From written testimony of witness appearing on behalf of AMWA at the House hearing yesterday, 2/24/26:
You can’t blame the witness. EPA WIFIA itself puts forth the standard narrative about ‘low-cost’ loans and job creation, but that’s boilerplate exaggeration for federal programs and likely to be understood by Congress in that light.
More harmful is the soundbite, also part of the standard narrative, that a ‘modest federal investment can support an exponential amount of direct credit assistance’. What Congressperson can resist this siren call? A trivial amount of budget authority somehow produces a large number of large-scale, high credit quality federal loans that deliver ‘savings’ and ‘jobs’ and ‘clean water’ and all the rest — like magic!
But it’s not magic. EPA WIFIA is in fact writing unhedged call options embedded in loan commitments. The cost is trivial — until it’s not:
Again, you can’t blame the witness or even the water lobbyist she’s representing — they’re all just doing their jobs. Or Congress. You could see at the hearing that a lot is going on in the US water infrastructure sector and the many federal programs and policies involved with it. No one has time to track down what might be actually happening at a relatively small loan program. Instead, they all rely — with complete justification — on official federal budget numbers for advocacy and policy decisions. The oft touted ‘100-1’ WIFIA leverage is indisputably based on official federal budget numbers for executed loan commitments and apportionments.
Of course, a few lobbyists, a few Congresspeople and probably more than a few finance staff at big water systems understand how WIFIA loans actually work. But it is not their job to question the official numbers and the narrative soundbites that accurately summarize those numbers for advocacy and policy purposes.
Well, whose job is it? Are they doing their job? Or is $2.1b in funding losses an indication that they might not be?