(CDX). The grant program assists states and tribes in evaluating their readiness to participate in the Exchange Network, enhances their efforts to complete necessary changes to their information management systems to facilitate Network participation, and supports state information integration efforts. The CDX is the focal point for securely receiving, translating, and forwarding data to EPA's systems—the electronic reporting gateway to the Agency's information network. This year the CDX will service 46 states and at least 2,000 private and local government entities. Ensuring Safe Food The President's request includes $119.0 million to help ensure that all Americans will continue to enjoy one of the safest and most affordable food supplies in the world. To do so, EPA will continue implementation of the Food Quality Protection Act (FQPA) which focuses on new science-driven policies for pesticides review, seeks to encourage the development of reduced risk pesticides that provide alternatives to older versions, and develop and deliver information on alternative pesticides/techniques and the best pest control practices to pesticide users. The Agency is also working to help farmers transition, without disrupting production, to safer pesticide substitutes and alternative farming practices. We will reassess existing tolerances to ensure food safety, especially for infants and children, and ensure that all registered pesticides meet current health standards. A Commitment to Reform and Results The President's proposed EPA budget for FY 2004 fully supports the Agency's work. The request demonstrates EPA's commitment to our principal objectives-safeguarding and restoring America's air, water, and land resources-by strengthening and refining our base environmental programs, fostering stronger partnerships, and enhancing strong science. As we look to the future, I am confident that this funding will ensure the Agency's fulfillment of our responsibilities to the American public. With that, Mr. Chairman and members of the Committee, my prepared statement is concluded. I would be pleased to answer any questions you may have. CLEAN WATER STATE REVOLVING FUND: GAP ANALYSIS Mr. WALSH. Thank you very much. I agree with you on about 90 percent of what you said, so I'll start with, typically, what we disagree on, and that's the Clean Water State Revolving Fund. As I mentioned in my opening remarks, I note that your budget request cuts the Clean Water State Revolving Fund to $850 million, a reduction of about a half-billion dollars. This reduction seems to have been made to provide the increases to other Agency programs while maintaining a budget request at the 2003 level. Congress has made it clear that the State Revolving Fund is a priority, particularly in light of the State's substantial need for water infrastructure financing. Last year, we commended you for a more realistic budget request for water infrastructure, but it appears that you have resorted to past practices of counting on Congress to restore these funds. Before we get into specifics of the request for the Clean Water SRF, I would like to commend you for taking the initiative to begin a dialogue on this issue. I understand that in January you sponsored a forum on Sustainable Clean Water Infrastructure and how to finance this need. I also want to recognize a study that your agency produced last September: The Clean Water and Drinking Water Infrastructure Gap Analysis. I understand that this study has generated much interest. As an aside, I would like to mention that the gap analysis notes that my State, New York, was home to the Nation's first sand filtration system to reduce turbidity in drinking water and the Nation's first wastewater filtration facility. It is no surprise that New York has been on the forefront of developing these technologies. The Agency's analysis estimates a 20-year average need for clean and drinking water capital costs to be over $600 billion. The clean water portion of that alone is $388 billion. Your analysis found that a significant funding gap will occur if the Nation's clean water and drinking water systems are funded at current rates, but that gap disappears if municipalities increase their own spending rate by 3 percent per year. One solution to the gap could be increased funding by our local partners. What did your analysis assume for the Federal funding share and would not any analysis of the funding gap assume the recent Federal level of about $1.3 billion annually? Ms. WHITMAN. Mr. Chairman, the analysis that we did was based on the commitments that have been made to the Fund. The projection at that time was that the Fund would stop being capitalized in 2005. That is why we have extended the funding of the CWSRF through 2011. The previous administration anticipated a revolving commitment at $2 billion, and this administration wants to see that increased to $2.8 billion. We have in the course of the forums and conferences that we have held, looked for a number of different ways to close the gap because, frankly, the gap is larger than, one Government entity, utilities or ratepayers, are going to be able to support on their own. One of a number of suggestions that came out of our forum included best management practices, watershed based trading, which we have proposed, water conservation, and full-cost water pricing. There are a number of different ways of addressing the infrastructure gap, and we are committed to continuing to work with all of our partners to find better ways, while still looking to fully support our programs. CLEAN WATER STATE REVOLVING FUND: FUNDING REDUCTION Mr. WALSH. With a budget reduction of $500 million, the assumptions that you made in the gap analysis are thrown askew. How do we plan to meet that gap by reducing the budget for Clean Water SRF by 40 percent? Ms. WHITMAN. Well, actually, when you capitalize the SRF through 2011, that brings the long-term revolving level to $2.8 billion, rather than $2 billion. Frankly, the SRF annual capitalization level, as important as money is in this, is not going to solve the infrastructure gap problem today. What is more important is to know that there is a certainty for the future and that the Fund is going to resolve at a higher level than had been originally anticipated. Mr. WALSH. I have been here too long. I do not trust 10-year estimates, I do not trust 5-year estimates, I do not even trust 2-year estimates. This is sort of the way we do our stimulus packages and our tax-cut package. All the pain is at the end, not at the beginning. I just do not know how we meet this without dealing with it in the present. Ms. WHITMAN. I would also note the additional dollars that we are putting into all of our other programs. I do not think you can look at this in an isolated way. You need to look at the overall funding that is going into the basic water programs that the Agency supports, and overall we are seeing a $55 million increase in those base programs. So we are supporting States and local Governments in a variety of ways. For this particular program the budget request is less than it was last year, but there are a number of other ways that we continue to support the local, State and Tribal Governments, and by extending the Clean Water State Revolving Fund we believe that we are still meeting those needs, as well as ensuring that we increase dollars in other programs so that there is more flexibility available at the State level. Mr. WALSH. Yes, I agree; by increasing funding and watershed protection, you can dramatically reduce the cost of water treatment. The New York City watershed is a great example of that, where they can forego spending several billion on water treatment and water filtration by protecting the watershed, protecting the source of the water. I think that is money well-spent. We are doing it in my home area on Skaneateles Lake, same thing. They provide water to Syracuse. It is high-quality water, but there are times when the lake becomes turbid from a rainstorm or a big snow melt that they go above the turbidity standards. So I think that is smart, but at the same time, this is sort of a game that has been played historically, too. The administration knows the Congress is going to put this money back in because they want that money more than these other programs, and then we have to scrimp on what you considered a priority or what OMB considered a priority so that we can meet ours. We will play the game again, but I just do not think it is very straightforward. These are very tight fiscal times, not only for us, but for States and localities. Is it reasonable to expect these municipalities will increase their funding every year by 3 percent? Ms. WHITMAN. I do not know that we can assume that at all, Mr. Chairman. And I know that is one of the reasons why we had the forum that we did and looked for ways, with our local and State partners, to improve management practices and identify a number of different ways in which we could improve on the way we are delivering our dollars and leveraging those dollars right now. We believe that efficiencies will help close the gap, but we have to recognize that this has to be a partnership in addressing this issue. It is not something that the Federal Government can do alone. State and local Governments, as well as utilities, are going to have to be part of that solution, and we need to work our way through to what is the equitable balance here. Last year the utility infrastructure investments were just over 2 percent over CPI. So, in fact, they are making a substantial investment now, so our assumption of 3 percent is not an unreasonable assumption. LAKE COOLING SYSTEM: CORNELL UNIVERSITY Mr. WALSH. Off of that for a second. Just a topic you may not be familiar with, and you may or you may have someone on your staff who is, but there have been a number of proposals in and around the Great Lakes to provide what is referred to as a Lake Cooling System, where you draw water from the depths of very deep, cold lakes, like Lake Ontario or, in the case of Cornell University, from Cayuga Lake. It is called the hypolimnia, and the water temperature is a constant between 35 and 40 degrees. They draw that water out, they run it through a system of pipes, and they chill air, and then the water is put back into the source of the water originally. Has EPA ever looked at these technologies, made comment on them or, in any way, discussed them or researched these projects? Ms. WHITMAN. Mr. Chairman, I can ask if Paul Gilman, who is our science adviser, to come to the table, and he can probably respond to that. Mr. GILMAN. Mr. Chairman, we have a very broad-based set of programs in this area. I cannot speak specifically to that one. They are research programs, and they are demonstration programs. One of our unique programs that you continue to support in the subcommittee here is a technology verification program that takes these emerging technologies and subjects them to a rigorous demonstration and validation that we then make available to the public for water companies and air-related technologies and for utilities to then evaluate for their own purposes. So we have a very broad-ranging both technology development and technology demonstration program, and I can look further into the specifics. Mr. WALSH. I know Cornell University went through the process I would be interested to see what sort of follow-on effects on the Ms. WHITMAN. We would be happy to get back to you for the [The information follows:] INFORMATION ON DEEP WATER COOLING In 1999, EPA conducted a review of the Cornell Lake Source Cooling project to |