which appear in dense footnotes, are a lot more interesting. For some reason, the footnotes in earlier FY22 reports go all the way back to the start of the program in FY218, we have the complete set FY18-FYTD26 for subsidy apportionments for all WIFIA’s loan commitments, including those expected to close soon. The total apportioned amount is $185m of credit subsidy for $25.9b in loan commitments across 155 loans, of which $23b in amount and 149 loans have been executed to date. The weighted average subsidy apportioned FY18-FYTD26 is about 0.71% of loan commitment amount, well below the 1.0% number that’s often cited as shorthand for the low taxpayer cost of WIFIA loans (e.g., the lobbyists’ ‘100-1’ ratio).
Here’s the data by range of subsidy amount and number of loans:
As expected, the biggest group by far is borrowers in the 0.31%-0.60% subsidy range, corresponding roughly to Aa3/AA- credit quality. This level of credit rating is typical for most public water systems in the US.
Putting the volume per range in a pie chart shows who the WIFIA program is really meant for, regardless of all the ‘narrative’. 75% of the loans are in very low risk credit categories, indicating not only low-risk borrowers but fairly straightforward water revenue bond-type loan structures. The next 18% or so probably includes low-risk borrowers but maybe some slight idiosyncrasies in loan structure that add a tiny bit of risk. Less than 10% goes to loans that, although still highly creditworthy (per WIFIA’s investment-grade eligibility requirement), might be tough to cost-effectively place in the bond or other private market (project financing, private-sector ownership, unusual project type, complex security structure, etc.).
In other words, about 90% of WIFIA loans probably don’t have any real-world impact on US water infrastructure improvement, since such low-risk, mostly vanilla loans could be easily and cost-effectively placed elsewhere. Instead, most loans simply provide off-budget transfer payments (primarily through ‘free’ interest rate management options embedded in loan terms) to borrowers. Less than 10% might have a real policy outcome in terms of project feasibility or acceleration.
OMB calculates and approves WIFIA loan subsidies apportionments. OMB also presumably checks WIFIA compliance with their own Circular A-129 requirements each year. Why no cognitive dissonance? Willful disregard? Some sort of ideological agenda held by ‘Deep State’ bureaucrats and fostered by lobbyists? Or did they just not GAF?