EPA's FY 1995 budget totals $5.731 billion. This figure includes $1.510 billion in rescissions enacted by the 104th Congress in the spring of 1995. Originally appropriated FY 1995 budget authority for EPA was $7.241 billion. The largest share of the rescission ($1.302 billion) was taken out of EPA's Water Infrastructure Financing program, which also represents the largest single element of the agency's budget. In the current budget, Water Infrastructure Financing represents 29 percent of EPA's total budget; prior to the rescission, it constituted 41 percent of EPA's budget. The upper portion of Table 1 shows EPA's FY 1995 budget by function, providing one view of its program priorities. (NOTE: All tables and charts are found at the end of this paper.)

As noted above, nearly a third of the agency's budget (down from two-fifths prior to the rescission) is devoted to the Water Infrastructure Financing program which provides support to state and local governments for construction and improvement projects to help meet water quality standards and ensure drinking water safety. The Clean Water State Revolving Fund awards grants to state programs that provide low cost financing to municipalities for sewage treatment projects. The Drinking Water State Revolving Fund offers loans to help governments improve their drinking water systems.

Second to Water Infrastructure in EPA's FY 1995 budget is the "Abatement, Control and Compliance" line under which EPA funds contracts, grants, and cooperative agreements for pollution abatement, control and compliance activities, as well administrative activities, including regulatory enforcement. These programs represent nearly one-fourth of EPA's current funding, a total of $1.405 billion.

Superfund, at $1.331 billion, is EPA's third major budget element in FY 1995, representing 23 percent or almost a quarter of total spending. This program is responsible for cleanup of hazardous waste sites and associated activities. Together, the three top program areas account for more than three-quarters of EPA's budget.

The "Research and Development" line, $335 million in FY 1995, represents less than 6 percent of EPA's budget. This is somewhat misleading, however. The R&D appropriations account finances mainly extramural research through grants, contracts, and cooperative agreements with industry, universities, nonprofits, and other federal agencies, as well as some in-house activities. The costs of most in-house R&D (including personnel and related costs) are funded through the "Program and Research Operations" account, and some is included in "Abatement, Control and Compliance.'' In addition, nearly $70 million of R&D is supported through Superfund and smaller amounts of R&D are supported under two other trust funds. Thus, EPA's total R&D in FY 1995 is estimated at $600 million, representing about 10.5 percent of the agency's budget. This is discussed in more detail below.