that and ask others to do the same. let me thank you, administrator, for coming forward today with your budget and thank you for all that you do for our country. as the president has said now for years and i'm sure he tells all of you this every day that we've got to make some tough choices. we've got to make tough choices in our budgets and clearly you have given us today a budget that in my opinion seeks to protect our communities and promote sound science. so i support your efforts. and i believe in what you're doing to say the least. however, on a brief note, i am a little concerned about the impact to critical infrastructure. that will be caused by the from state resolving funds. the drinking water state revolving fund mr. waxman spoke to that earlier has provided states with the authority to give extra assistance in the

form of extended loan terms and low are interest rates or principal forgiveness to disadvantaged communities and i live in a disadvantaged community and you know that very well. because of that the srf has been an essential source of financing for small and disadvantaged community, water systems that are unable to finance infrastructure projects at market rates. but until the passage of recovery act, states had complete discretion to decide whether to exercise their authority and provide disadvantaged communities with such assistance. 14 states had decided not to provide the assistance. an additional six states reserve less than 4% of their funds over the life of the program for these disadvantaged communities. recovery act funding of the srf made a significant difference for millions of americans and you know that record very well. in fact, according to epa, recovery act funds provided through the drinking water srf

brought 693 drinking water assistance serving over 48 million americans back into compliance with the safe drinking water act standards. 48 million americans got safer water and at the same time good paying construction jobs were created. there is still -- there is still a significant need for this funding to improve drinking water quality and spur job growth. these cuts will be hard on all water systems but particularly small and underserved communities who need the funding the most. question -- the budget in brief expresses the intent of the administration to target srf assistance to small and underserved communities. how will you do that? >> it will require us to work with the states, as you know, mr. butterfield. and thank you for your comments. i agree that the recovery act changed the world for certain communities and we don't have the same legal authority to direct money. it goes through the states. we'll have to work through the states to change the prioritization system.

we'll do that collaboratively but in a time decreasing resource, we have to look at the system which really could not through rate increases or any other way finance these infrastructure improvements. >> in the last congress this committee passed bipartisan legislation to reauthorize the srf. that legislation would have required states to provide some additional assistance to disadvantaged communities. unfortunately that bill did not become law. states once again have discretion to choose not to provide special assistance to small and rural systems and cuts in srf funding may discourage states from providing that assistance because returns on loans made by state funds will become more important. second question. do you foresee these cuts to the srf having an impact on the amount of assistance states make available to small and underserved communities? >> it likely will, sir. in all honesty. they are revolving funds so the amount a state has available in

any given year depends what loans are repaid so how much of the principal they're getting back. but less money, we believe, will potentially impact their ability to make these loans and/or grants. >> mr. chairman, i see the amber light on. i suppose that means we're winding down so i'm going to yield back the remainder of my time. >> thank you, mr. butterfield. this time i recognize the gentleman from ohio for five minutes of questions. >> thank you, mr. chairman and administrator. thanks for being with us today. i'd like to talk about ozone for a little bit here. in your fiscal year 2013 budget looking down the road, do you intend to propose division for the national air quality standard for ozone? if not in 2013, what's the epa's current schedule? >> the current schedule is to make a proposal in calendar year 2013, probably toward the end of

the calendar year. i believe that's fiscal year 2014. >> let me ask this, then. does the epa propose to expect a rule similar to the rule that was withdrawn last year? >> i can't speak to what we'll do in the end of 2013. we're waiting on the science. as you know, we have to wait for a scientific review. >> it's very, very important. with the rule that was proposed last year and withdrawn, the estimated cost between $19 billion and $90 billion annually. in a state like ohio, we would have had a great number of counties go into noncompliance. so when you're considering these standard, it's very, very important people like me who represent 55,000 manufacturing jobs, which is the largest in the state and the largest number of manufacturing jobs on this committee. we have to have some idea what that sticker price is going to be out there. when i'm home, one of the things

i hear from my constituents is what's happening here, especially with the epa is the number one driver of the cost of them back home. but you have no idea where you're going to be going with that at this time? >> i can't speak to that. it's proposed, we take public comment on it. there will be ample opportunity for folks to see it, comment and offer -- >> let me switch gears a little bit then. in looking at your budget it says you plan to spend another $80 million in enforcing environmental laws. it raises a couple questions. one is where does the money go that the epa collects in fines? >> fine money goes into the treasury, sir. >> goes right back to the treasury, okay. >> let me go back to where dr. burgess was if i could go back to the question about the reuse of deobligated funds. and i assume that as you're here

today really for our benefit, your benefit that there's total transparency in the budget planning and that we need to have the epa in your plans and in your spending. the gao testified before this committee that epa reuses a sizable amount of funds that has deobligated from past years but does not report this reuse in its budget justifications. in 2010 it reported reuse of funds of $160 million more than the epa's spending cuts proposal this year. at present since the epa is not reporting how much money it plans to reobligation and use next year, were you aware the epa was not reporting this information? >> i'm sorry, sir. i was trying to get background. please forgive me. we do report our deobligations in our financial statements. i'm happy to take a look at the issue. but when we deobligate money, obviously we're reporting that.

>> what the gao was telling us, especially with the reuse of these funds being reported to congress, the epa budget justifications, that's supposed to be reported. if could you get back to us on written comment, i'd really appreciate that. >> yes, sir. i believe they're reported in our financial reports but we're happy to get back to you. >> again, switching gears real quick here, i see the clock and i'm trying to be cognizant and help the chairman -- >> the yellow light comes on, you have a minute left. >> i understand. time is running down. do you know how much of the money that is granted -- that is grant money for states that have not yet been distributed? any idea on that money? >> there are large unobligated balances and unliquidated balances.

there are two different things in the state revolving funds. the states, we give them money once a year. i think on time to the states. how quickly they draw that money down. >> do you have any idea how much money was budgeted for state grants? >> there's a number of grants. the state revolving funds are about $2 billion. we have the categorical grants, which are $1.2 billion. about 40% of our budget goes to state and travel grants. >> thank you very much. mr. chairman my time is expired and i yield back. >> at this time i recognize the gentlelady from colorado. >> thank you so much, mr. chairman. administrator, thank you for coming here to talk to us. as you know and there's been little discussion about this, we've had great advances in horizontal drilling and

hydraulic fracturing over the last few years which has enabled to us have oil and gas production in many, many new areas of the united states. and as a consequence, many of us have been hearing from our constituents about issues like impacts on the air, water and soil quality of hydraulic fracturing and they want to know whether the local and federal laws and regulations are sufficient to protect their families. and so i want to focus my questioning on the funds proposed if the epa's fiscal year 2013 budget for understanding and minimizing potential environmental health and safety impacts of this really promising shale gas development. so if you can keep your answers brief, i'd appreciate it. i've got a lot of questions. the first question is do we know for certain whether or not shale gas development through hydraulic fracturing poses an increased risk over risk associated with conventional oil and gas development? >> not for certain. that's why we're doing the studies. >> thank you. >> is it known for certain

whether or not shale gas development through hydraulic fracturing poses no risk to the environment or to health? >> no, same answer. that's why we're studying it. >> and so what you're doing, you remember to the study an objective sign based understanding of the potential risk is really going to be the first step for congress to figure out how we can develop unconventional shale gas resources. so last year as you know congressman henchy and i requested the e pa to do a study to determine the potential impacts of hydraulic fracturing on drinking water. now due to the extent and complexity of these studies, the epa established quality assurance plans to ensure the validity of the data, is that correct? >> that's correct. >> the study is currently under way with report of preliminary findings due at this year and another one in 2014, is that correct? >> correct. >> under your new budget

request, the current study will be expanded to address the broader environmental impact of hydraulic fracturing, including ecological, to minimize any negative impacts not just the chemical component of the fracking fluid, is that right? >> there may be additional studies. >> and you need to do that -- >> air quality, water quality, ecosystem impacts are of concern. >> now, can you comment briefly on the scientific review process for the extended effort that you're talking about, administrator jackson? >> obviously we'd be scoping it and it's contingent on getting the money in the budget. we'd work with the department of internal to scope studies that are not redundant and they'd do some, as well. and we'd look for the same level of rigor. >> thank you. mr. murphy asked to you the cost of the study and i want to give some clarification to those

numbers. the epa budget request as total of $14 million dedicated to studying shale gas development through hydraulic fracturing, is that correct? >> that's correct. >> of that, $6 million is dedicated to completing the reports promised for 2012 and 2014, is that correct? >> i believe that's correct as well. >> and then the $8 million increase will go toward what you just described, better understanding the ecological effects of waste water discharge and the potential impacts on air quality results from hydraulic fracturing, is that correct? >> that's correct. >> i want to point out the total funding of $14 million for the hydraulic fracturing studies comprises 0.169% of epa's fiscal year 2013 budget. the $14 million is epa's contribution to a coordinated $45 million effort between the epa, the department of energy and the u.s. geological service, is that correct? >> that's correct. >> now, can you explain the benefits of coordinating the

effort between the usgs and the doe? >> we have overlapping responsibilities but we also don't want to be stovepiped. we want to ensure we're only doing one study to address one issue so we're not doing redundant studies and make sure we're looking at issues collaboratively so we look across the field and are more universal in scope. >> thank you. mr. chairman with respect to hydraulic fracturing, this is something -- we have all these new advances in the way that we're doing oil and gas exploration and certainly for a state like colorado, it can be very, very positive for domestic energy production and for our economy. but we really don't have a lot of data on the environmental effects of hydraulic fracturing because while the technique has been around for a long time, these new ways that they're doing are brand new. and so i really think that this study is important and i would

just continue to urge your administrators to make sure that the studies that the agency conducts are done with the highest degrees of scientific standard and impartiality. thank you. i yield back. >> this time i recognize the gentleman from mississippi. mr. harper for five minutes. >> administrator jackson and welcome. good news, you're almost done. i think we're getting close. you've been very patient. i appreciate your attendance here and your insight as we look at these issues. one of the things that's very important to my state and my district certainly are the technical assistance grant program that the chairman has referred to earlier. i had filed a bill on that. some of the language that's in there is of great importance to our state as we look at that and how it affects small communities. and what all i want to do is

make sure i think just follow up on what he said, which was to make sure that the criteria that is set forth by the epa actually tracks that appropriations language and we're covering all those bases. your agreement as i understood it would be to work with him and check with him to be sure -- >> this on the rural water -- >> yes. >> just want to take a double-check to make sure we're in compliance with that language. >> i believe this is a budget hearing. i know we've talked about many other things and things that are here and glad to have you here, too, miss bennett, as we look at these figures. these are difficult times as you know. as we look at this and i know you discussed tough choices and things that have to be done, but

when you look at the overall budget on, this it's difficult for people across the country to say that we've done all that we can on tough choices when the overall budget cut i'm showing is only 1.2%. is that the correct figure? i'm showing the budget for this year is 8.344 billion, which is $105 million below the 2012 figure. i want to make sure i'm using the correct figures. is that right? >> yes, sir. but i'd be remiss -- we took a 13% cut in 2011, 2.6 in 2012 so now this is the 1.8. you're correct. >> 1.2. >> i'm sorry, 1.2. >> i know we have approximately 17,000 employees. has there been a reduction or increase in the epa workforce? >> it's essentially static. we've had small increases but we've had no -- excuse me, my

cfo tells me that we are down this year from 2012. >> all right. you know you said ten regions across the country, are you looking at ways to perhaps consolidate, redirect the mission to where you don't lose what you consider to be effective but you continue to look at ways to save money? >> yes, sir. i can assure you we've looked at we remain effective. each one of those regional offices deals with several states and those relationships tend to be extremely important. >> you know, we're -- the environmental education grants, how much is in the budget for that? are you able to tell me that? >> in the president's 2013 proposal, we've propose to zero out environmental grant funding. i can grab you the number. >> but you expect in this it's zeroed out? >> yes. many of the programs do

education as a component of what they're doing already. so those grants we are not proposing to fund this year. >> it's unfortunate sometimes when we come in here and when there's a discussion on issues it seems to be particularly from some of my friends across the aisle they want to in effect trash the other party, trash the republicans. i think it's pretty clear that everybody in this room, republicans and democrats, all believe in taking care of the environment and we all want clean air and clean water. you would agree with that, wouldn't you? >> i believe that the american people generally do. i think that the -- i have gone on record as saying that the voting record of this house has been several votes led by the party that's in the majority right now against and to turn back environmental statutes. >> and you believe that's turning back some of the things

that you believe in but are you looking at what the cost is? i know you've received many letters from many business groups, too, that i believe that we've gone -- that we are actually hurting the economy in the process? >> sir, when we do our regulatory work, we are careful to do analysis of cost, analysis of benefits, analysis of jobs we've added in several cases to be sensitive to people and we also get as many letters from citizens who want to ensure that the epa is doing its job to keep the air clean. >> do you believe the pipeline should be approved? >> that's my my jurisdiction. i don't have any personal belief. >> that's a good nonanswer. >> i recognize the gentleman mr. inslee for five minutes. >> thank you, madame, administrator. i want to first thank you for

your work. i have a new 3-week-old granddaughter and i don't think there's anyone doing more to make sure she has clean air to breathe and clean water to drink and swim in. i just want to thank you for your work. and i want to ask you a question about the rfs 2 proposal in relationship to trying to get cellulosic biofuels into the market. i know this is something you've been wrestling with. i wonder if you have any thoughts about how we could help the industry expedite the entry of those products into the market either by rule making or otherwise? do you have any thoughts about that? >> i do believe epa is through most of its required work on the renewable fuel standard setting the required volumes for various fuels from various feed stocks. we've also processed and i think through reviewing a request to

increase the amount of ethanol blended into gasoline the e-15 waiver. you know, the actual marketing of gasoline is beyond simply the scope of our agency. we have labels to ensure that people don't miss fuel. there's lots of work happening at the u.s. department of agriculture to encourage not only the current generation of biofuels but i know the secretary, he and i have spoken many times about his plan. it's a comprehensive plan for the next generation of biofuels to keep that industry alive and well. >> thank you for your work. >> thank you. and congratulations. >> thank you. >> i'd like to recognize the gentleman from west virginia, mr. mckinley, for five minutes. >> thank you, mr. chair. ed a minstrart, thank you very much. i'm sure it's been grueling to go through three hours of this. first question i have, if i could maybe get through a couple

quick questions with yes or nos to the extent that we can, have you ruled out regulating coal ash as a hazardous substantial under subtitle c of rcra? >> we have not made a final rule. that would have to be a no. >> with this notice of intent from headwaters resources in filing an action against and i guess some environmental groups are also doing the reverse. they're taking an action against the epa on the hazardous waste perhaps, can you give us for the record a commitment that you'll take this into consideration when -- if you were to set that you will consider the fact that headwaters is also put in a concern and that that will be included in the settlement? >> i'm not familiar with the letter. but this is -- >> it was filed in your office -- it was addressed to you on february the 9th.

>> okay. >> it was their notice they want equal protection under this. are you saying you will? >> in our regulatory action, in our rule making, we look at all information presented to us. i think public comment period is closed, we now have a notice of data availability out. i am aware the environmental groups are suing -- >> the third question is the epa is apparently in a funding with vanderbilt university and perhaps others this new leaf environmental assessment framework program they're doing down there, i can't find the amount in there that what we're doing. from what i understand that may be an alternative to the t-clips. if you're looking at that, i'd

like to understand how much money you're putting into that. >> we will get that for you. i don't have it. >> and the last, morning importantly, has been a question, i don't know if you're familiar with this report that was presented indoor air quality, indoor air pollution in california in 2005, various authoritative document in which it points out much the problems that we're dealing with air quality as indoor since we're spending approximately 90% of our time indoors. so when all the folks are talking about asthma attacks, premature deaths, heart attacks, whatever, i think very well could be traced back to conditions inside, since they're spending 90% of their time indoors. but i don't see anything -- i can't find in your budget a priority for where the epa could be stepping up and really dealing with children in schools with 56 million children are in classrooms every day and i don't -- i don't see a

prioritization in your budget for what you're spending in education and mitigation and labelling for products so you can help. if california is right, they're saying in their own report it's costing the state of california $45 billion a year. now, i don't know how the folks on the other side of the aisle keep arguing about all these. i don't know how they can differentiate between getting sick from indoors versus outdoors but it's a convenient thing to challenge us on. but i'm curious. what can we do on that? and especially given the fact that you're spending $28 million last year giving grants to foreign governments instead of using that to help educate our states in ways to mitigate our indoor air quality problems. can you help explain that some to us? >> i'm happy to. the president's budget increases our children and sensitive

population budgets by $3 million. it is not true that we gave $28 million to foreign governments in grants last year. and we have a program that works with school districts, many of them underfunded, to try to help them address issues of public health for children. and many of them are not mandatory. so these are voluntary programs. education is important, as well as things like siting guidelines and other technical assistance to help for things from radon to asbestos. so that's in addition to partnering with states who are often working as well. i just have to remind us all that, yes, indoor air quality is very important but outdoor air quality impacts indoor air quality quite significantly as well. so we look at air as a whole, not simply one versus the other. >> the gentleman's time is expired. mrs. jackson, one thing that mr.

mckinley brought up and a number of people have brought up is the amount of grants that are given with epa to foreign entities directly or indirectly. i would just ask that you all provide with us a list of those over the last three years. last three years. at this time i recognize the gentleman from west virginia -- i mean from virginia, mr. griffith, for five minutes. >> thank you, mr. chairman. ms. jackson, secretary jackson, today the d.c. circuit is hearing oral argument in the greenhouse gas litigation and that involves the tailoring rule. in your brief that has been filed on behalf, it indicates in that brief that there would be a need to hire 230,000 full-time employees, that there would need to be an additional 81,000 psd

permits per year, 6 million title 5 permits and a cost to the epa of $21 billion -- on top of the current budget, $21 billion per year. i'm looking at the brief where i get these numbers and then the sentence right after the paragraphs that lay out these numbers say based on this analysis, epa found applying the literal statuary thresholds on january 2nd, 2011, would, quote, overwhelm the resources of permitting authorities and severely impair the functioning of the programs. you would agree with that assessment yes or no? >> yes, sir. >> and that's why you all have defended the tailoring rule based on a theory that there is a theory of law that says if it's not practical, you can -- you don't have to do it. isn't that correct? >> no, sir. we say if the result is absurd or increases administrative burden where it can't