Congressional Testimony
Congressional Testimony
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Urban Institute Senior Fellow Levitis Testifies Before Senate Finance Committee
WASHINGTON, Dec. 2 -- The Senate Finance Committee released the following testimony by Urban Institute senior fellow Jason Levitis from a Nov. 19, 2025, hearing entitled "The Rising Cost of Health Care: Considering Meaningful Solutions for All Americans":* * *
Chairman Crapo, Ranking Member Wyden, and distinguished members of the Committee, thank you for the opportunity to testify about the cost of health care.
My name is Jason Levitis. I am a senior fellow at the Urban Institute, a nonprofit organization that conducts research to inform policy debates and improve people's lives. I am also ... Show Full Article WASHINGTON, Dec. 2 -- The Senate Finance Committee released the following testimony by Urban Institute senior fellow Jason Levitis from a Nov. 19, 2025, hearing entitled "The Rising Cost of Health Care: Considering Meaningful Solutions for All Americans": * * * Chairman Crapo, Ranking Member Wyden, and distinguished members of the Committee, thank you for the opportunity to testify about the cost of health care. My name is Jason Levitis. I am a senior fellow at the Urban Institute, a nonprofit organization that conducts research to inform policy debates and improve people's lives. I am alsoa nonresident senior fellow at the Solomon Center for Health Law and Policy at Yale Law School. The views expressed here are my own and do not represent the Urban Institute or Yale Law School, their trustees, or their funders.
I conduct research primarily on the intersections of health care and tax law and policy, as well as more broadly on the Affordable Care Act (ACA) and health insurance Marketplaces. I also provide extensive technical assistance to state health care officials. Before this work, I served at the US Treasury Department for eight years. I spent most of that time in the Office of Tax Policy, working on the tax system generally and then also leading the Department's ACA implementation work. This included drafting tax regulations, forms, and publications regarding the premium tax credit (PTC), the employer shared responsibility provision, the ACA's coverage reporting provisions, and various tax-preferred health spending arrangements like health savings accounts (HSAs), health flexible spending arrangements (FSAs), and health reimbursement arrangements (HRAs).
I greatly appreciate the opportunity to discuss health care affordability, which is a crucial issue for every American, and especially for this Committee.
Much of my focus these days is on how to simplify the health care system to reduce costs for American consumers, employers, and taxpayers. The system has grown too complicated and segmented, with multiple duplicative tax benefits, public programs, and regulatory regimes, each with a cathedral of complex rules. Chairman Crapo has been a leading voice for decades about the importance of tax simplification--for fairness, clarity, and reducing taxpayer burdens.1 I submit that the complexity of the health care system has similar costs. The Congressional Research Service recently cataloged 24 distinct tax-preferred health spending arrangements, each with a different combination of qualifying expenses, contribution caps, eligibility rules, reimbursement processes, and other parameters.2 This complexity is a bonanza for benefits consultants, tax lawyers, and financial intermediaries, but it creates confusion and compliance burdens for individual taxpayers, businesses, health care providers, and federal and state governments. As Michael Cannon of the Cato Institute recently highlighted, every new legal rule creates incentives for economic actors to skew their behavior to receive the most beneficial tax
treatment, burdening our economy overall.3 All these costs flow through to taxpayers in the form of higher health insurance premiums and federal subsidies. So, as we think about how to reduce health care costs, I'd love to partner with this committee on ways to simplify the health care system and the tax rules that play such a large role.
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1 Senator Mike Crapo Press Office, "In Light of Supreme Court Refusal to End Double and Triple Taxation of Businesses, Crapo and Schumer Unveil Legislation to Provide Relief," June 28, 2007, https://www.crapo.senate.gov/media/newsreleases/in-light-of-supreme-court-refusal-to-end-double-and-tripletaxation-of-businesses-crapo-and-schumer-unveil-legislation-to-provide-relief; Senator Mike Crapo Press Office, "Americans Deserve A Fair and Competitive Tax Code," February 28, 2011, https://www.crapo.senate.gov/media/columns/americans-deserve-a-fair-and-competitive-tax-code; and Senator Mike Crapo Press Office, "Joint Delegation Column: Goodbye to Old Federal Tax System," April 23, 2018, https://www.crapo.senate.gov/media/columns/joint-delegation-column_goodbye-to-old-federal-tax-system.
2 Jason Levitis, Claire O'Brien, and Rachael Totz, "The Pointless Proliferation of Tax-Preferred Health Spending Arrangements, Part 1: The Landscape," Health Affairs Forefront, May 1, 2025, https://doi.org/10.1377/forefront.20250429.286011; and Jason Levitis, Claire O'Brien, and Rachael Totz, "The Pointless Proliferation of Tax-Preferred Health Spending Arrangements, Part 2: Ideas for Reform," Health Affairs Forefront, May 2, 2025, https://doi.org/10.1377/forefront.20250501.88221.
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That said, my main focus today is something narrower and more immediate. Millions of Americans are about to see--indeed are already seeing--tremendous increases in health insurance premiums for 2026: people like Mr. Armitage sitting next to me here. That's because the enhanced PTCs--first enacted in the American Rescue Plan and then extended in the Inflation Reduction Act--are expiring at the end of 2025. I hope to make three points about these imminent premium increases:
* First, and I know you've heard this before, the premium increases will cause great harm to taxpayers, increasing their out-of-pocket costs, leaving millions uninsured, and disproportionately harming small businesses, entrepreneurs starting new companies, older people, and people in rural areas.
* Second, while the premium increases don't technically take effect until the end of the year, their harms are already being felt and will increase quickly. Given this reality, a clean extension of the enhanced PTCs appears to be the only way to quickly stem the damage.
* Finally, while the status quo is far from perfect, the ideas being discussed to alter the enhanced PTCs, or replace them with some sort of account, suffer from substantial flaws that would increase premiums, reduce coverage, and hurt people with pre-existing conditions.
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Background
For years before the ACA passed, leaders across the ideological spectrum declared the growth of health care spending to be a crisis. Health expenditures as a share of GDP increased from 8.9 percent in 1980 to 13.3 percent in 2000 to 17.2 percent in 2009.4 Health insurance premiums were skyrocketing.5 Related to this was a narrower issue: people who didn't qualify for employer coverage, Medicare, or Medicaid generally had no affordable source of adequate coverage, especially if they had a pre-existing condition. Plans could discriminate and limit coverage in a whole range of ways. If you had a pre-existing condition, were a woman, or had certain jobs, they could increase your premiums, deny coverage for pre-existing conditions or maternity care, or deny you coverage altogether. If you enrolled and got sick during the year, they could cap your benefits, cancel your plan, or refuse to renew it. To add insult to injury, this "medical underwriting" required costly investigations of applicants' medical histories, which drove up premiums even for the healthy people who could enroll. Finally, people forced to rely on the individual market generally received no help paying for health insurance from the federal government, while virtually every other American did through Medicare, Medicaid, or, for those with employer coverage, the tax exclusion.
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3 Michael F. Cannon, "Don't Hate the Player, Hate the Income Tax for Wrecking Health Care," Cato Institute, July 18, 2025, https://www.cato.org/blog/dont-hate-player-hate-income-tax-wrecking-health-care.
4 Matthew McGough, Emma Wager, Aubrey Winger, Nirmita Panchal, and Lynne Cotter, "How Has U.S. Spending on Healthcare Changed over Time?," Peterson-KFF Health System Tracker, December 20, 2024. https://www.healthsystemtracker.org/chart-collection/u-s-spending-healthcare-changed-time/.
5 Jonathan Gruber, Growth and Variability in Health Plan Premiums in the Individual Insurance Market Before the Affordable Care Act, The Commonwealth Fund 11 (1750: June 2014).
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The result was not pretty. In 2009, there were 45 million uninsured people.6 People faced financial hardship, inability to access needed health care, added sickness, and loss of income. Unpaid bills meant both crippling debt for consumers and financial burdens on health care providers. The problem was especially acute for self-employed people, who could not access the group insurance market. As a result, many people chose not to start companies or look for new roles because they needed the protections and tax benefits provided through employer-sponsored insurance.
The ACA took steps to address the broader crisis, and evidence shows it has had some effect,7 though more needs to be done. But on the narrow problem of the dysfunctional individual market, the ACA took two key steps:
First, it prohibited health insurance companies from some of the worst and most discriminatory practices that made the system unworkable for people with pre-existing conditions: coverage exclusions on pre-existing conditions, higher premiums or outright coverage denials for sick people, annual and lifetime limits, and cancelling policies when people get sick. This also had the nice side effect of reducing administrative costs, since investigating people's medical history is so expensive.
Second, it created the PTC to help make individual coverage affordable. In part, this was only fair, since the federal government helps pay for pretty much every other kind of health coverage. But it was also crucial for getting young, healthy people to enroll, which helped restrain premiums and the program's costs.
The PTC used a premium support model where consumers have a fixed amount to spend. This gives consumers an incentive to pick a cheaper plan to minimize their share, and insurers an incentive to compete on price. The new Marketplace helped consumers compare plans and shop around for the plan that was the best fit for them.
In other words, the PTC was designed to make individual health premiums affordable in three ways: by directly helping people pay their premiums, by ensuring that healthy people enroll to improve the risk pool, and by facilitating natural price competition among health insurers.
I will not say that everything has gone perfectly. Deductibles are still too high for many enrollees.
And while many of the worst insurer abuses are gone, they continue to look for ways to deny coverage through prior authorization and other utilization management techniques.
But generally, the approach has worked. Between 2020 and 2025, Marketplace benchmark premiums grew by an average annual rate of just 2 percent8--slower than employer-sponsored insurance9 and inflation,10 both of which grew at around 5 percent annually. Individual market premiums are now comparable with those for group coverage, or even a bit lower.11
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6 KFF, "Health Insurance Coverage of the Total Population," accessed November 17, 2025, https://www.kff.org/state-health-policy-data/state-indicator/total-population/.
7 McGough et al., "How Has U.S. Spending on Healthcare Changed over Time?."
8 KFF, "Marketplace Average Monthly Benchmark Premiums," accessed November 16, 2025, https://www.kff.org/affordable-care-act/state-indicator/marketplace-average-benchmark-premiums/.
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The uninsured rate has trended downward, reaching a historical low of 8 percent in 2024.12 Insurer competition is strong, with at least three insurers competing in markets serving 97 percent of enrollees in 2025.13 Public support for the ACA has doubled, from 33 percent in late 2013 to 64 percent today.14 More generally, while overall health care prices are still too high, the growth of health spending as a share of GDP finally slowed its relentless growth. After growing from 13.3 percent in 2000 to 17.2 percent in 2009, it has flattened out since then, sitting at 17.6 percent in 2023.15 More remains to be done, but the growth of spending has slowed since the ACA became law.16
That brings us to the current debate. Part of the recent success of the ACA is due to a change made in 2021. Until then, while the Marketplace was functioning and the uninsured rate falling, it was also widely recognized that the PTC didn't go far enough to make coverage affordable, for two reasons: it provided too little help for the lowest-income working families; and it left out everyone over 400 percent of the federal poverty level (FPL), or about $63,000 for a single person in 2026, even though no such caps apply to the employer coverage exclusion.
In 2021, Congress passed legislation to address both issues, increasing the PTC for everyone who received it and extending it for the first time to somewhat higher incomes, while still having it phase out to zero as income goes up (figure 1).
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9 KFF, "Premiums and Worker Contributions Among Workers Covered by Employer-Sponsored Coverage, 19992025," October 22, 2025, https://www.kff.org/health-costs/premiums-worker-contributions-among-workerscovered-by-employer-sponsored-coverage/.
10 US Inflation Calculator, "Current US Inflation Rates: 2000-2025," accessed November 16, 2025, https://www.usinflationcalculator.com/inflation/current-inflation-rates/.
11 Lynne Cotter, Matthew Rae, Matthew McGough, Shameek Rakshit, and Cynthia Cox, "How ACA Marketplace Costs Compare to Employer-Sponsored Health Insurance," KFF-Peterson Health System Tracker, November 3, 2025, https://www.healthsystemtracker.org/brief/how-aca-marketplace-costs-compare-to-employer-sponsoredhealth-insurance/.
12 Lisa N. Bunch and Halelujha Ketema, Health Insurance Coverage in the United States: 2024, Current Population Reports P60-288 (Washington, DC: US Census Bureau, 2025), https://www.census.gov/library/publications/2025/demo/p60-288.html.
13 Center for Consumer Information & Insurance Oversight (CCIIO), Plan Year 2025 Qualified Health Plan Choice and Premiums in HealthCare.Gov Marketplaces, (Baltimore: CMS, 2024).
14 Ashley Kirzinger, Isabelle Valdes, Alex Montero, Alex Montero, and Mollyann Brodie, "5 Charts About Public Opinion on the Affordable Care Act," KFF, October 3, 2025, https://www.kff.org/affordable-care-act/5-chartsabout-public-opinion-on-the-affordable-care-act/.
15 McGough et al., "How Has U.S. Spending on Healthcare Changed over Time?."
16 McGough et al., "How Has U.S. Spending on Healthcare Changed over Time?."
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FIGURE 1: PTC Amount with and without Enhancements in Place for a 40-Year-Old in an Average-Premium Benchmark Plan, 2026
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With these changes in effect, the ACA finally achieved its promise of making good health insurance--and the economic security that comes with it--affordable for virtually every American.
Congress extended the enhancements in the Inflation Reduction Act in 2022, but only through the end of 2025. The enhancements are now set to expire in little more than a month, and Congress must decide whether to extend them or let them lapse.
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Imminent Reductions in the PTC Would Greatly Reduce Health Care Affordability and Coverage, with Harms Concentrated on Small Businesses, the Near-Elderly, and in Rural Areas
There is broad agreement that the upcoming PTC reductions will increase taxpayers' health insurance premiums and reduce coverage.
The Congressional Budget Office (CBO) estimates the reductions will mean 3.8 million fewer people with health insurance by 2036.17 My colleagues at the Urban Institute, who run a similar model, estimate a coverage loss of 4.8 million people in 2026. The number of PTC recipients would fall by 7.3 million people, out of the 19 million that receive it today, with reductions as large as 50 percent in some states. All income and age groups would see substantial coverage losses.18
The reason for these coverage losses is simple--people will face higher premiums to purchase coverage. Premiums will be higher for two key reasons. First, everyone who currently receives the PTC will either be eligible for less or completely ineligible. KFF estimates that average net premiums will more than double.19 Premium increases will affect every income level: my Urban colleagues found that, among those with subsidized Marketplace coverage, net premiums will be over four times as large for people with incomes below 250 percent of FPL ($39,125 about for an individual), more than double for people with incomes from 250 to 400 percent of FPL ($39,125 to $62,600 for an individual), and nearly double for people with incomes above 400 percent of FPL ($62,600 for an individual).20
Second, when the net price of coverage increases, relatively healthy people will be most likely to go without coverage, since they expect to use fewer health care services (though, of course, they too could end up with health care costs that would bankrupt them without insurance).21 This hurts the risk pool, which increases premiums for people paying for coverage on their own or using an individual coverage health reimbursement arrangement and increases the average cost of the PTC. KFF estimates that gross premiums are increasing by 26 percent in 2026--this after growing by just 2 percent per year between 2020 and 2025 (figure 2).22 This huge increase reflects both the expected PTC reductions and other recent changes to deter healthy people from enrolling, including provisions of the One Big Beautiful Bill Act, the recent Marketplace Integrity and Affordability rule, and announced cuts to outreach and navigator funding, as well as developments like tariffs that increase the underlying cost of health care.23 The precise portion attributable to expiration of the PTC enhancements is unclear. But it's clear this combination of factors has upended a market that had been working to keep premiums in check.
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17 Phillip Swagel, "Re: The Estimated Effects of Enacting Selected Health Coverage Policies on the Federal Budget and on the Number of People With Health Insurance," CBO, September 18, 2025.
18 Matthew Buettgens, Michael Simpson, Jason Levitis, Fernando Hernandez-Lepe, and Jessica Banthin, "4.8 Million People Will Lose Coverage in 2026 If Enhanced Premium Tax Credits Expire," (Washington, DC: Urban Institute, 2025), https://www.urban.org/research/publication/48-million-people-will-lose-coverage-2026-if-enhancedpremium-tax-credits.
19 Justin Lo, Larry Levitt, Jared Ortaliza, and Cynthia Cox, "ACA Marketplace Premium Payments Would More than Double on Average Next Year If Enhanced Premium Tax Credits Expire," KFF, September 30, 2025. https://www.kff.org/affordable-care-act/aca-marketplace-premium-payments-would-more-than-double-onaverage-next-year-if-enhanced-premium-tax-credits-expire/.
20 Buettgens et al., "4.8 Million People Will Lose Coverage in 2026 If Enhanced Premium Tax Credits Expire."
21 Jared Ortaliza, Matthew McGough, Kaitlyn Vu, et al. "How Much and Why ACA Marketplace Premiums Are Going up in 2026." KFF-Peterson Health System Tracker, August 6, 2025, https://www.healthsystemtracker.org/brief/how-much-and-why-aca-marketplace-premiums-are-going-up-in2026/.
22 Cynthia Cox, "ACA Insurers Are Raising Premiums by an Estimated 26%, but Most Enrollees Could See Sharper Increases in What They Pay," KFF, October 28, 2025, https://www.kff.org/quick-take/aca-insurers-are-raisingpremiums-by-an-estimated-26-but-most-enrollees-could-see-sharper-increases-in-what-they-pay/; and KFF, "Marketplace Average Monthly Benchmark Premiums."
23 Ortaliza et al., "How Much and Why ACA Marketplace Premiums Are Going up in 2026."
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FIGURE 2: Average Gross Monthly Benchmark Premium for a 40-Year-Old, 2014-26
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The reductions would also be especially harmful to certain groups of taxpayers. Because insurers generally charge higher gross premiums based on age, there are particularly large effects on older people (figure 1).24 Half of enrollees who will lose PTC eligibility are over 50--people like Mr. Armitage.25 For the same reason, people in high-premium areas of the country will be hit hard. This is disproportionately concentrated in rural areas, likely because they experience greater provider concentration and less provider competition.26 The nation's highest premiums are in Alaska, Vermont, West Virginia, and Wyoming.27
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24 Jessica Banthin, Laura Skopec, and Michael Simpson, "Enhanced PTCs Help Older Adults and Those in HighPremium States Afford Coverage," (Washington, DC: Urban Institute, 2024), https://www.urban.org/research/publication/enhanced-ptcs-help-older-adults-and-those-high-premium-statesafford-coverage.
25 Justin Lo and Cynthia Cox. "Who Might Lose Eligibility for Affordable Care Act Marketplace Subsidies If Enhanced Tax Credits Are Not Extended?" KFF, March 3, 2025. https://www.kff.org/affordable-care-act/whomight-lose-eligibility-for-affordable-care-act-marketplace-subsidies-if-enhanced-tax-credits-are-not-extended/.
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Small businesses are also disproportionately affected. Treasury Department data shows that 3.3 million self-employed workers and small business owners ages 21 to 64 enrolled in Marketplace coverage in 2022, including 285,000 with incomes above 400 percent of FPL ($62,600 for an individual).28 This represents 28 percent of total Marketplace enrollment for consumers ages 21 to 64 and 18 percent of all self-employed workers and small business owners; by comparison, the Marketplace covered just 6 percent of the rest of the population. This share is even higher in some states: in Florida, North Carolina, and Wyoming, at least a quarter of self-employed workers and small business owners enrolled in the Marketplace. With Marketplace enrollment growth since 2022, the Center on Budget and Policy Priorities estimates that the number of self-employed workers and small business owners enrolled in the Marketplace has increased from 3.3 million to 5 million, and the uninsured rate among them has hit a record low.29
The reductions would also hit hard among the lowest-income PTC recipients. With the enhancements in place, enrollees earning up to 150 percent of FPL (about $23,500 for an individual) generally don't have a premium contribution for a benchmark silver plan. After the reductions, someone earning $23,000 would have to pay a premium of about $1,000 per year (figure 3). That's a lot of money for someone trying to pay for housing, food, and everything else on such a small amount. An added challenge is that many lower-income people don't have a bank account to set up recurring payments. A Brookings analysis found that nearly 1 million people would drop Marketplace coverage if their premiums increased from $0 to $1./30 These low-income individuals are also least likely to have other affordable coverage options, meaning most will end up uninsured.
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26 John Holahan, Erik Wengle, and Claire O'Brien, "ARPA's Enhanced Premium Subsidies Provide Particularly Large Benefits to Residents of Rural Areas, " (Washington, DC: Urban Institute, 2022), https://www.urban.org/research/publication/arpas-enhanced-premium-subsidies-provide-particularly-largebenefits-residents.
27 KFF, "Marketplace Average Monthly Benchmark Premiums."
28 USDT (US Department of the Treasury, Office of Tax Analysis), "Affordable Care Act Marketplace Coverage for the Self-Employed and Small Business Owners," (Washington, DC: USDT, 2024).
29 Gideon Lukens, "5 Million Small Business Owners and Self-Employed Workers Likely Enrolled in ACA Marketplace in 2025," Center on Budget and Policy Priorities, June 12, 2025, https://www.cbpp.org/research/health/5-million-small-business-owners-and-self-employed-workers-likelyenrolled-in-aca.
30 Matthew Fiedler, "How Would Eliminating $0 Marketplace Premiums Affect Insurance Coverage?," (Washington, DC: Brookings, 2025), https://www.brookings.edu/articles/how-would-eliminating-0-marketplace-premiumsaffect-insurance-coverage/.
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FIGURE 3: Expected Contribution with PTC to Purchase Individual Benchmark Coverage, with and without the PTC Enhancements, 2026
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It's also important to put this in the context of the other expected coverage losses. CBO estimates that the recent reconciliation bill will cut coverage by 10 million people.31 Combined with the PTC reductions, that means about 14 million people will lose coverage in the coming years.32 Urban estimates that this means a reduction in provider revenue of $1.1 trillion between 2025 and 2034.33 This could be devastating to the health care sector, causing a wave of hospital closures beyond those already underway.
Given all these harms, it is unsurprising that there's broad support to avoid these reductions across the political divide: Three-quarters of Americans support an extension, including half of Republicans and three-quarters of independents.34 There is also bipartisan support in Congress, including within this Committee.35 The National Association of Insurance Commissioners (NAIC), which represents the insurance regulators in all 50 states, has repeatedly called for speedy extension.36 Although some may be suspicious of insurers' motivations,37 patient groups,38 state Marketplaces,39 and providers40 are all broadly supportive as well.
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31 Phillip Swagel, "Re: Distributional Effects of Public Law 119-21," CBO, August 11, 2025.
32 Swagel, "Re: The Estimated Effects of Enacting Selected Health Coverage Policies on the Federal Budget and on the Number of People With Health Insurance."
33 Frederic Blavin and Michael Simpson, "State-Level Estimates of Health Care Spending and Uncompensated Care Changes under the Reconciliation Bill and Expiration of Enhanced Subsidies," (Washington, DC: Urban Institute, 2025), https://www.urban.org/research/publication/state-level-estimates-health-care-spending-anduncompensated-care-changes.
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Harms from PTC Reductions Are Already Being Felt and Will Increase Quickly; A Clean Extension of the Enhancements is Likely the Only Way to Quickly Stem the Damage in 2026
So, the question is what to do about it. The coming harms have long been clear.41 The NAIC first wrote to Congress about it in July 2024.42 State Marketplaces have written several letters on this issue, starting in March of this year.43
Yet no action has been taken, even as Congress enacted a huge tax package that permanently extended numerous other tax provisions set to expire after 2025.
There is now talk of holding a vote by December 12./44
In recent months, we've seen a raft of ideas advanced. Some call for replacing the enhancements-- or ACA subsidies more generally--with some sort of health spending account or similar vehicle. Others call for extending the enhancements, but with changes or limitations.
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34 Audrey Kearney, Alex Montero, Mardet Mulugeta, Ashley Kirzinger, and Liz Hamel, "KFF Health Tracking Poll: Public Weighs in on Health Care Debate and Government Shutdown," KFF, November 6, 2025, https://www.kff.org/public-opinion/kff-health-tracking-poll-public-weighs-in-on-health-care-debate-andgovernment-shutdown/.
35 Paige Masten, "Is Tillis the Only NC Republican Who Sees the Pain Expiring ACA Subsidies Will Bring?," The Charlotte Observer, November 10, 2025, https://www.charlotteobserver.com/opinion/article312826785.html.
36 "State Insurance Regulators Urge Extension of Enhanced Premium Tax Credits to Protect Millions of Consumers," NAIC, September 5, 2025, https://content.naic.org/article/state-insurance-regulators-urgeextension-enhanced-premium-tax-credits-protect-millions-consumers.
37 "Don't Let Health Care Tax Credits Expire: What's at Stake for Millions," AHIP, July 24, 2025, https://www.ahip.org/news/articles/dont-let-health-care-tax-credits-expire-whats-at-stake-for-millions.
38 Kevin L. Hagen, "Letter of Support for Bipartisan Premium Tax Credit Extension," PAN Foundation, September 22, 2025.
39 "State-Based Marketplace (SBM) Directors Support Continued Tax Credit Enhancements, State Marketplace Network, September 23, 2024, https://statemarketplacenetwork.org/state-based-marketplace-sbm-directorssupport-continued-tax-credit-enhancements/.
40 American Medical Association, "Letter of Support for Premium Tax Credit Extension - Physician Organizations," September 15, 2025.
41 Jason Levitis, Sabrina Corlette, and Claire O'Brien, "Damage from Inaction on ACA Tax Credits Has Begun and Will Grow with Further Delays." Health Affairs Forefront, October 8, 2025, https://doi.org/10.1377/forefront.20251007.680448.
42 Levitis, Corlette, and O'Brien, "Damage from Inaction on ACA Tax Credits Has Begun and Will Grow with Further Delays."
43 State Marketplace Network, "Letter on Premium Tax Credits," March 14, 2025.
44 Caitlyn Kim, "Government Shutdown Ends after House Passes Spending Package, Trump Signs It," CPR News, November 12, 2025, https://www.cpr.org/2025/11/12/government-shutdown-ends/.
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It is certainly worth considering options. American families face too much complexity and excessive out-of-pocket costs.
Unfortunately, the calendar has left little time to successfully implement broader structural changes to PTC going into 2026. That's because the damage from the reductions discussed above has already begun and will grow with each additional day the extension is delayed.45
This may be unintuitive. Some have argued there's still plenty of time to negotiate another solution.
This may stem from experience with other tax provisions, where expiring tax cuts are sometimes extended after they have technically ended but before tax returns are due for the year. But this timing does not work for the PTC. That's because people are deciding right now whether to purchase coverage for next year. If they do not enroll, they are ineligible for the PTC--even if the enhancements are later extended. The deadline to enroll for January 1 coverage is December 15--less than four weeks from today and less than three days from the proposed vote. Already, millions of enrollees have received notices informing them that their premiums are skyrocketing, or they have learned it by going into the Marketplace to shop. More are learning it every day. And, per the consensus described above, many of those learning of higher premiums--especially young and healthy people--will drop coverage, choose not to enroll, and/or cancel their automatic re-enrollment.
Others, especially those with pre-existing conditions, will have made painful choices to re-enroll with the much-higher premiums. To do this, they'll have cashed out their retirement funds or forgone their dream to start a small business, go to school, or buy a house.
All will have dealt with the stress and fear of this affordability shock, of worrying they cannot afford coverage or their much-needed knee replacement or cancer treatment.
With open enrollment now in full swing, all these harms are growing every day.
This is not to say it is "too late" to help people by extending the enhancements. If the tax credits are restored, this will be big news, and some people will come back and enroll. But many others won't hear, or won't have time to come back in. Or they'll have lost trust in the system. In its score of the American Rescue Plan--which passed in March 2021 and made the enhancements effective for 2021 and 2022-- CBO projected that the bill would increase Marketplace coverage in 2022 by 1.7 million, but would increase coverage in 2021 to "a much more limited extent... because the enhanced subsidy structure would take effect midway through the plan year."46 In short, many of these coverage losses won't be reversed.
So, what's the fastest way to stop this pain from spreading further and start reversing it? The answer is clear: a clean extension of the existing enhancements.
This is in part because none of the ideas discussed to replace or alter the enhancements are fully baked. As discussed in detail below, some are not workable as described, many are vague and lack sufficient detail to assess their ramifications, most would harm people with pre-existing conditions, virtually all would lead to coverage losses in their current form, and every one would be controversial.
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45 Levitis, Corlette, and O'Brien, "Damage From Inaction On ACA Tax Credits Has Begun And Will Grow With Further Delays."
46 CBO, "Reconciliation Recommendations of the House Committee on Ways and Means," 2021, https://www.cbo.gov/publication/57005.
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Even for the world's greatest deliberative body, hammering out the details of an agreement and building the coalition to pass it through both chambers, all in just a few weeks, is a heavy lift. This is exactly the type of complex work that the Finance Committee is well-suited to, considering the views of state governments, key stakeholders, consumers, and others. But such work takes time.
Even if a proposal could be finalized and passed through Congress very quickly, it would take months or years to implement. When the enhancements first passed in March of 2021, many Marketplaces took months to modify their systems. The good news is that the Marketplaces have built the enhancements into their current systems, and they've been preparing for months for the possibility of an extension.47 My understanding is that many Marketplaces could update their systems for a clean extension within a few weeks. They have a head start on the notices, call center scripts, navigator trainings, and other materials.
But implementing something different would likely take months or years longer. Many changes would require notice-and-comment rulemaking from the Treasury Department and/or the Centers for Medicare & Medicaid Services. Changes to state law or insurance regulation could then be needed.
Once these new rules were in place, Marketplaces would need new IT builds, new contracts, new testing, new training, and new educational materials for consumers. Changing the PTC architecture could take months. Building a whole new benefit--such as funneling federal funds into an HSA or another type of account --could easily take years, likely requiring the involvement of fiscal intermediaries. Such changes would also be costly for Marketplaces, taxing budgets that are already strained by lower enrollment, and potentially requiring higher user fees, further increasing premiums.
I was working on the ACA at the Treasury Department in those painful months in late 2013 and 2014 when the Marketplaces, having been rushed into service, initially failed to function. That lesson should be heeded today: building a new policy takes time and, if rushed, risks operational failure.
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Prominent Ideas for Modifying the Enhancements or Replacing Them with Some Sort of Account Would Raise Premiums, Reduce Coverage, and Hurt People with Pre-Existing Conditions
Again, the health care system is far from perfect, and I agree it is worth exploring a range of reform options to control costs, make coverage more affordable, and improve the consumer experience.
Unfortunately, reform options being discussed in recent weeks suffer from serious flaws: some are grounded in clear falsehoods, many are not workable at all, and virtually all would increase premiums, reduce coverage, and/or harm people with pre-existing conditions.
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47 Robert King, "Congress' Obamacare Subsidy Vote Could Set off State Scramble," POLITICO, November 16, 2025, https://www.politico.com/news/2025/11/16/states-prep-for-daunting-task-of-implementing-a-health-subsidyextension-if-it-comes-00653131.
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Two categories of alternative proposals are generally being discussed: modifying the current parameters of the enhancements or the underlying PTC, or replacing the enhancements (or other current subsidies) with some sort of account.
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Proposals to Modify the Enhancements' or PTC's Parameters
The PTC is one of the most complicated tax provisions individuals must contend with. Simplifying it to improve and clarify the consumer experience and improve efficiency is a worthwhile goal.
However, reforming the PTC will require a clear understanding of how it works. Unfortunately, several proposals for changing the enhancements and the PTC itself are grounded in falsehoods. For example, undocumented immigrants have never been eligible for PTCs or even to enroll through the Marketplace.48 The ACA already follows Hyde Amendment rules in prohibiting federal spending-- including PTC spending--on abortion coverage.49
Some have claimed that the enhanced PTC has no income cap and is "available to everyone... even millionaires."50 But as seen in figure 1 above, the enhanced PTC is income-limited--it just phases out gradually rather than dropping off suddenly like the reduced PTC.
Another inaccurate claim is that providing zero-premium coverage has led to millions of people receiving PTC fraudulently, and therefore, that people close to poverty need to be charged more, on top of the deductibles and copays they already owe.51 There is fraud in every public program, and it must never be tolerated.52 But the claims of widespread PTC fraud are not credible. Indeed, a federal court recently struck down CMS regulations to restrict Marketplace coverage, which the agency attempted to justify using the estimates based on the same methodology, finding that the analysis was of "questionable validity and limited relevance," and that CMS hadn't even tried to defend it.53 That said, there is clear evidence that, in 2024, rogue brokers improperly enrolled or switched the enrollment of a few hundred thousand people without their permission. CMS responded with several measures to crack down on this fraud, including unwinding the enrollments to ensure these consumers were held harmless, tightening controls on data sharing and plan switching, and suspending 850 brokers implicated in the abuses.54
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48 "Can Immigrants Get Help Paying Premiums and/or Cost-Sharing for Health Insurance in the Marketplaces?" KFF, September 29, 2025, https://www.kff.org/faqs/faqs-health-insurance-marketplace-and-theaca/immigrants/can-immigrants-get-help-paying-premiums-and-or-cost-sharing-for-health-insurance-in-themarketplaces/.
49 Laurie Sobel, Alina Salganicoff, and Rolonda Donelson, "Deja Vu: The Future of Abortion Coverage in ACA Marketplace Plans," KFF, September 26, 2025, https://www.kff.org/womens-health-policy/deja-vu-the-future-ofabortion-coverage-in-aca-marketplace-plans/.
50 Dean Clancy, "The Pandemic Is over--Let Biden's Health Insurance Handouts Expire," The Hill, September 18, 2025, https://thehill.com/opinion/healthcare/5509018-biden-tax-credits-expire/.
51 Niklas Kleinworth, Liam Siguad, and John R. Graham, "Ghostbusting ACA Fraud: Millions Who Don't Use Their Health Insurance Expose Abuse in the Program," Paragon Health Institute, October 1, 2025, https://paragoninstitute.org/private-health/ghostbusting-aca-fraud-millions-who-dont-use-their-healthinsurance-expose-abuse-in-the-program/; and "Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability: A Rule by the Health and Human Services Department," Federal Register, June 25, 2025, https://www.federalregister.gov/documents/2025/06/25/2025-11606/patient-protection-and-affordable-careact-marketplace-integrity-and-affordability.
52 U.S. Government Accountability Office, "Fraud & Improper Payments," March 11, 2025, https://www.gao.gov/fraud-improper-payments.
53 City of Columbus et al. v. Kennedy et al., Order on Motion for Preliminary Injunction, August 22, 2025.
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More could be done by the administration and Congress to crack down on these rogue brokers, including by increasing penalties, expanding enforcement powers, and increasing cooperation with state insurance regulators. But neither Congress nor CMS has pursued these measures, and indeed CMS reinstated many brokers earlier this year.55 Regardless, it's troubling to reason that broker fraud requires taking coverage from or undermining affordability for consumers- who in fact are the victims here.
Other reforms have also been discussed to reduce PTC amounts, narrow eligibility, or make it harder to enroll.56 These proposals share a common theme: making coverage less affordable for those who need it, resulting in coverage losses. Because people with pre-existing conditions are generally willing to pay more or jump through more hoops for the same coverage, any of these options would increase premiums in the Marketplace.
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Ideas for Replacing the Enhancements with an HSA or Other Type of Account
It is difficult to analyze the ideas for replacing the enhancements--or the PTC generally--with some form of health spending account, as their effects would depend heavily on the details of the proposal, none of which are currently available. But to the extent we understand what they would do, they appear to be unworkable, or at least to drive premiums higher, hurt people with pre-existing conditions, and do nothing to restore coverage for people like my co-witness, Mr. Armitage.
As an initial matter, it's worth noting that we should be skeptical of efforts to create additional taxpreferred health spending arrangements without first streamlining the ones we have. As noted earlier, we have now accumulated 24 separate varieties--a proliferation that only a third-party administrator or benefit consultant could love. All these options would add more middlemen to a system already rife with middlemen. As discussed earlier, all the options would require complex policy development and then months or years of implementation.
But setting that aside, let's consider the potential options. They seem to fall into three buckets: 1. Some or all the money could be put in an account that can be used to pay for health services, even if the consumer lacks health insurance, sort of like an FSA.
2. Some or all the money could be put into an account that pays for health services but can only be used with insurance, like an HSA.
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54 "CMS Update on Actions to Prevent Unauthorized Agent and Broker Marketplace Activity," CMS, October 17, 2024, https://www.cms.gov/newsroom/press-releases/cms-update-actions-prevent-unauthorized-agent-andbroker-marketplace-activity.
55 Kaye Pestaina, Rayna Wallace, Michelle Long, Meghan Salaga, and Emma Lee, "Fraud in Marketplace Enrollment and Eligibility: Five Things to Know," KFF, June 30, 2025, https://www.kff.org/patient-consumerprotections/fraud-in-marketplace-enrollment-and-eligibility-five-things-to-know/.
56 Benjamin Guggenheim, "Four GOP Ideas for an Obamacare Subsidies Compromise," POLITICO, October 13, 2025, https://subscriber.politicopro.com/article/2025/10/republicans-democrats-shutdown-obamacaresubsidies-00606480; and Meredith Lee Hill, "Obamacare 'Auto-Enrollees' Are Key Target as Republicans Formulate Tax-Credit Extension Plan," POLITICO, October 23, 2025, https://www.politico.com/liveupdates/2025/10/23/congress/brett-guthrie-obamacare-auto-enrollees-00620622.
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3. Some or all the money could be put into an account that could be used to pay for health insurance, or directly for health care services--sort of like an old-fashioned HRA.
Some of these possibilities were addressed by my co-witness, Douglas Holtz-Eakin, in a recent post.57
The first option, he notes, would simply deny people health insurance, leaving them to self-insure with a few thousand dollars to spend:
"[T]he money could be put in a FSA to cover the direct purchase of medical care. That solves the BIG, BAD Insurance Companies problem by essentially forcing everyone to self-insure and leaving them exposed to financial ruin from an expensive episode of acute care."
This same logic seems to apply to the second option, but it's even worse, because consumers could use the accounts only if they had health insurance, and they would be denied the subsidies they need to buy it. This would apparently leave them without either insurance or the use of the account.
The third option, he writes, would lead to an adverse selection death spiral that would likely destroy the market, at least if applied to PTC spending:
"Let's...imagine that all the subsidies being sent to insurers to cover ACA policyholders is, instead, sent in cash to the policyholders. Those policyholders with the greatest health needs will likely combine the government check with their own premium contribution and buy the same insurance. But some policyholders will not, especially if their health is good and they weren't paying anything out of pocket to begin with.
Enrollment would drop, but especially so among the healthy. This is classic adverse selection; the remaining pool will be sicker and the premiums would have to rise. This would tend to drive out the remaining relatively healthy and the spiral would continue.
At some point in the process, insurers would leave the ACA market. Eventually there would be some sort of residual high-risk pool serviced at high cost by a few insurers.
So, giving people cash will not work."
A more limited version of this option--converting only the funding for the enhancements into an account--would have results that are less catastrophic, but still quite bad. Again, sicker people would use the funds to buy insurance, while healthy people would use the funds to self-insure, resulting in classic adverse selection and higher premiums. This would increase costs to the federal government and anyone seeking to purchase on their own. Any of those newly uninsured people would be at risk of incurring thousands of dollars in out-of-pocket costs if they have even modest health care needs in 2026.
Based on this speculative journey, none of these options seems attractive. Any diversion of the enhanced PTC into a tax-advantaged savings account still results in over 20 million Americans' premiums more than doubling on average, and nearly 4 million people losing coverage. If funds in a tax advantaged account could be used on premiums, all the proposal will have accomplished is adding administrative hurdles for working people. Nor do any of these options address the underlying concern about rising health care costs for consumers, employers, and the government.
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57 Douglas Holtz-Eakin, "TrumpCare," American Action Forum, The Daily Dish, November 12, 2025, https://www.americanactionforum.org/daily-dish/trumpcare/.
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To be fair, none of these options has been explained in any detail. As we approach the challenges of making coverage more affordable, it is important to keep an open mind and consider a wide range of options. But one thing is clear--none of these options is viable as a fix for 2026.
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Conclusion
Making health care affordable for all Americans has been an abiding policy goal of the modern era.
Americans need health insurance to shield them from financial ruin, but insurance is complex and comes with incentives to deny needed care. We have finally seen some slowing of the growth of health care spending and health insurance premiums, yet prices remain too high. Public programs and tax benefits can help people pay for health care, but their complexity adds costs and siphons off funds to consultants and middlemen. The ACA has prohibited some of the worst insurance company practices, but much more remains to be done. The Senate Finance Committee is well-suited to undertake a rigorous process to identify bipartisan reforms for the future that address costs and complexity. But these efforts will take months or years and thus cannot address the immediate crisis: Marketplace enrollees seeing their premiums more than double in 2026 because of enhanced PTCs expiring. For Mr. Armitage and millions more like him, the only help that can come in time is to extend the enhanced PTCs in their current form.
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Original text here: https://www.finance.senate.gov/imo/media/doc/11192025_levitis.pdf
Senate Environment & Public Works Committee Chairman Capito Issues Opening Statement at Hearing on PFAS
WASHINGTON, Dec. 2 -- Sen. Shelley Moore Capito, R-West Virginia, chairman of the Senate Environment and Public Works Committee, released the following opening statement from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances.* * *
"This Congress, the Environment and Public Works Committee has examined many issues associated with PFAS contamination and remediation, including potential impacts on public health, liability issues and the EPA's regulatory responses.
"I have seen first-hand the impact of PFAS contamination ... Show Full Article WASHINGTON, Dec. 2 -- Sen. Shelley Moore Capito, R-West Virginia, chairman of the Senate Environment and Public Works Committee, released the following opening statement from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances. * * * "This Congress, the Environment and Public Works Committee has examined many issues associated with PFAS contamination and remediation, including potential impacts on public health, liability issues and the EPA's regulatory responses. "I have seen first-hand the impact of PFAS contaminationin my home state of West Virginia, and I am going to continue leading this Committee's efforts to protect the health of my constituents, clean up legacy pollution and ensure the folks responsible for the contamination fund their share of the clean-up costs.
"Today, we will discuss another part of the PFAS problem: how PFAS cleanup and disposal directly affects billions of dollars in infrastructure investment. Project managers, including federal contractors, encounter PFAS contamination when expanding airports, rebuilding roads, bridges and replacing water systems.
"Since there is not a clear framework guiding where contaminated soil should go, what standards apply or who is liable, it becomes extremely difficult to clean up and remediate these sites once contamination has been identified.
"To address the liability concerns after the EPA's designation of P-F-O-A and P-FO-S as hazardous substances under CERCLA, the agency issued an enforcement discretion policy to protect some passive receivers, including landfills, airports and farms. But that guidance does not answer the practical questions that are halting projects right now.
"First, the system between contractors and disposal facilities is breaking down.
Today's projects face a major, impossible situation: landfills often will not accept soil unless the soil is tested for PFAS because insurance companies won't provide coverage to the landfill operator. When contractors do test the soil, there is no established federal standard to measure against. Insurers often deny coverage if any PFAS is detected, even if PFAS is below varying state standards.
"Second, because project managers cannot price this liability risk, potential bids for infrastructure projects just come in with huge contingencies or no bids at all.
This leads to a cost premium that directly affects how critical projects are built and maintained, and those costs are passed through to taxpayers and ratepayers.
"The EPA can take steps now to improve how these problems are managed throughout the full lifecycle of a construction project. The Agency should issue clear disposal guidance to restore predictability, so contractors and landfills know where to dispose of contaminated soil.
"Projects need federal soil screening levels that are practical and implementable.
Communities need guidance on managing PFAS in groundwater, stormwater and treatment systems.
"We also need to address the root cause of the contamination. PFAS hotspots such as military sites and airports are a major source of the problem. Without limiting contamination in these areas, PFAS will keep seeping into water supplies, leaving communities with a "forever" drinking water problem.
"For locations with the highest concentrations of PFAS, we may need disposal options beyond containment. The good news is that the destruction technology is here, and the EPA validated that process with thorough testing, showing that PFAS can be destroyed at levels above 99.99 percent. That technology is expensive, which is why EPA needs to issue guidance to determine what management approaches are most appropriate.
"Liability issues must be addressed. The EPA should provide predictable pathways for good-faith actors using the proven, bipartisan model established under the brownfield cleanup process. When CERCLA liability slowed brownfield cleanups, the EPA used administrative settlements to protect innocent landowners and local governments. That same authority exists today.
"The EPA's April 2024 enforcement memo on PFAS enforcement explicitly contemplates settlements with passive receivers to protect those entities from third-party claims. These settlements close the liability gap that enforcement discretion leaves open and ensures that polluters pay.
"Administrative settlements are a critical interim solution, but case-by-case agreements are too slow to fully address a nationwide challenge. Recognizing the limitations of EPA's administrative authority, Congress provided a permanent statutory solution through the 2002 Brownfields Amendments. This statutory fix removed the burden of case-by-case settlements by providing lasting legal certainty. This model is a proven framework for good governance, and it is the model we should consider for PFAS.
"Congress must come together to enact a bipartisan solution to minimize future PFAS contamination, develop a clear path to destroy PFAS and protect passive receivers. I am committed to working with members on both sides of the aisle, and I look forward to hearing from our witnesses."
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Original text here: https://www.epw.senate.gov/public/_cache/files/5/8/5859dfd5-1a8b-4bc6-803f-3a0895ee2189/74F6066C7D6DBC7402C8515F404916442CDC2BFDAB82DD739C7226E3F5E1CAFB.11-19-2025-smc-opening-statement.pdf
Congressional Research Service Division Supervisory Attorney Bowers Testifies Before Senate Environment & Public Works Committee (Part 2 of 2)
WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following testimony by Kate R. Bowers, a supervisory attorney in the American Law Division of the Congressional Research Service, from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances.* * *
(Continued from Part 1 of 2)
This testimony will focus on a discretionary limitation on EPA's enforcement authority as well as one statutory exemption and one statutory limitation that appear to be most relevant in the PFAS context.
Depending ... Show Full Article WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following testimony by Kate R. Bowers, a supervisory attorney in the American Law Division of the Congressional Research Service, from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances. * * * (Continued from Part 1 of 2) This testimony will focus on a discretionary limitation on EPA's enforcement authority as well as one statutory exemption and one statutory limitation that appear to be most relevant in the PFAS context. Dependingon the circumstances of a specific release and the parties involved in it, other defenses and limitations could also apply.
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EPA's Enforcement Discretion
Response actions and cost recovery under CERCLA are discretionary. CERCLA does not require EPA to take enforcement action with respect to every release of a hazardous substance over which the agency has response and enforcement authority. EPA may exercise its enforcement discretion on a site-by-site basis to pursue, or decline to pursue, cost recovery against PRPs that meet the statutory criteria for liability. When EPA does take action with respect to an individual site, the agency has discretion to pursue enforcement against one, some, or all PRPs, and to select which enforcement mechanism--a negotiated voluntary settlement agreement, a Section 106 order, or a Section 107(a) cost recovery action--to apply. In some instances, EPA has issued written guidance describing its enforcement discretion policy with respect to specific categories of sites or PRPs.
On April 19, 2024, EPA issued an enforcement discretion and settlement policy explaining how the agency would exercise its enforcement discretion under CERCLA in matters involving PFAS.106 EPA stated that it "intends to focus its enforcement efforts on entities who significantly contributed to the release of PFAS contamination into the environment, including parties that manufactured PFAS or used PFAS in the manufacturing process, federal facilities, and other industrial parties."107 As a result, the agency explained that it "does not intend to pursue otherwise potentially responsible parties where equitable factors do not support seeking response actions or costs under CERCLA."108 EPA identified five categories of entities against which it did not intend to pursue PFAS response actions or costs under CERCLA:
* Community water systems and publicly owned treatment works,
* Municipal separate storm sewer systems,
* Publicly owned or operated municipal solid waste landfills,
* Publicly owned airports and local fire departments, and
* Farms where biosolids are applied to the land.109
EPA also identified several equitable factors that could form the basis for extending enforcement discretion to additional parties not in one of those five categories:
* Whether an entity is a state, local, or tribal government or works on behalf of or conducts services that otherwise would be performed by a state, local, or tribal government;
* Whether an entity performs certain defined public service roles related to drinking water, wastewater, and waste and pollution management;
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105 Id. Sec.Sec. 9607(p), 9614(c), 9619(a), 9607(q), 9607(r), 9607(n), 9607(d).
106 EPA PFAS Enforcement Discretion and Settlement Policy, supra note 8.
107 Id. at 6.
108 Id. at 3.
109 Id. at 6-8.
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* Whether an entity manufactured PFAS or used PFAS as part of an industrial process; and
* Whether and to what degree an entity is actively involved in the use, treatment, storage, disposal, or transport of PFAS.110
Additionally, EPA described how it could use settlement agreements to protect entities from liability and lawsuits brought by other parties. First, EPA stated that it would seek in its settlements with major PRPs to secure a waiver of rights providing that the settling PRP cannot pursue contribution claims against certain non-settling parties.111 As noted above, absent such a waiver, the settling PRP could pursue contribution claims against those parties.
Second, as to parties that fall into one of the categories of entities enumerated in the memo or for which the enumerated equitable factors do not support enforcement against them for PFAS response actions under CERCLA, EPA stated that it may enter into settlement agreements with those parties to provide them with contribution protection.112 Consistent with Section 113 of CERCLA, PRPs that resolve their liability to the United States through a CERCLA settlement with EPA would not be liable for third-party contribution claims for matters addressed in that settlement.113
Finally, EPA noted that parties may qualify for de minimis or de micromis settlements in certain situations or for limited "ability to pay" settlements "where payment could result in undue financial hardship for the PRP."114
Although EPA did not refer to its enforcement discretion memorandum when it announced its intent to retain the 2024 designations, the memo appears to remain in effect. CRS has not identified instances where EPA either declined to take enforcement action or entered into a settlement agreement consistent with the goals identified in the policy.
Enforcement discretion is distinct from a statutory exemption from liability in multiple ways. While EPA's exercise of enforcement discretion may allow some parties that would ordinarily be vulnerable to liability to avoid paying for some or all of a response action, the agency's decision to exercise its discretion and decline to pursue enforcement does not alter the scope of liability defined in the statute.115 Additionally, EPA is not bound to apply an enforcement discretion policy uniformly and may deviate from it--such as for parties that fail to cooperate with the agency or significantly contribute to the spread of significant quantities of PFAS contamination, or in situations presenting an imminent and substantial endangerment to public health or the environment--or subsequently modify or revoke it.116
Furthermore, EPA's enforcement discretion only applies to EPA's decision not to pursue enforcement against PRPs. States, tribes, and private parties may seek cost recovery or contribution against a PRP even if EPA does not. A PRP is not entitled to contribution protection unless it has resolved its liability to the United States or a state through a settlement. Therefore, a discretionary decision by EPA not to pursue enforcement against particular parties may leave that party vulnerable to contribution claims by third parties, though EPA's stated policy of using settlement agreements to provide contribution protection appears intended to address this potential outcome.
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110 Id. at 8-9.
111 Id. at 9.
112 Id.
113 42 U.S.C. Sec. 9613(f)(2).
114 EPA PFAS Enforcement Discretion and Settlement Policy, supra note 8, at 9-10.
115 See Kelley v. EPA, 15 F.3d 1100, 1107-08 (D.C. Cir. 1994) (holding that "courts and not EPA [are] the adjudicator of the scope of CERCLA liability" and vacating EPA rule limiting CERCLA liability for secured creditors).
116 EPA PFAS Enforcement Discretion and Settlement Policy, supra note 8, at 10. See, e.g., Ass'n of Flight Attendants-CWA, AFL-CIO v. Huerta, 785 F.3d 710, 716 (D.C. Cir. 2015) (explaining that a policy statement explaining how an agency "will exercise its broad enforcement discretion . . . under some extant statute or rule" is "binding on neither the public nor the agency, and the agency retains the discretion and the authority to change its position . . . in any specific case").
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A non-federal or private party seeking CERCLA cost recovery or contribution against an entity covered by an EPA enforcement discretion policy would still need to meet the requirements to establish liability: that a release or threatened release of a hazardous substance caused the incurrence of response costs, and that the entity qualifies as a PRP under the statute. To the extent EPA undertakes fewer cleanups as a result of its PFAS enforcement policy, there may be fewer circumstances giving rise to the requisite response costs, unless states, tribes, local governments, or private parties choose to clean up PFAS contamination that EPA has declined to address.
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Federally Permitted Releases
Section 107(j) of CERCLA provides an exemption to CERCLA liability for response costs or damages resulting from a federally permitted release.117 In general, the statute defines "federally permitted release" as a release or discharge that is in accordance with a permit issued under an enumerated list of federal statutes, including the CWA, RCRA, and the CAA.118 Releases or discharges that are potentially relevant in the PFAS context include but are not limited to the following:
* Discharges in compliance with permits under Section 402 of the CWA (i.e., National Pollutant Discharge Elimination System (NPDES) permits);
* Discharges resulting from circumstances identified and reviewed and made part of the public record with respect to a NPDES permit and subject to a condition of such permit;
* Continuous or anticipated intermittent discharges from a point source, identified in a NPDES permit or permit application, which are caused by events occurring within the scope of relevant operating or treatment systems;
* The introduction of any pollutant into a publicly owned treatment works when the pollutant is specified in and in compliance with applicable pretreatment standards of Section 307(b) or (c) of the CWA; and
* Releases in compliance with a legally enforceable final permit issued pursuant to Section 3005(a) through (d) of RCRA from a hazardous waste treatment, storage, or disposal facility when such permit specifically identifies the hazardous substances and satisfies other conditions.
Under Section 107(j), recovery for response costs or damages resulting from a federally permitted release "shall be pursuant to existing law in lieu of" CERCLA.119 By its express terms, Section 107(j) does not modify any obligations or liability under other state or federal law, including common law, for harm resulting from a release or for the costs of cleaning up a hazardous substance. If another statute or common law provides a cause of action associated with a federally permitted release, that cause of action remains available even though CERCLA does not.
Some of the categories of industrial operators that have expressed concerns regarding their liability in the event of a PFAS hazardous substance designation likely have permits under one or more of the federal environmental statutes identified in the definition of "federally permitted release."
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117 Id. Sec. 9607(j).
118 Id. Sec. 9601(10). The definition includes "any emission into the air subject to a permit or control regulation under" specific provisions of the Clean Air Act. Id. Sec. 9601(10)(H) (emphasis added). A federal court of appeals has distinguished this language from the sections of the definition that refer to discharges in compliance with permits issued under other laws, concluding that a release from a permitted facility that did not comply with relevant Clean Air Act permits was nevertheless "federally permitted" for the purposes of CERCLA's reporting requirements. Clean Air Council v. U.S. Steel Corp., 4 F.4th 204 (3d Cir. 2021).
119 42 U.S.C. Sec. 9607(j).
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For example, municipal wastewater treatment plants would be subject to the requirements of a NPDES permit issued by EPA or a state. Whether a party's PFAS discharges constituted a federally permitted release would depend on the specific permits issued to that party. If a CWA permit issued by EPA or a state imposed PFASspecific requirements, a court evaluating the applicability of the federally permitted release exemption would consider whether the PFAS discharge complied with the terms of the permit. Similarly, if EPA issued pretreatment standards for PFAS, a court would consider whether a facility's discharges to publicly owned treatment works were specified in and in compliance with applicable pretreatment standards. Some states with delegated CWA permitting authority have issued permits to industrial operators that include PFAS discharge limits.120
Somewhat less clear is whether a discharge of a designated PFAS from an entity that is permitted under the CWA could constitute a federally permitted release if the permit does not specify effluent limits or pretreatment standards specifically for discharges of PFAS. It is also less clear whether a discharge would be a federally permitted release if the permit specifies only monitoring requirements or best management practices for a designated PFAS. Currently, EPA has not specified discharge standards for PFAS under the CWA, whether in nationally applicable standards for categories of dischargers or in individual permits.
EPA has indicated, however, that it plans to develop effluent limitation guidelines for PFAS manufacturers and metal finishers, and to propose a rule that would require NPDES permit applications to address monitoring and reporting of PFAS.121 Once those rules are finalized, their implementation in permits could result in additional releases of PFAS qualifying as federally permitted releases.
Additionally, future regulation of PFAS under RCRA could affect the applicability of the federally permitted release exception to releases in compliance with hazardous waste permits issued pursuant to that statute. In February 2024, EPA proposed to list nine PFAS as "hazardous constituents" under RCRA.122 Such a listing would not make those PFAS or the wastes containing them hazardous wastes pursuant to the statute, but would serve as a building block for potential future regulation of PFAS as a RCRA listed hazardous waste.123 This is because one of the pathways for listing a solid waste as a hazardous waste is if the solid waste contains a hazardous constituent and the EPA Administrator concludes that the waste is "capable of posing a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported or disposed of, or otherwise managed."124 If wastes containing PFAS were subsequently regulated as RCRA listed hazardous wastes, releases in compliance with RCRA hazardous waste permits issued pursuant to that statute could be considered federally permitted releases under CERCLA in some circumstances.
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Limitation on EPA's Enforcement Authority for State-Law Responses
The 2002 amendments to CERCLA provide a statutory limit to the sites over which EPA may exercise its enforcement authority. Section 128(b) bars EPA from taking enforcement action under Sections 106(a) or 107(a) of CERCLA at certain sites where there is or has been a response action undertaken in pursuant to a state's cleanup authorities.125 Similar to EPA's enforcement discretion policy, to the extent Section 128(b) limits EPA's ability to enforce CERCLA liability arising from PFAS contamination, it may serve to limit the number of sites that could give rise to a private contribution claim under CERCLA. Moreover, where a party has recovered costs, damages, or claims under state law, Section 114(b) bars recovery under CERCLA for the same costs, damages, or claims.126
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120 See, e.g., Press Release, North Carolina Dep't of Env't Quality, DEQ Approves Permit to Reduce PFAS Contamination in the Cape Fear River (Sept. 15, 2022), https://www.deq.nc.gov/news/press-releases/2022/09/15/deq-approves-permit-reduce-pfascontamination-cape-fear-river.
121 EPA, Administrator Zeldin Announces Major EPA Actions to Combat PFAS Contamination (Apr. 28, 2025), https://www.epa.gov/newsreleases/administrator-zeldin-announces-major-epa-actions-combat-pfas-contamination; Office of Information and Regulatory Affairs, Office of Management and Budget, Unified Agenda, PFAS Requirements in NPDES Permit Applications, https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202504&RIN=2040-AG34 (last visited Nov. 15, 2025).
122 Listing of Specific PFAS as Hazardous Constituents, Proposed Rule, 89 Fed. Reg. 8606 (Feb. 8, 2024).
123 Id. at 8609.
124 See 40 C.F.R. Sec. 261.11 (describing pathways for listing solid waste as a hazardous waste under RCRA).
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In states with mini-Superfund laws that allow for remediation and liability associated with PFAS contamination, some cleanups are now proceeding under those state laws,127 which would bar federal enforcement action under CERCLA at those sites. CERCLA cost-recovery or contribution claims for which a party has already recovered costs would also be barred under Section 128(b) of CERCLA.
Accordingly, to the extent PFAS contamination is addressed under state law, Section 128(b) could limit both the sites at which EPA undertakes a cleanup and the ability of any party to recoup cleanup costs pursuant to CERCLA.
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Recent PFAS Litigation Under CERCLA
As noted above, the scope of financial liability under CERCLA is limited to response costs, natural resource damages, natural resource damage assessments, and federal public health studies.128 While the 2024 designation of PFOA and PFOS makes CERCLA's liability framework available where the other preconditions to liability are met, other legal pathways remain open for recovering certain kinds of costs related to PFAS contamination.
CRS has not identified instances subsequent to the April 2024 designation in which EPA has taken enforcement action under CERCLA against a PRP related to cleanup of PFOA or PFOS contamination.129 Litigation under other laws and between PFAS manufacturers, entities that used PFAS in their manufacturing processes, municipal governments, water utilities and other passive receivers, and owners of contaminated property has been ongoing for several years. These lawsuits have asserted a number of claims under state tort law, state "mini-CERCLA" laws, and other federal and state laws, and thus are not premised on the designation of PFAS as hazardous substances under CERCLA. While the 2024 designation may provide another cause of action in some circumstances, it does not necessarily increase the amount of financial liability a party may face. This is because CERCLA's "double recovery" provision prohibits "compensation for the same removal costs or damages or claims" under CERCLA that a party has already received under any other state or federal law, as well as compensation for removal costs or damages or claims under any other federal or state law that a party has already received under CERCLA.130
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125 42 U.S.C. Sec. 9628(b)(1). EPA retains some enforcement authority, including where a state has requested federal assistance in the response action, there is migration of contamination across state lines or onto federal property, an imminent and substantial endangerment to public health or welfare or the environment necessitates further cleanup, or newly discovered information indicates that further remediation is necessary to protect public health or welfare or the environment. Id. Sec. 9628(b)(1)(B).
126 Id. Sec. 9614(b). Section 114(b) also bars recovery under state law or any other federal law for costs, damages, or claims for which a party has already been compensated under CERCLA. Id.
127 See POLLACK ET AL., supra note 32, at 102-07.
128 CRS In Focus IF11790, Liability Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), by Kate R. Bowers (2021).
129 EPA has taken action to address PFAS contamination under other statutory authorities that are not predicated on the April 2024 CERCLA hazardous substance designation. For example, in May 2024, EPA issued an order pursuant to Section 1431 of SDWA directing the United States Air Force and the Arizona Air National Guard to address PFAS contamination in drinking water at the Tucson International Airport Area Superfund Site. See Emergency Administrative Order for Response Action, In the Matter of The United States Air Force and Arizona National Guard, Docket No. PWS-AO-2024-10 (May 29, 2024). In October 2024, the Air Force agreed to take several actions, including under CERCLA, to resolve the dispute with EPA. Letter from Dr. Ravi Chaudhary, Assistant Secretary of the Air Force, Energy, Installations & Environment, to David Uhlmann, Assistant Administrator, Office of Enforcement & Compliance Assurance, EPA (Oct. 21, 2024); Letter from Amy Miller-Bowen, Director, Enforcement and Compliance Assurance, EPA Region 9, to Michelle Brown, Director, Environmental Policy and Programs, Office of the Deputy Assistant Secretary of the Air Force (Oct. 21, 2024).
* * *
In some PFAS-related cases that were pending before the 2024 designation, plaintiffs have amended their complaints to add claims under CERCLA. One such set of cases is the AFFF multidistrict litigation (MDL), a group of more than 10,000 suits that have been consolidated before a single court. In general, the plaintiffs allege that AFFFs contaminated groundwater near military bases, airports, and other sites where they were used to extinguish liquid fuel fires, and that the plaintiffs incurred personal injury, property damage, other economic losses, and a need for medical monitoring as a result.131 The plaintiffs allege claims against PFAS manufacturers as well as against the United States government.
Some plaintiffs in the AFFF multidistrict litigation have added CERCLA claims to their complaints. For example, on July 8, 2024, New Mexico filed an amended complaint against the United States, the U.S. Air Force, and the U.S. Department of the Army in the ongoing litigation.132 New Mexico had already asserted claims against the United States under RCRA and the New Mexico Hazardous Waste Act. The amended complaint adds a CERCLA cost recovery claim against the federal defendants, alleging that New Mexico has incurred more than $3,000,000 in response costs and more than $140,000 in natural resource damage assessments and will incur future costs of at least $6,495,000 and natural resource damage assessments of at least $3,625,000.133 Similarly, Art and Renee Schaap, the owners of a New Mexico dairy farm--who had already sued the United States under the Federal Tort Claims Act for damages related to cleanup of PFAS contamination on their property--filed a complaint in the MDL seeking to hold the United States liable for response costs under CERCLA.134
A suit by the City of Wausau, Wisconsin against Georgia-Pacific, LLC and other facilities that used PFAS in their manufacturing processes was originally filed in the U.S. District Court for the Western District of Wisconsin but was conditionally transferred to the AFFF MDL.135 Wausau has opposed the transfer, and the Wisconsin case is stayed pending an order from the Judicial Panel on Multidistrict Litigation regarding the transfer.
On September 8, 2025 (prior to EPA's announcement that it intended to retain the 2024 designation), the United States moved to hold all CERCLA claims in the MDL in abeyance while EPA reviewed the 2024 designation and in order to prevent double recovery under CERCLA.136 The court has not yet ruled on the motion. The United States also moved to deny or defer ruling on the Schaaps' motion for summary judgment to allow for fact discovery, including with respect to the question of double recovery.137 Some other cases were newly filed subsequent to the 2024 designation but relate to contamination that has already been the subject of other lawsuits. On December 9, 2024, the City of Dalton, Georgia--a longtime center of carpet and flooring manufacturing, including stain- and soil-resistant carpets and floors manufactured with PFAS--filed a lawsuit against several PFAS manufacturers and carpet manufacturers that used PFAS in their manufacturing processes.138
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130 42 U.S.C. Sec. 9614(b).
131 U.S. District Court, District of South Carolina, Aqueous Film-Forming Foams (AFFF) Products Liability Litigation, MDL No. 2873, https://www.scd.uscourts.gov/mdl-2873/index.asp (last visited Nov. 11, 2025).
132 Second Amended Complaint, New Mexico v. United States, No. 2:20-cv-02115 (MDL No. 2:18-mn-2873) (D.S.C. July 8, 2024).
133 Id. at 61-63.
134 Complaint, Schaap v. United States, No. 2:24-cv-07040 (MDL No. 2:18-mn-2873) (D.S.C. Dec. 5, 2024), ECF No. 1; Plaintiffs' Motion for Partial Summary Judgment on Liability and Recovery of CERCLA Responses Costs Incurred to Date, Schaap v. United States, No. 2:24-cv-07040 (MDL No. 2:18-mn-2873) (D.S.C. June 25, 2025), ECF No. 7.
135 City of Wausau v. Georgia-Pacific, LLC, No. 3:25-cv-00004 (W.D. Wisc.).
136 United States' Motion to Hold in Abeyance CERCLA Cost Recovery and Contribution Claims, In re: Aqueous Film-Forming Foams Products Liability Litigation, MDL No. 2:18-mn-2873 (D.S.C. Sept. 8, 2025), ECF No. 7987.
137 Motion to Deny or Defer Ruling on Plaintiffs' Motion for Partial Summary Judgment, Schaap v. United States, No. 2:24-cv07040 (MDL No. 2:18-mn-2873) (D.S.C. Sept. 8, 2025), ECF No. 11.
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In addition to various state and tort law claims, Dalton alleges that the defendants arranged for disposal, treatment, and/or transport for disposal or treatment of PFAS at the city's wastewater treatment system and therefore are liable for response costs under CERCLA.139 Dalton has been a defendant in lawsuits arising from the discharge of PFAS by Dalton's wastewater facilities, which allegedly resulted in contamination of drinking water in other cities in the area.140
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Original text here: https://www.epw.senate.gov/public/_cache/files/7/5/750a4b1c-2980-4b5b-806c-14cac7fded25/2099376A93A70A9EF1680FB6F39A13658F1568B257EE16AF24CF8CC1D66167FD.11-19-2025-bowers-testimony.pdf
Congressional Research Service Division Supervisory Attorney Bowers Testifies Before Senate Environment & Public Works Committee (Part 1 of 2)
WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following testimony by Kate R. Bowers, a supervisory attorney in the American Law Division of the Congressional Research Service, from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances.* * *
Chairman Capito, Ranking Member Whitehouse, and Members of the Committee:
My name is Kate Bowers, and I am a supervisory attorney in the American Law Division of the Congressional Research Service (CRS). Thank you for the opportunity to testify ... Show Full Article WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following testimony by Kate R. Bowers, a supervisory attorney in the American Law Division of the Congressional Research Service, from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances. * * * Chairman Capito, Ranking Member Whitehouse, and Members of the Committee: My name is Kate Bowers, and I am a supervisory attorney in the American Law Division of the Congressional Research Service (CRS). Thank you for the opportunity to testifyon the implications of the U.S. Environmental Protection Agency's (EPA's) designation of two per-and polyfluoroalkyl substances (PFAS) as hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This testimony will discuss CERCLA's framework for holding parties responsible for the costs to clean up contaminated sites, including the mechanisms by which private parties may sue other private parties to recoup cleanup costs.
This testimony will also address EPA's PFAS enforcement discretion policy.
PFAS are a large, diverse group of fluorinated compounds that have been used in numerous commercial, industrial, and military applications. PFAS are persistent in the environment and have been detected in soil, surface water, groundwater, and public water supplies. Studies suggest that exposures to PFAS above certain levels may lead to adverse health effects.1
On April 19, 2024, EPA announced a final rule designating two PFAS--perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS)--as hazardous substances pursuant to CERCLA.2 Designation of PFOA and PFOS as hazardous substances under CERCLA has several effects. Releases of the
designated PFAS are subject to the reporting requirements for certain releases of hazardous substances pursuant to Section 103 of CERCLA.3 Failure to comply with those reporting requirements could result in criminal penalties.4 Designation also authorizes EPA to respond to releases or threat of releases of PFOA or PFAS without first finding that the release may present an imminent and substantial danger to the public health or welfare.5
Releases of PFAS designated as hazardous substances are also subject to CERCLA's liability framework.
Financial liability under CERCLA requires (1) a release or threatened release (2) of a hazardous substance (3) from a facility into the environment (4) that causes the incurrence of response costs.6 To be held liable under CERCLA, an entity must fall within one or more of the categories of "covered persons" or "potentially responsible parties" (PRPs) set forth in the statute. Each element of liability--and thus the scope of liability--is defined under the statute. Various exceptions and defenses further limit the scope of liability where applicable.
Determination of liability is a fact-intensive and site-specific inquiry that would depend on factors including a party's relationship to the contamination, the nature of the PFAS contamination, and the party's status under several federal environmental permitting regimes. Additionally, a party's liability for third-party contribution claims under CERCLA would depend in part on whether that party had resolved its liability to EPA or a state and thus was entitled to protection from future suits.
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1 For further discussion of the properties, uses, and health effects of PFAS, see CRS Report R45986, Federal Role in Responding to Potential Risks of Per- and Polyfluoroalkyl Substances (PFAS), coordinated by Elena H. Humphreys (2022).
2 The rule designation was announced on April 19, 2024, and published on May 8, 2024. Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances, 89 Fed. Reg. 39124 (May 8, 2024).
3 42 U.S.C. Sec. 9603.
4 Id. Sec. 9603(b).
5 Id. Sec. 9604(a)(1).
6 Id. Sec. 9607(a). For purposes of this testimony, "cleanup costs" encompasses "all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan" and "any other necessary costs of response incurred by any other person consistent with the national contingency plan." Id.
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CERCLA hazardous substance designation alone does not trigger a public or private response action to address PFAS contamination at any site, and also does not determine any party's liability. Furthermore, such designation under CERCLA does not cause PFOA and PFOS to be treated as hazardous or toxic substances under other federal statutes with their own definitions of those terms. Designation also does not address requirements under other state and federal laws for the treatment, storage, and disposal of PFOA and PFOS.7
At the same time EPA announced the final designation, it also issued a PFAS enforcement discretion and settlement policy memorandum explaining that it does not intend to recover cleanup costs from entities where equitable factors do not support CERCLA responsibility, including farmers, municipal landfills, water utilities, municipal airports, and local fire departments.8 EPA also explained that it intends to use the CERCLA settlement process to protect those entities from third-party lawsuits from entities who themselves have been held liable for response costs and who are seeking to recoup costs from other liable parties.
CRS remains available to the Committee to provide research and analysis of these issues or other questions related to CERCLA and the regulation of PFAS through testimony, briefings, and confidential memoranda.
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Federal Response Authority and Overview of Cleanups
Congress enacted CERCLA to "promote the timely cleanup of hazardous waste sites and to ensure that the costs of such cleanup efforts were borne by those responsible for the contamination."9 Liability under CERCLA is generally contingent on a response action, or cleanup, at a site, and the consequent incurrence of response costs. The response action may be carried out by a private party, but it may also be a federal action: Section 104(a) of CERCLA authorizes the President to respond to a release (or substantial threat of a release) of a hazardous substance into the environment, or of a pollutant or contaminant that may present an "imminent and substantial danger to the public health or welfare."10 The President has delegated CERCLA's response authority to EPA and other agencies that administer federal facilities.11 In general, CERCLA response actions for the purposes of cleanup fall into two categories. Removal actions are generally shorter-term actions taken to address immediate risks.12 Remedial actions are generally longer-term actions to address contamination more permanently and may involve long-term containment of wastes.13
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7 See EPA, Questions and Answers about Designation of PFOA and PFOS as Hazardous Substances under CERCLA, https://www.epa.gov/superfund/questions-and-answers-about-designation-pfoa-and-pfos-hazardous-substances-under-cercla (last visited Nov. 15, 2025).
8 David M. Uhlmann, Assistant Administrator for Enforcement and Compliance Assurance, EPA, PFAS Enforcement Discretion and Settlement Policy Under CERCLA (Apr. 19, 2024), https://www.epa.gov/system/files/documents/2024-04/pfas-enforcementdiscretion-settlement-policy-cercla.pdf (hereinafter "EPA PFAS Enforcement Discretion and Settlement Policy." 9 Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 602 (2009).
10 42 U.S.C. Sec. 9604(a).
11 Id. Sec. 9615. For more general information regarding CERCLA, see CRS Report R48630, Federal Environmental Remediation Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), a.k.a. "the Superfund Law", by Lance N. Larson (2025).
12 42 U.S.C. Sec. 9601(23).
13 Id. Sec. 9601(24).
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The designation of PFOA and PFOS as hazardous substances does not automatically trigger the CERCLA response process or determine applicable cleanup standards.14 The level of cleanup that CERCLA requires is a site-specific determination. Section 121(d) specifies that the selected remedial action "shall attain a degree of cleanup . . . and of control of further release at a minimum which assures protection of human health and the environment."15 Section 121(d) further specifies that a cleanup must comply with applicable, relevant, and appropriate requirements (ARARs), including standards or requirements set forth in federal or state environmental or facility siting laws.16
CERCLA also identifies two sets of federal standards under other statutes that apply to the selection of remedial actions at any site (so long as those standards are relevant and appropriate to the circumstances of an individual release or threatened release). First, Section 121(d) requires remedial actions to achieve a level of cleanup that at least attains Maximum Contaminant Level (MCL) goals established under the Safe Drinking Water Act.17 Second, the cleanup must be consistent with any water quality criteria established under Sections 303 or 304 of the Clean Water Act (CWA).18
EPA issued a final national primary drinking water regulation for six PFAS, including PFOA and PFOS, in April 2024.19 The regulation includes MCLs for PFOA and PFOS each at 4.0 parts per trillion.20 On May 14, 2025, EPA announced that the agency would retain the 2024 drinking water standards for PFOA and PFOS but intended to issue a proposed rule to extend compliance deadlines as well as to rescind and reconsider its regulatory determinations for the other PFAS addressed in the 2024 rule.21 EPA also stated that it would establish a federal exemption framework and initiate enhanced outreach to water systems.22 Additionally, EPA published final recommended water quality criteria for PFAS to protect aquatic life in October 2024 and draft recommended water quality criteria to protect human health in December 2024.23 Designation of MCLs and finalization of water quality criteria for any PFAS does not trigger any action under CERCLA, but those requirements could be incorporated into site-specific cleanup standards to the extent those requirements are deemed "relevant and appropriate," consistent with the underlying premise of an ARAR.
Many states and tribes have enacted separate authorities (often called "mini-Superfund laws") for their own programs to clean up contaminated sites.24 Section 114 of CERCLA specifically provides that states may impose additional liability or requirements with respect to the release of hazardous substances within their borders.25 The regulations governing response actions taken under CERCLA, which are referred to as the National Contingency Plan (NCP), specify procedures for EPA and states to enter into memoranda of agreement for carrying out cleanups.26 Private parties may also undertake response actions, either at their own initiative or subject to an order issued by EPA or a court under CERCLA.27
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14 See EPA, Questions and Answers about Designation of PFOA and PFOS as Hazardous Substances under CERCLA, https://www.epa.gov/superfund/questions-and-answers-about-designation-pfoa-and-pfos-hazardous-substances-under-cercla (last visited Nov. 13, 2025).
15 42 U.S.C. Sec. 9621(d)(1).
16 Id. Sec. 9621(d)(2).
17 Id. Sec. 9621(d)(2)(A)(ii); see also 42 U.S.C. Sec. 300g-1.
18 42 U.S.C. Sec. 9621(d)(2)(A)(ii); see also 33 U.S.C. Sec.Sec. 1313, 1314.
19 PFAS National Primary Drinking Water Regulation, 89 Fed. Reg. 32532 (April 26, 2024).
20 Id.
21 EPA, EPA Announces It Will Keep Maximum Contaminant Levels for PFOA, PFOS (May 14, 2025), https://www.epa.gov/newsreleases/epa-announces-it-will-keep-maximum-contaminant-levels-pfoa-pfos.
22 Id.
23 Final Recommended Aquatic Life Criteria and Benchmarks for Select PFAS, 89 Fed. Reg. 81077 (Oct. 7, 2024); Draft National Recommended Ambient Water Quality Criteria for the Protection of Human Health for Perfluorooctanoic Acid, Perfluorooctane Sulfonic Acid, and Perfluorobutane Sulfonic Acid, 89 Fed. Reg. 105041 (Dec. 26, 2024). For additional discussion of the regulation of PFAS under the Clean Water Act, see CRS In Focus IF12148, Regulating PFAS Under the Clean Water Act, by Laura Gatz (2025).
24 See EPA, State Response Programs, https://www.epa.gov/enforcement/state-response-programs (last updated May 29, 2025); see also JAMES B. POLLACK ET AL., PFAS DESKBOOK 102-07 (2023) (discussing use of state mini-Superfund laws to address PFAS contamination).
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Overview of Liability Under CERCLA
CERCLA imposes liability on parties responsible for the presence of hazardous substances at a site.
Parties with specific relationships to contamination at a site may be held liable when there is (1) a release or threatened release (2) of a hazardous substance (3) from a facility into the environment (4) that causes the incurrence of response costs.28 The definitions of "release" and "hazardous substance"--and, by extension, EPA's response authority and parties' liability for response costs--exclude multiple types of releases and substances. The scope of these definitions, as well as the range of parties that can be held liable under CERCLA, are relevant in considering the effects of the PFAS hazardous substance designation.
Liability under CERCLA may take the form of an obligation to carry out a response action, or an obligation to pay response costs incurred by another party. In general, a party that incurs response costs under the conditions stated above may seek to recover some or all of those costs from other parties that are potentially liable for the costs under CERCLA.29 CERCLA litigation can thus provide a framework for a large number of potentially liable parties to arrive at an equitable allocation of liability for response costs, based on their share of responsibility determined on a case-by-case basis.
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Who May Be Liable Under CERCLA
CERCLA provides a mechanism to compel covered persons or potentially responsible parties (PRPs) to perform or pay for a cleanup of hazardous substances. Private parties and federal, state, and local governmental entities can be liable as PRPs.30 CERCLA establishes financial liability for four categories of PRPs:
* The current owner or operator of a facility;
* Former owners or operators of a facility at the time hazardous substances were disposed of there;
* Generators and parties that arranged for the transport, disposal, or treatment of hazardous substances; and
* Transporters of hazardous substances to a facility.31
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25 42 U.S.C. Sec. 9614(a).
26 See 40 C.F.R. Sec.Sec. 300.500-300.525.
27 See id. Sec. 300.700.
28 For general overview of liability under CERCLA, see CRS In Focus IF11790, Liability Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), by Kate R. Bowers (2021); see also EPA, Superfund Liability, https://www.epa.gov/enforcement/superfund-liability (last updated Apr. 10, 2025).
29 42 U.S.C. Sec.Sec. 9607(a), 9613(f). CERCLA does not provide a cause of action for members of the public at large, including those who may have been harmed by the release of hazardous substances, to seek damages from parties that are liable for response costs under CERCLA. See infra "Scope of Liability."
30 See 42 U.S.C. Sec. 9601(21) (defining "person" as "an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, United States Government, State, municipality, commission, political subdivision of a State, or any interstate body").
31 Id. Sec. 9607(a).
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Consideration of whether a party is liable as an owner, operator, generator, or transporter is a fact-specific inquiry based on the circumstances of an individual case. As a result, it is not possible to predict with certainty the kinds of entities that will face liability under CERCLA related to FPAS contamination. The parties that could be held liable, if the other preconditions to liability are met and no exemptions apply, are entities that have been involved in releases of PFAS. This includes parties associated with facilities or sites where PFAS was produced, used, or disposed, such as owners or operators of chemical manufacturing or processing facilities that released PFAS; persons who released PFAS from the use of fluorinated aqueous film-forming foam (AFFF), such as airport owners and operators and local fire departments; landfill owners and operators; generators and transporters of PFAS wastes released at landfills or other disposal or treatment sites; and owners and operators of wastewater treatment facilities that discharge PFAS. As discussed below, however, EPA has expressed an intent to refrain from taking enforcement action with respect to some of these categories of entities, as well as to use settlement agreements to protect them from lawsuits brought by other parties.32 Additionally, because CERCLA liability extends to the federal government, the Department of Defense and other federal departments or agencies that released PFAS, such as through the use of AFFF, are also potentially liable.
Some commenters on the proposed designation raised concerns regarding the potential liability of "passive receivers" such as drinking water treatment plants, municipal wastewater treatment facilities, solid waste landfills, and composting facilities.33 Although the term "passive receivers" is not defined in CERCLA, it is generally understood to refer to parties that receive media containing PFAS (and other hazardous substances) but do not themselves manufacture or use those substances. While some of the liability exemptions discussed below may apply, passive receivers are sometimes named as defendants in third-party CERCLA contribution claims brought by PRPs seeking to recoup some of the cleanup costs for which they have been held liable.34 Whether a passive receiver would be obliged to perform or pay for a cleanup of PFAS contamination under CERCLA would depend on numerous factors, including the existence of a response action and the incurrence of response costs, the applicability of various defenses to and exemptions from liability, and (in the case of a federal cleanup effort) EPA's exercise of enforcement discretion.
Questions have also arisen on whether manufacturers of PFAS could be held liable for cleanup costs under CERCLA. A manufacturer could be liable if a release occurred as part of the manufacturing process at a site the manufacturer owned or operated. If a company intended to dispose of a hazardous substance that it manufactured, it might also be liable as an arranger.35 In general, however, CERCLA does not provide a standalone mechanism for holding the manufacturer of a hazardous substance liable solely based on its manufacture of a chemical that another party released into the environment subsequent to purchase. Courts typically do not hold a manufacturer selling a "useful" commercial product liable under CERCLA for the hazardous waste contained in those products.36 In 2009, the Supreme Court held that, although CERCLA liability would attach "if an entity were to enter into a transaction for the sole purpose of discarding a used and no longer useful hazardous substance," an entity would not be liable as an arranger "merely for selling a new and useful product if the purchaser of that product later, and unbeknownst to the seller, disposed of the product in a way that led to contamination."37
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32 See infra "EPA's Enforcement Discretion;" David M. Uhlmann, Assistant Administrator for Enforcement and Compliance Assurance, EPA, PFAS Enforcement Discretion and Settlement Policy Under CERCLA (Apr. 19, 2024), https://www.epa.gov/system/files/documents/2024-04/pfas-enforcement-discretion-settlement-policy-cercla.pdf (hereinafter "EPA PFAS Enforcement Discretion and Settlement Policy."
33 E.g., Am. Pub. Works Ass'n, Comment Letter on Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances (Nov. 7, 2022), https://downloads.regulations.gov/EPA-HQ-OLEM-20190341-0344/attachment_1.pdf.
34 E.g., Transportation Leasing Co. v. California, 861 F. Supp. 931 (C.D. Cal. 1993).
35 E.g., United States v. Gen. Elec. Co., 670 F.3d 377, 385-86 (1st Cir. 2012); Cadillac Fairview/California, Inc. v. United States, 41 F.3d 562, 566 (9th Cir. 1994).
36 E.g., Fla. Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1317 (11th Cir. 1990) (holding that manufacturers of electrical transformers containing mineral oil contaminated with polychlorinated biphenyls were not liable under CERCLA absent evidence that the manufacturers intended to dispose of hazardous waste when selling the transformers).
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Accordingly, the manufacturers of designated PFAS or products containing designated PFAS likely would not be liable under CERCLA simply because the chemicals were released into the environment subsequent to manufacture by entities using those products. If, on the other hand, the manufacturer took intentional steps to dispose of the PFAS-containing products or sold the products with the specific intent to dispose of them, a finding of arranger liability could be more likely. In any case, a court evaluating potential liability would closely examine the manufacturer's intent, the nature of any transaction in selling products to its customers, and the nature and commercial value of the product being sold.38 More commonly, however, PFAS manufacturers have faced suit under other laws, including state environmental laws and tort law.39
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Definition of Release
One prerequisite to liability under CERCLA is a release or threatened release. CERCLA defines "release" as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance or pollutant or contaminant)."40 The definition excludes certain types of activities, including releases that result in exposure only within a workplace; emissions from engine exhaust of a motor vehicle, train, aircraft, vessel, or pipeline pumping station engine; certain releases of nuclear material; and the "normal" application of fertilizer.41
Questions have arisen regarding whether CERCLA liability could arise from the presence of designated PFAS in biosolids, which are the sewage sludge from wastewater treatment facilities. In some cases, biosolids may be applied to agricultural land to fertilize crops.42 EPA has not addressed this question specifically with respect to PFAS, but it has indicated more generally that biosolids placed on the land for a beneficial purpose (such as a fertilizer substitute or soil conditioner) would not constitute a "release" that could give rise to CERCLA liability if the biosolids were applied in accordance with relevant federal requirements.43 Additionally, as discussed below, EPA has indicated that it does not intend to take enforcement action against farms where biosolids are applied to the land.44
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37 Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 610 (2009).
38 E.g., Cal. Dep't of Toxic Substances Ctrl. v. Alco Pac., Inc., 508 F.3d 930, 938 (9th Cir. 2007).
39 See, e.g., N.J. Dep't of Env't Protection v. E. I. DuPont de Nemours & Co., No. 1:19-cv-14758 (D.N.J.). The parties in that case have reached a proposed settlement that, if approved by the court, would require payments of up to $450 million from 3M and up to $875 million from DuPont and related companies. See N.J. Dep't of Env't Protection, 3M PFAS Settlement, https://dep.nj.gov/3m/ (last visited Nov. 15, 2025); N.J. Dep't of Env't Protection, DuPont/Chemours PFAS Settlement, https://dep.nj.gov/dupont/ (last visited Nov. 15, 2025). See also Order and Opinion, In re Aqueous Film-Forming Foams Products Liability Litigation, No. 18-mn-2873, in City of Camden v. EIDP, Inc., No. 2:23-cv-3230 (D.S.C. Feb. 8, 2024), ECF No. 175 (approving settlement in class action on behalf of public water systems).
40 42 U.S.C. Sec. 9601(22).
41 Id.
42 EPA, Land Application of Biosolids, http://epa.gov/biosolids/land-application-biosolids (last updated Jan. 6, 2025).
43 Standards for the Use of Disposal of Sewage Sludge, 58 Fed. Reg. 9248, 9262 (Feb. 19, 1993). EPA regulates the land application of biosolids pursuant to Section 405(d) of the Clean Water Act. See 33 U.S.C. Sec. 1345(d); 40 C.F.R. pt. 503.
44 See infra "EPA's Enforcement Discretion;" EPA PFAS Enforcement Discretion and Settlement Policy, supra note 8, at 8.
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Definition of Hazardous Substance
A substance may be considered a "hazardous substance" for purposes of CERCLA based on either a designation pursuant to CERCLA itself or a designation under another statute to which CERCLA refers.
Section 102 of CERCLA authorizes EPA to designate as hazardous substances elements, compounds, mixtures, solutions, and substances "which, when released into the environment may present substantial danger to the public health or welfare or the environment."45 Section 101(14) of the statute defines "hazardous substance" to include hazardous substances designated pursuant to Section 102.46 It also defines the term with reference to several other statutes to include (1) any substance designated as a hazardous substance under Section 311(b)(2)(A) of the CWA; (2) a characteristic or listed hazardous waste under Section 3001 of the Solid Waste Disposal Act, often referred to as the Resource Conservation and Recovery Act (RCRA); (3) any toxic pollutant listed under Section 307(a) of the CWA; (4) any hazardous air pollutant listed under Section 112 of the Clean Air Act (CAA); and (5) any imminently hazardous chemical or substance or mixture with respect to which EPA has taken action pursuant to Section 7 of the Toxic Substances Control Act.47 Designation pursuant to CERCLA Section 102 does not cause a substance to be considered toxic or hazardous under any of those statutes. Accordingly, designation under CERCLA does not trigger the requirements that apply to toxic or hazardous substances under those statutes, including RCRA's requirements for the treatment, storage, and disposal of materials that are classified as hazardous waste.
Section 102(a) of CERCLA does not specify factors for the EPA Administrator to consider when designating a hazardous substance beyond finding that the substance "may present substantial danger to the public health or welfare or the environment" when released into the environment.48 Currently, there are no regulations that guide the designation process. When EPA announced that it planned to retain the 2024 designation, the agency stated that it intends to develop a Section 102(a) "Framework Rule" to "provide a uniform approach to guide future hazardous substance designations, including how the agency will consider the costs of proposed designations."49
Approximately 800 substances are currently considered hazardous substances pursuant to CERCLA by virtue of their designation under one of the statutes cross-referenced in Section 101(14) of CERCLA.50 Prior to 2024, EPA had never used its Section 102 authority to designate a substance as hazardous under CERCLA. The 2024 designation of PFOA and PFOS represents the first use of EPA's designation authority under Section 102./51
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EPA's 2024 Designation
EPA announced its final designation on April 19, 2024, concluding that PFOA and PFOS, and their salts and isomers, may present substantial danger to public health or welfare or the environment.52 Various industry associations filed petitions for review of the designation, and those challenges were consolidated into a single proceeding that is still pending before the U.S. Court of Appeals for the D.C. Circuit.53 In February 2025, EPA moved to hold the case in abeyance to allow the new administration to review the designation and the litigation.54 The court granted EPA's motion and subsequent requests to extend the abeyance.55 On September 17, 2025, EPA filed a motion indicating that it had completed its review of the designation and decided to retain it.56 The agency asked the court to lift the abeyance and set a schedule to complete briefing. The court granted EPA's motion, and the case is now fully briefed but has not yet been set for oral argument.57
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45 42 U.S.C. Sec. 9602(a).
46 Id. Sec. 9601(14).
47 Id.
48 42 U.S.C. Sec. 9602(a).
49 EPA, Trump EPA Announces Next Steps on Regulatory PFOA and PFOS Cleanup Efforts, Provides Update on Liability and Passive Receiver Issues (Sept. 17, 2025), https://www.epa.gov/newsreleases/trump-epa-announces-next-steps-regulatory-pfoaand-pfos-cleanup-efforts-provides.
50 EPA, CERCLA Hazardous Substances Defined, https://www.epa.gov/epcra/cercla-hazardous-substances-defined (last updated Jan. 14, 2025).
51 See Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances, Proposed Rule, 87 Fed. Reg. 54415, 54421 (Sept. 6, 2022).
52 Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances, 89 Fed. Reg. 39124 (May 8, 2024).
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The immediate effects of the PFAS hazardous substance designation under CERCLA are relatively circumscribed. Releases of a hazardous substance above a threshold amount are subject to reporting requirements, and contracts for the sale or transfer of federal property must disclose the storage, release, or disposal of hazardous substances on the property.58 Listed and designated hazardous substances under CERCLA are also regulated as hazardous material under the Hazardous Materials Transportation Act.59 Additionally, Section 104(a) of CERCLA authorizes EPA to conduct response actions of hazardous substances if there is a release or threatened release; by contrast, EPA must establish that a release or threatened release of a pollutant or contaminant may present an imminent and substantial danger to the public health or welfare in order to exercise its Section 104 response authority.60 While designation also may subject releases of PFOA and PFOS into the environment to CERCLA's liability framework, designation alone does not trigger a public or private response action to address PFAS contamination at any site and is not determinative of any party's liability.
EPA's designation of PFOA and PFOS as hazardous substances affected the status of those two PFAS under CERCLA but not under other federal laws, including RCRA's framework for regulating treatment, storage, and disposal of solid waste and hazardous waste. Because the treatment, storage, and disposal of solid and hazardous wastes is regulated under RCRA, not CERCLA, the designation of PFOA and PFOS as hazardous under CERCLA does not result in requirements for the treatment, storage, or disposal of PFOA or PFOS. Additionally, state mini-Superfund laws may provide their own definition of hazardous substances, though some states define the term to include elements and compounds that are considered hazardous substances under CERCLA.61 To the extent that a state incorporates by reference CERCLA hazardous substances and has not specified that releases of PFAS or PFOA are covered in its cleanup framework, the CERCLA hazardous substance designation would alter the applicability of that state's requirements.
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Other Definitions of Hazardous or Toxic Substances
Designation of a hazardous substance under CERCLA resembles some comparable federal processes for designating hazardous or toxic substances and differs from others. For example, the CWA authorizes EPA to designate hazardous substances and toxic pollutants; neither the statute nor CWA implementing regulations identify more specific criteria for listing a substance as hazardous, and the statutory section on toxic pollutants directs EPA to consider "toxicity of the pollutant, its persistence, degradability, the usual or potential presence of the affected organisms in any waters, the importance of the affected organisms, and the nature and extent of the effect of the toxic pollutant on such organisms" when revising the list of toxic pollutants.62 By contrast, RCRA implementing regulations identify three pathways for listing a solid waste as a hazardous waste; for one of those pathways, EPA is required to consider eleven enumerated factors before making a determination as to whether a solid waste "is capable of posing a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported or disposed of, or otherwise managed."63
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53 Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir.).
54 Motion to Hold Cases in Abeyance, Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir. Feb. 11, 2025), ECF No. 2100170.
55 Orders, Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir. Feb. 24, 2025, Apr. 30, 2025, June 2, 2025, July 3, 2025, Aug. 20, 2025), ECF Nos. 2102403, 2113719, 2118607, 2123879, 2131064.
56 Motion to Govern, Chamber of Commerce of the U.S. v. EPA, No. 24-1193 (D.C. Cir. Sept. 17, 2025), ECF No. 2135418.
57 Order, Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir. Oct. 2, 2025), ECF No. 2138522.
58 42 U.S.C. Sec.Sec. 9602(b), 9603, 9611, 9620(h)(1), 11004.
59 Id. Sec. 9656.
60 Id. Sec. 9604(a).
61 E.g., N.J. STAT. ANN. Sec. 58:10-23.11b; 35 PA. STAT. Sec. 6020.103.
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Some of the laws cross-referenced in CERCLA's definition of hazardous substance impose different immediate requirements once a substance is listed as hazardous or toxic; in some instances, these requirements are more extensive than those triggered by CERCLA designation. The Clean Air Act requires EPA to identify categories of sources that emit hazardous air pollutants and to establish emissions standards for those source categories for those pollutants.64 When a substance is determined to be a hazardous waste under RCRA, it is subject to RCRA's cradle-to-grave regulatory requirements from the time it is created; while it is transported, treated and stored; and until it is disposed.65 Under the Clean Water Act, EPA is authorized to develop effluent limitations for toxic pollutants; states are also required to take certain action with respect to toxic pollutants when developing or revising water quality standards.66 The frequency of designations also varies across the listed statutes. As ratified by Congress in the 1977 CWA amendments, the CWA toxic pollutant list contains 65 entries, some of which represent groups of pollutants.67 EPA removed three pollutants from the list in 1981 but left the overall number of entries unchanged, as the delisted pollutants were specific compounds within entries for listed groups.68 The CWA hazardous substance included 271 hazardous substances when first published by EPA in 1978 and now includes almost 300 substances.69 The initial list of hazardous air pollutants under the CAA included 189 pollutants; EPA has made approximately five additions, deletions, or redefinitions since 1990./70 Under RCRA, over 800 wastes appear on one of four lists of hazardous wastes.71
Other statutes in addition to CERCLA establish liability frameworks for hazardous or toxic substance contamination where certain conditions are met.72 In general, however, CERCLA provides a more comprehensive mechanism than other federal statutes for requiring parties to conduct or pay for the cleanup of contaminated sites.
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62 See 33 U.S.C. Sec.Sec. 1317(a)(1), 1321(b)(2)(A).
63 40 C.F.R. Sec. 26.11(a)(3).
64 42 U.S.C. Sec. 7412(c).
65 42 U.S.C. Sec.Sec. 6921-6939g.
66 See 33 U.S.C. Sec. 1317(a); 40 C.F.R. Sec. 131.11.
67 EPA, Toxic and Priority Pollutants Under the Clean Water Act, https://www.epa.gov/eg/toxic-and-priority-pollutants-underclean-water-act (last updated Apr. 22, 2025); 40 C.F.R. Sec. 401.15.
68 Id.
69 40 C.F.R. Sec. 116.4; CRS Report R45998, Contaminants of Emerging Concern Under the Clean Water Act, by Laura Gatz (2021).
70 EPA, Initial List of Hazardous Air Pollutants with Modifications, https://www.epa.gov/haps/initial-list-hazardous-airpollutants-modifications (last updated Nov. 5, 2025); 40 C.F.R. Sec.Sec. 63.60-63.64.
71 40 C.F.R. part 261; EPA, Defining Hazardous Waste: Listed, Characteristic and Mixed Radiological Wastes, https://www.epa.gov/hw/defining-hazardous-waste-listed-characteristic-and-mixed-radiological-wastes (last updated Dec. 17, 2024).
72 E.g., 33 U.S.C. Sec. 1321(b); 42 U.S.C. Sec. 6928.
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Scope of Liability
Liability under CERCLA is retroactive, strict, and joint and several.73 Retroactive liability means that parties may be liable for the release of hazardous substances prior designation and prior to CERCLA's enactment in 1980. Under CERCLA's strict liability framework, a party may be liable regardless of whether it was negligent. Under joint and several liability, any single party may be liable for all cleanup costs at a site if the harm is indivisible, even if other parties also contributed to the contamination.
PRPs in the listed categories are liable under CERCLA for cleanup costs incurred by the U.S. government or a state or tribe that are "not inconsistent" with the National Contingency Plan (NCP), the regulations governing response actions taken under CERCLA.74 This means that after a government or private party incurs cleanup costs, it may sue one or more PRPs under CERCLA to recover those costs. Those PRPs, in turn, often have the right under CERCLA to seek contribution from any other PRPs, and may seek to join them as additional parties to the same CERCLA action. These actions are described in more detail below.75 Although each of those PRPs is jointly and severally responsible for all of the applicable cleanup costs, this liability framework allows many parties that are potentially liable for the contamination at a given site to seek an equitable allocation of those costs in a single litigation. This framework is also intended to encourage capable parties to carry out response actions even before liability is settled, and to ensure that response actions take place even if some PRPs are no longer available to contribute.
PRPs are also liable for injury to natural resources, meaning that they must either restore natural resources that are injured as a result of a release or pay for restoring or replacing the injured or lost natural resources.76 Unlike claims for cleanup costs, claims for natural resource damages may be brought only by federal, state, or tribal trustees.77 Additionally, PRPs may be liable for the cost of natural resource damage assessments and federal public health studies at release sites.78
CERCLA and its liability framework largely focus on cleanup actions and on the costs incurred for those actions. The scope of liability under CERCLA does not include product liability, liability for personal injury or property damages, or health effects or medical costs resulting from a release. Such claims may be available under state law, including common law. Additionally, the Federal Tort Claims Act authorizes some tort claims against the U.S. government, but not when claims implicate government actions involving the exercise of judgment or choice.79
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73 See EPA, Superfund Liability, https://www.epa.gov/enforcement/superfund-liability (last updated Apr. 10, 2025).
74 42 U.S.C. Sec. 9607(a).
75 See Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 161-63 (2004); United States v. Atl. Research Corp., 551 U.S. 128, 131-33 (2007).
76 42 U.S.C. Sec. 9607(a).
77 Id. Sec. 9607(f).
78 Id. Sec. 9607(a).
79 28 U.S.C. Sec.Sec. 1346, 2680(a). The United States has invoked the discretionary function exemption to the Federal Tort Claims Act to argue that it is not liable in pending multidistrict litigation challenging the United States military's use and handling of aqueous film forming foam (AFFF), which allegedly resulted in PFAS contamination of groundwater. See United States of America's Memorandum of Law in Support of Its Omnibus Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(1), In re Aqueous Film-Forming Foams Products Liability Litigation, MDL No. 2:18-mn-2873-RMG (D.S.C. Feb. 26, 2024), ECF No. 4548. On February 27, 2025, the court declined to dismiss all of the Federal Tort Claims Act claims, holding that site-specific, material facts were still in dispute. In a separate order issued the same day, the court dismiss failure to warn claims brought by four dairy farms, but declined to dismiss other tort claims brought by those plaintiffs. Orders, In re Aqueous FilmForming Foams Products Liability Litigation, MDL No. 2:18-mn-2873-RMG (D.S.C. Feb. 27, 2025), ECF Nos. 6728, 6730. For additional information on the Federal Tort Claims Act, see CRS Report R45732, The Federal Tort Claims Act (FTCA): A Legal Overview, by Michael D. Contino and Andreas Kuersten (2023).
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Federal Enforcement Mechanisms
The scope of EPA's enforcement authority under CERCLA is narrower than its response authority.
Although CERCLA authorizes federal actions to respond to a release of pollutants, contaminants, and hazardous substances, the statute only authorizes EPA to compel a party to pay for or perform a response action if that party caused or contributed to a release of a hazardous substance. The designation of PFOA and PFOS as hazardous substances means that EPA may now use its enforcement authority to compel parties to clean up or finance the cleanup of contamination of those substances.
CERCLA establishes three mechanisms that EPA may use to enforce liability under the statute--that is, to require parties to bear the response costs for which CERCLA makes them liable. First, EPA can compel PRPs to perform a cleanup. Section 106(a) authorizes EPA to issue a unilateral administrative order, or to seek a judicial order, requiring a PRP to take actions to address "imminent and substantial endangerment to the public health or welfare or the environment" resulting from a release or threatened release of a hazardous substance.80 CERCLA also authorizes fines and punitive damages for noncompliance with such an order.81 If a party complies with an order and can establish that it is not liable under CERCLA or that the required cleanup actions were arbitrary and capricious, it may seek reimbursement from the Superfund Trust Fund.82 Alternatively, a liable party may seek to recover response costs from other PRPs, as explained below.
Second, EPA can conduct a cleanup itself and seek to recover its response costs from one or more PRPs pursuant to Section 107(a).83 These lawsuits are known as "cost recovery" actions. EPA typically pursues cost recovery after a removal action or one of its phases is completed.84 States and tribes may also pursue cost recovery under Section 107(a). Cleanup actions must be "not inconsistent" with the NCP for the costs to be recoverable by the United States, states, or tribes.85 Prior to seeking cost recovery from a PRP in court, EPA generally sends a written demand letter to that PRP that includes information about the site, the response action, costs already incurred or to be incurred, and a demand for payment.86
Finally, EPA can enter into a negotiated settlement with PRPs to perform some or all of the cleanup.
CERCLA authorizes EPA to enter into an agreement with a PRP to allow the PRP to conduct or finance a response action if EPA determines that the PRP will do so properly and promptly.87 EPA's preference is to seek to resolve liability through negotiated settlement agreements instead of pursuing a Section 106 order or a cost recovery action.88 Consistent with the statute's directive to facilitate settlement "[w]henever practicable and in the public interest" to expedite effective cleanups, and minimize litigation, the majority of cleanups are resolved through negotiated agreements.89 All settlement agreements under CERCLA must be in the public interest and consistent with the NCP.90
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80 42 U.S.C. Sec. 9606(a).
81 Id. Sec. 9606(b).
82 Id.
83 Id. Sec. 9607(a).
84 See Office of Solid Waste and Emergency Response, EPA, OSWER Directive No. 9832.3-1A, Cost Recovery Actions/Statute of Limitations 2 (1987).
85 42 U.S.C. Sec. 9607(a).
86 See Office of Solid Waste and Emergency Response, EPA, OSWER Directive No. 9832.18, Written Demand for Recovery of Costs Incurred Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) 5-6, 8-9 (1991).
87 42 U.S.C. Sec.Sec. 9604(a), 9622(a).
88 EPA, Negotiating Superfund Settlements, https://www.epa.gov/enforcement/negotiating-superfund-settlements (last updated June 2, 2025).
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Under Section 122, voluntary settlement agreements may include a covenant not to sue, which limits a PRP's future liability to the United States related to the release or threatened release.91 Additionally, parties to voluntary settlement agreements receive protection from other types of CERCLA lawsuits, as described below. A settlement with one PRP does not preclude EPA from taking action under Sections 106 or 107 with respect to other PRPs.92
Some parties have unique circumstances that affect EPA's settlement procedures. For example, Section 122(g)(1) of CERCLA directs EPA to negotiate expedited settlements "[w]henever practicable and in the public interest" with parties that contributed a relatively small amount of wastes to a site.93 EPA maintains policies and streamlined model settlement documents that apply specifically to these de minimis contributors.94 For other categories of parties, EPA may exercise its discretion and decline to pursue enforcement, as described below and as EPA has specifically exercised in the context of PFAS.
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Suits by Private Parties to Recoup Cleanup Costs95
Although CERCLA allows any one party to be held liable for all cleanup costs even if other parties also contributed to contamination at a site, the statute also allows private parties to recoup their cleanup costs from other PRPs through two separate mechanisms. First, when a private party incurs costs, it may sue under Section 107(a) to recover from another PRP all costs that are necessary and consistent with the NCP.96
Second, when a private party is sued under Section 106 or 107(a) or has resolved its liability to the United States or a state for some or all of a response action, it may then assert a claim or counterclaim under Section 113(f) to require other PRPs to bear an equitable share of the response costs.97 Claims under Section 113(f) are generally referred to as contribution claims. Cost recovery and contribution actions are mutually exclusive.
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89 See Atl. Richfield Co. v. Christian, 140 S. Ct. 1335, 1355 (2020) (describing settlements as "the heart" of CERCLA and noting that EPA's efforts to negotiate settlement agreements and issue cleanup orders account for approximately 69 percent of cleanup work underway as of 2020).
90 42 U.S.C. Sec. 9622(a).
91 Id. Sec. 9622(c)(1).
92 Id. Sec. 9622(c)(2).
93 Id. Sec. 9622(g)(1).
94 See EPA, Revised Settlement Policy and Contribution Waiver Language Regarding Exempt De Micromis and Non-Exempt De Micromis Parties (Nov. 6, 2002), https://www.epa.gov/sites/default/files/2013-09/documents/wv-exmpt-dmicro-mem.pdf; Office of Waste Programs Enforcement, EPA, OSWER Directive No. 9834.7-1D, Streamlined Approach for Settlements with De Minimis Waste Contributors under CERCLA Section 122(g)(1)(A) (1993); EPA, De Minimis Contributor Consent Decree, https://cfpub.epa.gov/compliance/models/view.cfm? model_ID=538 (last revised Mar. 15, 2023); see also EPA, Unique Parties and Superfund Liability, https://www.epa.gov/enforcement/unique-parties-and-superfund-liability (last updated Oct. 5, 2023).
95 In addition to the cost recovery and contribution claims allowed under Sections 107(a) and 113(f) of CERCLA, Section 310, CERCLA's citizen suit provision, allows "any person" to file a lawsuit against any person, including the U.S. government and "any other governmental instrumentality or agency . . . who is alleged to be in violation of any standard, regulation, condition, requirement, or order which has become effective" pursuant to CERCLA." 42 U.S.C. Sec. 9659(a)(1). It also authorizes suits against the U.S. government for failure to perform a nondiscretionary duty under the statute. Id. Sec. 9659(a)(2). Citizen suits may be used to challenge the adequacy of a CERCLA cleanup, but they do not provide a mechanism for determining that an entity is liable for response costs as a PRP. Additionally, Section 113(h) limits the filing of a citizen suit until after a cleanup is completed, and parties may not challenge a removal action at a site where a remedial action is planned. Id. Sec. 9613(h).
96 United States v. Atl. Research Corp., 551 U.S. 128, 141 (2007).
97 42 U.S.C. Sec. 9613(f)(1), (f)(3)(B). Congress added an explicit right of contribution to CERCLA in the Superfund Amendments and Reauthorization Act of 1986 (SARA). Pub. L. No. 99-499, Sec. 113(b), 100 Stat. 1613, 1647 (1986). Prior to SARA's enactment, courts had inferred an implied right of contribution as a corollary to the joint and several liability scheme imposed generators, recyclers, service station dealers, cleanup contractors, contiguous landowners, bona fide prospective purchasers, lenders and fiduciaries, and parties that are not responsible for contamination but volunteer to help with cleanup.105
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A party that may bring a Section 113(f) contribution action must proceed under Section 113(f); the party is precluded from proceeding with a cost recovery action under Section 107(a).98 Section 113(f) specifies that a court resolving contribution claims "may allocate response costs among liable parties using such equitable factors as the court determines are appropriate."99 The most commonly considered factors in an equitable allocation relate to the degree to which the contamination and cleanup costs are attributable to each party's actions, the nature and amount of the hazardous substances involved, the extent of each party's culpability, and the degree to which each party benefited from the disposal.100 Section 113(f) also protects a party that has resolved its CERCLA liability to the United States or a state in a settlement.101 The party cannot be held liable for contribution claims by other PRPs regarding matters addressed in that settlement. This is referred to as contribution protection. Other PRPs that are not parties to the settlement do not receive contribution protection unless the agreement specifically provides for their liability to be discharged, but their potential liability is reduced by the amount of the settlement.102 The question of whether a specific contribution claim relates to a "matter addressed" in a prior settlement depends on the specific terms of the settlement agreement. In evaluating whether contribution claims are barred against a settling PRP, courts have considered the hazardous substance at issue in the settlement, the location of the site, the time frame covered by the settlement, and the cost of the cleanup.103
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Defenses to and Limitations on Liability
In addition to the various exclusions to the elements of CERCLA liability described above, CERCLA establishes defenses to and limitations on liability associated with certain kinds of releases or parties that further circumscribe the scope of liability under the statute. Section 107(b) of CERCLA provides defenses to liability where an otherwise liable party can establish that a release or threat of release and resulting damages were caused solely by (1) an act of God; (2) an act of war; (3) an act or omission of a third party with whom the defendant has no contractual relationship, where the defendant exercised due care and took precautions against the third party's foreseeable acts or omissions and their consequences; or (4) any combination of the three circumstances listed above.104 Other subsections of Section 107 provide exemptions and protections for parties who meet certain criteria, including municipal solid waste under Section 107(a). E.g., United States v. New Castle Cnty., 642 F. Supp. 1258, 1268-69 (D. Del. 1986); Colorado v. Asarco, Inc., 608 F. Supp. 1484, 1490-91 (D. Colo. 1985); United States v. Conservation Chem. Co., 619 F. Supp. 162, 214-15 (W.D. Mo. 1985); United States v. Wade, 577 F. Supp. 1326, 1338 (E.D. Pa. 1983); United States v. Ottati & Goss, Inc., 630 F. Supp. 1361, 1395 (D.N.H. 1985). Congress intended the 1986 amendments to "[clarify] and [confirm]" the right of PRPs to seek contribution from other PRPs. S. REP. NO. 99-11, at 44 (1985).
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98 See Atl. Research, 551 U.S. at 139; Whittaker Corp. v. United States, 825 F.3d 1002, 1007 (9th Cir. 2016) ("[E]very federal court of appeals to consider the question . . . has said that a party who may bring a contribution action for certain expenses must use the contribution action, even if a cost recovery action would otherwise be available."). Cost recovery actions under Section 107(a) and contribution actions under Section 113(f) are subject to differing statutes of limitations. See 42 U.S.C. Sec. 9613(g)(2)(A)-(B) (six-year statute of limitations for cost recovery actions), 9613(g)(3)(B) (threeyear statute of limitations for contribution actions).
99 42 U.S.C. Sec. 9613(f)(1).
100 See, e.g., Env't Transp. Sys., Inc. v. ENSCO, Inc., 969 F.2d 503, 508 (7th Cir. 1992) (describing the six "Gore" factors, named for an amendment proposed by Rep. Al Gore identifying factors to be considered in apportioning costs).
101 42 U.S.C. Sec. 9613(f)(2).
102 Id.
103 E.g., Akzo Coatings, Inc. v. Aigner Corp., 803 F. Supp. 1380, 1385 (N.D. Ind. 1992); United States v. Union Gas Co., 743 F. Supp. 1144, 1154 (E.D. Pa. 1990).
104 Id. Sec. 9607(b).
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(Continues with Part 2 of 2)
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Original text here: https://www.epw.senate.gov/public/_cache/files/7/5/750a4b1c-2980-4b5b-806c-14cac7fded25/2099376A93A70A9EF1680FB6F39A13658F1568B257EE16AF24CF8CC1D66167FD.11-19-2025-bowers-testimony.pdf
Clean Harbors Co-CEO Gerstenberg Testifies Before Senate Environment & Public Works Committee
WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following testimony by Clean Harbors Co-CEO Eric Gerstenberg from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances.* * *
Madame Chair, Ranking Member Whitehouse, and members of the Committee, my name is Eric Gerstenberg, and I am the co-CEO of Clean Harbors, the nation's leader in environmental services. My testimony today draws upon our 45 years of experience in delivering a broad range of services including hazardous and non-hazardous ... Show Full Article WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following testimony by Clean Harbors Co-CEO Eric Gerstenberg from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances. * * * Madame Chair, Ranking Member Whitehouse, and members of the Committee, my name is Eric Gerstenberg, and I am the co-CEO of Clean Harbors, the nation's leader in environmental services. My testimony today draws upon our 45 years of experience in delivering a broad range of services including hazardous and non-hazardouswaste management, and emergency response.
I will summarize my written statement and respectfully request that my full statement be included in the hearing record.
Thank you for the opportunity to address the intersection of hazardous waste management and the challenge of emerging contaminants - and more specifically, the Resource Conservation and Recovery Act (or RCRA), and PFAS (or "forever chemicals.")
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RCRA framework
RCRA was enacted in 1976. Before that the landscape of waste management was vastly different than today. Across America, hazardous waste was often disposed of in open dumps, abandoned lots, or poorly constructed landfills. Drums were left to rust and leak, contaminating soil and groundwater. Environmental disasters were common.
RCRA changed all of that by establishing a comprehensive federal framework for the safe management of hazardous waste.
Today, we face new challenges. PFAS compounds were used for decades in firefighting foams at places like airports, firefighting schools and military installations; and also used in coatings, consumer goods and other applications.
The presence of PFAS in groundwater, soil, and drinking water is widespread. In fact, nearly everyone in this room today has some level of PFAS in their bloodstream. It is a growing concern for regulators, communities, and industry alike. The science is clear: PFAS does not break down naturally and is a serious threat to human and animal health. At Clean Harbors, we believe the existing RCRA framework provides the tools to manage PFAS waste safely.
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Clean Harbors background
We have operations in all 50 states and Canada, with a vast transportation network and facilities strategically located nationwide. Our company operates 10 RCRA-permitted high temperature incinerators and 7 hazardous waste landfills. Our 360,000 customers include the Fortune 500, as well as government agencies.
Through our 25,000 employees, we deliver cradle-to-grave solutions under the RCRA framework, ensuring that every shipment is tracked and every community is protected. Clean Harbors has an industry-leading safety record. Our technical expertise and that commitment to safety are at the heart of everything we do.
Clean Harbors is also a national provider of critical response services. We have addressed events such as the Deepwater Horizon oil spill, the East Palestine Ohio train derailment, and the recent fatal plane crash in Louisville, Kentucky.
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PFAS destruction testing & partnership with EPA and Pentagon
Regarding PFAS, we introduced a Total PFAS Solution with offerings ranging from lab analytics to water filtration to site remediation to disposal. Last November, we completed our third fullscale PFAS destruction testing at our RCRA-permitted incinerator in Utah. This study was completed in partnership with the EPA ORD Office and the Pentagon's Military SERDP Office.
The peer-reviewed results of this study was recently released by EPA and it demonstrates that common legacy PFAS is effectively destroyed in RCRA permitted, high-temperature incineration systems at levels exceeding 99.9999 percent while limiting emissions to 2-8 orders of magnitude below any state ambient air limit or guideline.
Sophisticated incineration facilities like ours provide an opportunity to address a top health and safety concern of Americans in impacted communities - including military service members and their families at hundreds of military installations.
For PFAS to be fully addressed, many are looking to the EPA to provide a PFAS regulatory framework beyond its initial drinking water standard. Clean Harbors is proud to have partnered with the EPA and the Pentagon for science-based testing to validate an effective method for destroying PFAS in various forms, even at high concentrations.
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Disposal Hierarchy, Solutions, and Hierarchy
At Clean Harbors, we have done extensive analysis on the PFAS contamination footprint throughout the US. We believe there is adequate capacity to manage PFAS contamination in the environment through the following hierarchy:
* Highly contaminated soils, liquids, and AFFF foam, should be properly remediated and destroyed in high temperature RCRA permitted incinerators.
* Lower contaminated materials can be adequately managed through RCRA permitted subtitle C landfills which have extensive liners and closed loop leachate collection systems.
* Very low contaminated material, such as construction debris and soils excavated for the development of infrastructure which have "background" PFAS levels, never exposed to AFFF firefighting foam, can be managed to properly lined Subtitle D landfills and deep well injection.
In addition to managing solids and AFFF concentrate there is an enormous amount of water that has been impacted by PFAS containing AFFF and other sources of PFAS used in countless products that we use every day. Treating drinking water and industrial water that flows into our rivers, streams and WWTPs can be treated with systems that utilize media to separate and purify PFAS contaminants from water. The management of this media that has collected and concentrated PFAS from millions of gallons of water can also be managed to the end of its' lifecycle through high temperature RCRA permitted incineration. Clean Harbors currently treats and manages drinking water following this process at Joint Base Pearl Harbor-Hickam Naval Base in Hawaii.
There is adequate RCRA permitted and subtitle D capacity throughout the US to properly manage all PFAS contaminated sites for years to come through this infrastructure that adequately protects human health and the environment.
We look forward to continuing that partnership and applying our diverse capabilities to address the scourge of PFAS.
Thank you for the opportunity to testify today. We appreciate the Committee's leadership on this critical topic and are happy to address any questions you have.
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Original text here: https://www.epw.senate.gov/public/_cache/files/a/6/a658288c-7d96-415c-b183-7b33d408d2d5/FD0092E940B511531D9846174837CE431DF34ABF6044FF7F20D64ACA0A10575C.11-19-2025-gerstenberg-testimony.pdf
Associated General Contractors General Counsel Pilconis Testifies Before Senate Environment & Public Works Committee
WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following written testimony by Leah Pilconis, general counsel for the Associated General Contractors of America, from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances.* * *
Chairman Capito, Ranking Member Whitehouse, and members of the Environment and Public Works Committee, thank you for the opportunity to testify before you today. My name is Leah Pilconis, and I serve as General Counsel for the Associated General Contractors ... Show Full Article WASHINGTON, Dec. 2 -- The Senate Environment and Public Works Committee released the following written testimony by Leah Pilconis, general counsel for the Associated General Contractors of America, from a Nov. 19, 2025, hearing entitled "Future of PFAS Cleanup and Disposal Policy." PFAS stands for per- and polyfluoroalkyl substances. * * * Chairman Capito, Ranking Member Whitehouse, and members of the Environment and Public Works Committee, thank you for the opportunity to testify before you today. My name is Leah Pilconis, and I serve as General Counsel for the Associated General Contractorsof America (AGC).
AGC is the leading association in the construction industry, representing more than 28,000 firms.
This includes America's leading general contractors and specialty-contracting firms, many of which are small businesses. Many of the nation's service providers and suppliers are also associated with AGC through a nationwide network of 87 state and local chapters. AGC contractors are both union and open shop and are engaged in the construction of the nation's highways, bridges, tunnels, airports, transit systems, waterworks facilities, waste treatment facilities, levees, locks, dams, multifamily housing projects, commercial buildings, and more.
In my role as general counsel for AGC, I lead the association's legal, regulatory, and risk management work to support contractors across all sectors of the construction industry. I focus on contract administration, environmental and safety compliance, insurance coverage, and the operational risks facing construction firms nationwide. I work closely with AGC's advocacy and legal teams--along with outside counsel--on federal regulatory and judicial matters affecting the industry, including litigation in federal and state courts. I was invited to testify in front of this venerable committee to explain the challenges contractors face under EPA's current approach to per- and polyfluoroalkyl substances (PFAS) regulation.
Contractors are on the front lines of constructing, maintaining, and improving the nation's infrastructure and routinely encounter emerging contaminants and pollutants in the field, including PFAS. The construction industry does not manufacture or intentionally use PFAS, but contractors build and repair projects in every community across the country and can encounter PFAS wherever they work and in some products. Some of the most common occurrences arise during infrastructure work, including the construction of roads, water infrastructure, airports, and projects on or near military facilities.
AGC supports congressional efforts to modernize environmental liability laws. Doing so allows the construction of our nation's infrastructure to continue without unfairly penalizing those who did not cause the PFAS pollution problem. To be clear, AGC is not wading into the debate about the science or safety of PFAS. Our message is straightforward: contractors need reasonable liability protections and a meaningful path to compliance when they encounter PFAS.
In 2024, the EPA designated two types of PFAS as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERLCA). As this Committee knows, liability under CERCLA is strict, retroactive, and joint and several./1
It is triggered regardless of fault or intent. This approach exposes contractors to liability for any interaction with PFAS - even in situations where the work was completed decades ago, and the contractor had no way of knowing what they were dealing with. It's an untenable status quo and one we felt compelled to challenge in court./2
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1 Under CERCLA, cleanup liability is strict, retroactive, and joint and several, which means a contractor can be held responsible for the entire cost of cleanup, even if they did not know about or cause the contamination and even if others contributed more.
2 Chamber of Commerce of the United States of America, et al. v. U.S. Environmental Protection Agency, et al., No. 24-1193 (D.C. Cir. 2024).
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PFAS is creating significant costs now, even without federal cleanup orders under CERCLA. Looking at what is happening on the ground today, AGC members say the uncertainty and potential liabilities associated with PFAS are discouraging bidders, shrinking the pool of qualified contractors, and increasing overall project costs. (See Appendix for AGC member examples.) These increased costs, as explained in more detail throughout this statement, include:
* Increased Trucking and Handling Costs - Hauling away contaminated debris requires more testing and training for drivers and special protocols. This increases costs significantly./3
* Increased Disposal Costs -Some landfills are refusing waste with trace levels of PFAS, forcing contractors to haul waste longer distances to specially designated hazardous waste landfills, which are limited, more expensive, and often further away than traditional landfills. This drives up construction costs and causes delays while contractors stop work, test and store materials, locate alternative disposal sites, and renegotiate with owners for compensation.
* Increased Consulting, Testing, and Insurance Costs - Site investigations, testing, and engaging qualified environmental legal professionals are costly, coupled with diminished insurance coverage.
* Reduced Use of Recycled Construction Materials - The construction industry relies heavily on recycling to reduce costs and environmental impacts. However, with the increased PFAS liability, contractors will be limited in the material (reclaimed aggregate, soil, asphalt) they can recycle. This reduces recycling options and increases reliance on costlier virgin materials.
The EPA's "direct-to-Superfund" designation of PFOA and PFOS as hazardous substances under CERCLA exposes contractors to significant legal and financial risk without providing a clear compliance path for the construction industry. EPA has not set background levels or soil or groundwater thresholds (concentration limits) that would indicate when materials have restricted or unrestricted uses. Nor has EPA issued clear standards for the management or disposal of PFASimpacted soil or water encountered during routine work./4
In this vacuum, project owners are choosing not to test materials for PFAS. As a result, contractors performing excavation, trenching, and dewatering activities are stuck with the risk of unknowingly handling PFAS and face cleanup liability or private-party litigation for contamination they did not create, could not reasonably detect, and have received no federal direction on how to manage. EPA would ask our contractors to ignore the specter of that liability and to trust in EPA's discretion. We cannot do so.
In addition to a lack of guidance, EPA's PFAS rule creates substantial uncertainty in contract negotiations - sometimes pushing contractors to absorb increased transportation, testing, and disposal costs without a contractual avenue for recovery. At the same time, the industry is seeing more insurers carve out PFAS exclusions and limitations from environmental and general liability policies. These policies are either excluding PFAS outright or undergoing heightened levels of underwriting scrutiny, often leading to very tight conditions, high deductibles, and low sublimits for PFAS. Faced with these uncertainties, many contractors are forced to price potential PFAS risks into their bids--driving up the cost of public infrastructure projects and ultimately increasing costs for taxpayers.
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3 CERCLA mandates that the Secretary of Transportation must regulate all listed "hazardous substances" as hazardous materials under federal transportation law; the Hazardous Materials Transportation Act (42 USC Sec.9656). Even though the U.S. Department of Transportation (DOT) has not yet issued PFAS-specific hazardous-materials rules, construction companies hauling away debris containing PFAS will eventually need specialized truck drivers who have a Commercial Driver's License (CDL) and a Hazardous Materials Endorsement on their CDL.
4 EPA's Interim Guidance on the Destruction and Disposal of Perfluoroalkyl and Polyfluoroalkyl Substances and Materials Containing Perfluoroalkyl and Polyfluoroalkyl Substances--2024 states: "It does not establish what concentrations of PFAS in wastes, spent products, or other materials or media would necessitate destruction or disposal.
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All of this uncertainty and the inability to fairly allocate and/or transfer PFAS risk limit competition.
Contractors are increasingly hesitant to bid on PFAS-suspect projects, decreasing the pool of qualified bidders for public and large infrastructure projects (such as airports and military bases) and increasing the cost of such projects.
In EPA's statement from September 17 announcing that PFOA and PFOS will remain classified as hazardous substances under CERCLA, Administrator Lee Zeldin acknowledged that new statutory language from Congress is needed to fully address the Agency's concern with passive receiver liability. AGC of America agrees. We urge Congress to use its authority to establish protections for contractors who incidentally encounter PFAS during construction infrastructure activities.
AGC has consistently advocated for a measured approach to environmental challenges such as PFOA and PFOS. PFAS is commonly referred to as ubiquitous, and as such, its regulation under CERCLA raises equally ubiquitous liability concerns for public and private entities. Given the decades of historic uses of PFAS, as well as current uses, AGC has repeatedly shared concerns that taking the right regulatory approach to the PFAS challenge is critical. Yet EPA has not acknowledged or addressed the significant impact of its CERCLA action on the construction industry. The construction industry is poised to be part of the solution, but the industry cannot play that role effectively unless Congress and the Administration recognize and mitigate the unprecedented liability risks created by this rule./5
My testimony will outline AGC's concerns on PFAS liabilities and issue AGC's Call to Action, which asks the Committee to do the following:
1. Ensure CERCLA liability is not transferred to contractors who do not manufacture or knowingly encounter PFAS.
2. Direct EPA to establish clear PFAS waste disposal/reuse standards to provide the clarity industry needs to manage this waste stream.
3. Reduce risk around cost estimates and schedules due to the discovery of PFAS.
4. Take actions to ensure PFAS enforcement does not drive up the costs of road, bridge, and other infrastructure construction.
A. CERCLA Creates Unique and Disproportionate Liability Risks for Contractors
Strict, retroactive liability under CERCLA means a contractor could be held responsible for PFAS cleanup costs even if the contractor did not know about the contamination. EPA's enforcement discretion/6 does not protect contractors from third-party lawsuits (e.g., cost contribution claims or actions under common law for negligence). For example, if a contractor disposes of construction debris at a landfill, the contractor could still face liability if, decades later, that debris was found to contribute to PFAS contamination. Contractors could even face liability for moving material from one part of the job site to another - a daily occurrence in construction - if they unknowingly spread contamination./7
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5 As discussed in this statement, CERCLA Sec.119 protects contractors from cleanup liability only when they are performing an EPA- or state-directed response action. It does not protect contractors doing ordinary construction work where PFAS is encountered incidentally. 42 U.S.C. Sec. 9619.
6 EPA's current enforcement discretion policy is a policy choice, not a legal exemption. EPA or a future administration may withdraw that discretion. Available online at: https://www.epa.gov/enforcement/pfas-enforcement-discretion-andsettlement-policy-under-cercla.
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Unlike a fixed facility with a known waste stream, a construction firm's work spans hundreds of sites, stretching over decades of operations that may involve moving dirt, dewatering, demolishing older structures, and placing recycled fill materials. The work does not involve just one landfill, offsite property, or active site, but countless numbers of sites--not a singular facility. While testing may be required in the future, environmental site assessments and clean-fill tests have not historically included PFAS, generally leaving contractors with no way to know whether their past projects involved PFAS-impacted materials.
When EPA finalized the hazardous substance designation, it threw the entire construction industry into immeasurable liability for past projects and left them without a means or compliance path to manage PFAS risk on future projects. PFAS has become the "hot potato" of our childhood games with real-world consequences on who gets stuck with the risk and pays the "PFAS premium" on public and private projects. AGC maintains that it should not be the contractor who pays.
Under current law, only those performing EPA- or state-directed cleanups qualify as Response Action Contractors (RACs) under CERCLA Sec.119 and receive liability protection. A construction firm that incidentally disturbs PFAS-contaminated soil during normal work does not. This leaves wellintentioned contractors vulnerable to potential CERCLA liability as "operators" or "arrangers" or "transporters." The protection offered to response action contractors,/8 or those who are retained specifically for hazardous substance clean-up work,/9 does not apply to the overwhelming majority of contractors that encounter PFAS in the ordinary course of their business.
Lastly, contractors face exposure to future CERCLA liability when historic Superfund sites are reopened for PFAS. For example, if a contractor was brought in as a de minimis contributor to a landfill cleanup, that site could be reopened now for PFAS.
Congress can help by clarifying that contractors performing construction are not potentially responsible parties (PRPs) under CERCLA and extending Response Action Contractor (Sec.119)-type liability protections.
B. PFAS Magnifies Contractual Risk and Is Disrupting Insurance Markets
Because EPA has not set background levels or soil or groundwater thresholds (concentration limits) for PFAS--nor provided disposal or management standards for PFAS-impacted materials--there is no clear framework for how construction firms should comply. In the absence of federal direction, many owners are opting not to test, which pushes the liability and financial exposure onto contractors who may unknowingly encounter PFAS during routine excavation or dewatering, for example. The lack of a federal directive and the lack of innocent contractor and passive receiver protections are complicating contract negotiations and disrupting insurance markets.
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7 If PFAS contamination is released, spread, or transported offsite during the work, that contractor could technically meet CERCLA's broad definition of a potentially responsible party (PRP) even though the contractor had no knowledge of the contamination and no ability to prevent encountering it.
8 42 U.S.C. Sec. 9619.
9 42 USC Sec. 9619(e)(2).
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PFAS risk is increasingly being pushed onto contractors through contract language that holds them responsible for managing and disposing of waste. Even with due diligence ahead of bidding for a project, the contractor will likely not have the opportunity (or permission) to test in advance to know whether PFAS is present. This is exacerbated by the fact that PFAS is not identifiable via a sheen like oil or an odor like other types of contamination. Without testing, it is unlikely the contractor will know it is present. This means a contractor can encounter PFAS in water, soil, concrete, or other paving materials on a project without forewarning.
Owners themselves often avoid PFAS discussions, which enables them to shift risks on a project to the contractor. Many contracts assign contractors all "risk" for "unknown" contamination, defined as any contamination not disclosed by the owner or reasonably ascertainable by the contractor's due diligence, often while providing the contractor no schedule or cost relief for managing site contamination. This trend leaves contractors with unbounded liability risks when PFAS is present.
(See Appendix for AGC member examples.)
In order to help its member companies plan for PFAS risk, AGC has released a "questions and considerations" document that looks at potential pitfalls before and after work starts on a project./10
The document by necessity addresses contractual risks, noting key site documentation to consider, siting, testing, and whether the contract states who is responsible for what and any compensation to the contractor for differing site conditions. Other factors a contractor must consider are hazardous materials restrictions and liabilities governed by insurance and indemnity clauses.
Given this environment, AGC urges Congress to require public owners to:
* Retain CERCLA liability (CERCLA Section 107);
* Test for the presence of PFAS prior to project construction;
* Develop cost-sharing mechanisms to compensate for known and unknown contamination; and
* Allow PFAS storage on site or designate disposal facilities that knowingly permit the material.Insurance Coverage Is Collapsing Under PFAS Pressure PFAS-related liability risk cannot simply be transferred through insurance. Many insurers are now imposing PFAS exclusions, restrictions, or heightened underwriting requirements across environmental and general liability policies. AGC members and news sources report:
* PFAS exclusions added to commercial general liability (CGL) and contractor's pollution liability (CPL) policies;
* Coverage denials or nonrenewals for contractors working near PFAS-suspect sites;
* Special PFAS riders, high deductibles, and low sublimits where coverage is offered at all;
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10 AGC of America, General Contractors: Questions and Considerations Related to PFAS, October 2025 (available online at: https://news.agc.org/wp-content/uploads/2025/10/PFAS-Questions-and-Considerations-Final.pdf).
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* Exclusions for "emerging contaminants" now being used to capture PFAS; and
* PFAS exclusions increasingly added at renewal, even if not present in prior years./11
Some larger insurers may continue offering limited PFAS-related coverage, but contractors-- especially small and mid-sized firms--purchase a wide range of policies across the insurance market, and many do not carry all coverage types. Whether past work is covered depends entirely on the historic policy period, and even then, the dollar limits reflect outdated market prices and are inadequate for PFAS cleanup.
This insurance uncertainty mirrors the regulatory uncertainty. Without clear federal guidance on how PFAS must be handled, transported, or disposed of, insurers cannot reliably underwrite the risk, and contractors cannot know whether their normal operations could trigger future liability.
Critical to the solution moving forward is for EPA to expedite the issuance of clear PFAS waste disposal and reuse standards, along with PFAS concentration thresholds that distinguish between restricted and unrestricted reuse. This would provide the certainty to justify testing and to plan for the added costs of managing PFAS-impacted materials.
Congress can help by directing EPA to establish disposal/reuse standards to provide the clarity industry needs to manage this waste stream. This would reduce risk around cost estimates and schedules due to the discovery of PFAS.
But EPA action alone is not enough. As explained above, AGC urges Congress to enact innocent contractor and passive receiver protections and to require public owners to test for PFAS during the project planning stage for federally funded projects. Early testing ensures contaminated sites are identified before bidding, allowing contractors to price the work accurately and avoid unexpected liability going forward.
C. PFAS Liability Is a Direct Threat to Infrastructure Affordability
While contractors are accustomed to handling hazardous materials such as asbestos or lead, those substances come with established standards: clear exposure thresholds, procedures for removal, and designated disposal facilities. None of this exists for PFAS. The absence of EPA standards leaves contractors with no clear path to compliance. As explained above, when PFAS is discovered during excavation, soil movement, or dewatering, contractors face significant risk of unknowingly disturbing contamination and triggering liability.
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11 "Many carriers seek to exclude PFAS exposures ... we are seeing this on both Pollution placements as well as General Liability and Excess placements." https://www.rpsins.com/learn/2025/mar/pfas-forever-chemicals-and-constructionpollution-liability-risks/. "PFAS exclusions continue to be added by more markets, while some exclude PFAS for only certain classes of business." https://rtspecialty.com/wp-content/uploads/2025/02/2025-Market-Update.pdf. "New ISO PFAS exclusion available; many carriers adopting ... environmental policies can be scheduled or sub-limited for PFAS ..." https://inszoneinsurance.com/blog/pfas-exclusions-in-insurance. "A drawback to modern-day CGL policies is that they almost always contain some form of pollution exclusion ... [and] standard forms may not respond to PFAS ..." https://www.pillsburylaw.com/a/web/168966/Insurance-Coverage-for-PFAS-Liability-Lexis-Practical-Guidance-d.pdf.
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This uncertainty is already affecting the marketplace. Some contractors are walking away from highrisk projects, narrowing the bidding pool for public infrastructure work. The risk also leaves few "liability-proof" options for disposal, other than limited hazardous waste facilities. At the same time, PFAS concerns are disrupting recycling markets and beneficial-reuse practices that traditionally reduce project costs.
AGC members report a range of cost and delay impacts, including:
* Delays in negotiating contracts due to liability concerns;
* Long-term liability risk from work on high-risk sites;
* Increased consulting costs;
* Increased sampling fees and wait times;
* Higher landfill and transportation fees;
* Additional compliance and training costs under hazardous materials rules;
* Increased risk for acquiring laydown yards and other temporary property; and
* Loss of beneficial-use markets for soil, aggregate, and reclaimed asphalt pavement (RAP).The High Cost of Disposal One AGC member example shows a potential 5,000% increase in soil management costs when PFAS-suspect materials had to be shipped to specialized hazardous-waste landfills rather than local facilities. Moreover, hazardous waste capacity is insufficient to handle the volumes of soil associated with infrastructure work. Several AGC members report being forced to ship soil hundreds of miles, sometimes across state lines, increasing transportation costs, project delays, fuel consumption, and emissions. (See Appendix for more examples.)The Cost of Materials - Implications for Recycling and Reuse Higher disposal costs are compounded by the loss of recycling and reuse options that help keep infrastructure affordable. Contractors routinely reuse soil, aggregate, and asphalt to manage costs, particularly in low-bid environments. When PFAS uncertainty prevents material from being recycled, contractors must purchase more expensive virgin materials--costs ultimately borne by project owners and taxpayers.
AGC members report that EPA's CERCLA designation already affects the viability of reclaimed asphalt pavement (RAP). RAP sourced from airports, military bases, and certain highways may contain PFAS, eliminating a revenue stream for contractors and raising material costs.
Contractors also face liability when importing soil to a project. Without PFAS soil standards, contractors cannot know whether imported fill is clean or whether today's conditions will meet future regulatory thresholds. Soil sourced from agricultural land where biosolids were applied presents another new liability risk. With increasing concerns over PFAS contamination at very low thresholds, the cost of earthwork goes up. If contractors cannot use the soil onsite or offsite locally due to the potential for spreading contamination, and the landfills will not take the soil, then a licensed facility is the only option. However, there is not enough hazardous landfill space to accommodate large amounts of soil.
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Public Owners Need to Plan for PFAS Costs
The implications for infrastructure projects become clear when you consider that public owners are not prepared to manage PFAS on their projects. A 2024 Iowa State University study on PFAS policies across state Departments of Transportation (DOT) found that only 39% of state DOTs have policies for identifying PFAS; only three states have established procedures for handling PFAS on construction projects; only seven states require special management or disposal protocols; and only four states currently test for PFAS on construction and maintenance projects. The study notes that this lack of standardized testing and disposal guidance increases the likelihood of unexpected PFAS discovery, delays, cost overruns, and liability exposure for contractors./12
D. PFAS Enforcement Discretion, Settlements and Cost Recovery
EPA's current enforcement discretion policy focuses on chemical manufacturers and large industrial users. But like any policy, that discretion is temporary and does not shield contractors from thirdparty cost recovery suits. At the same time, major PFAS manufacturers are entering into large settlement agreements with EPA and states that could take away downstream cost-recovery rights, shifting future liability to contractors.
More specifically, the problem is that EPA's settlement approach may remove the primary sources of PFAS contamination from the legal chain of cost allocation, exposing downstream parties, such as contractors, to retroactive, joint, and several liability./13
Broad settlement language can bar contribution claims industry-wide, even for sites beyond those captured by the settlement. PFAS regulation is about pathways, and EPA's approach would foreclose future enforcement against what EPA concedes is the primary path to exposure.
As a result, contractors could face disproportionate cleanup costs for PFAS contamination tied to legacy products and historic uses, with no clear mechanism to recover those costs. This outcome undermines CERCLA's "polluter pays" principle and discourages investment in infrastructure development, including redevelopment and public-works projects.
One approach Congress could take to protect innocent contractors is to expand the use of de micromis and de minimis settlements./14
Unfortunately, this exemption is available only for work done on National Priority List sites prior to April 2001 and is subject to Presidential approval that cannot be challenged in court./15
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12 J. Charbonnet and R. Sturgill, Jr., Iowa State University, Practices to Identify and Mitigate PFAS Impacts on Highway Construction Projects and Maintenance Operations, National Cooperative Highway Research Program, 2024. Available online at the National Academies Press: https://nap.nationalacademies.org/read/27843/chapter/5.
13 42 U.S.C. Sec. 9613 makes clear that "A person who has resolved its liability to the United States or a state in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement. Such settlement does not discharge any of the other potentially liable persons unless its terms so provide."
14 CERCLA provides an exemption for non-owners/operators whose actions caused a relatively small amount of exposure and did not contribute towards response costs in a meaningful way. See 42 U.S.C. Sec. 107(o).
15 Id.
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If Congress and EPA are serious about protecting passive receivers and innocent contractors, you should consider expanding this exemption to work done at any site, during any year, and allowing judicial review of any Presidential veto.
The other lever EPA might pull to protect contractors is the expansion of de minimis settlements under CERCLA 122(g). Under this provision, EPA can settle with parties who don't qualify for the de micromis exemption but, for case specific reasons, still warrant a settlement./16
For example, situations where a party's contribution is still a minute percentage of the total waste volume sent to the site, despite exceeding the thresholds in 107(o).
This provision could be used to protect contractors, but certainly there is no guarantee of protection. And like the de micromis exemption, this provision is subject to ambiguous Presidential determinations that can often cut either way. To allow contractors to rely on de minimis settlements, Congress should establish, or direct EPA to establish, an objective standard for determining whether a contribution is "minimal in comparison to other hazardous substances at the facility."/17
Congress can take actions to ensure PFAS enforcement does not negatively impact critical infrastructure construction, such as:
* Requiring EPA to narrowly define "matters addressed" in PFAS settlements so they resolve only specific site liabilities and do not eliminate the ability of downstream parties to recover PFAS cleanup costs from manufacturers or other responsible parties.
* Clarifying that non-manufacturing PRPs retain cost-recovery rights under CERCLA Sec.107(a) when they incur PFAS cleanup costs unrelated to manufacturing or intentional use.
* Expanding use of the de micromis exemption and de minimis settlements.
E. Conclusion
PFAS presents a real environmental challenge--but without clear statutory and regulatory guardrails, the current CERCLA framework exposes contractors to unlimited, retroactive liability, which is increasingly becoming uninsurable, for contamination they did not create and cannot reasonably detect. This is already driving up bid prices, reducing competition, slowing federal projects, and ultimately increasing costs for taxpayers.
AGC respectfully urges Congress to act. Addressing PFAS must not unintentionally undermine the very infrastructure programs Congress has invested in so heavily. Contractors want to be part of the solution, but they cannot take on open-ended liability for historic PFAS pollution.
We look forward to working with the Committee to modernize CERCLA, establish clear standards for PFAS disposal and reuse, protect innocent contractors and passive receivers, and ensure that PFAS enforcement does not jeopardize the delivery of critical infrastructure.
Thank you for the opportunity to testify. I welcome your questions.
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16 42 U.S.C. Sec. 9622(g).
17 In the past, the Department of Justice used .002% of total volume as a threshold for enforcement. Congress should direct EPA to conduct a rulemaking to develop a legally sufficient standard. That figure was found at the bottom of page three of DOJ's November 2002 CERCLA policy memo.
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APPENDIX
AGC Member Examples - Increased Contract Risk
An example shared by an AGC member relates to another chemical yet demonstrates the problem of risk shifting. On a public project, the owner told the contractor that the soil was not contaminated and was safe for disposal. The contractor tested, and the levels of the chemical in question required remediation. The contractor pursued a change order because of the change in conditions. However, the public owner resisted taking on the additional costs, leading to a delay in the project of over 500 days. As the PFAS issue develops, some states may require testing on sites where there was a known use or manufacturing of PFAS containing materials. These types of requirements will vary by state, and members have shared an overall resistance on the part of project owners to test.
One member mentioned experience with sending waste to qualified landfills that later went out of business - three different times with three different landfills. They had done due diligence to check or verify the landfills' qualifications in advance. Each of the landfills wound up requiring remediation. The member was brought into negotiations as a de minimus contributor on each - paying into the settlement agreements. In each case, insurance did not provide coverage. There is a concern that PFAS will exacerbate existing risks associated with landfill cleanups.
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AGC Member Examples - Increased Disposal and Transport Costs
Contractors are already seeing specific instances where the potential for PFAS has increased costs and transport times. For example:
* In California, an AGC member was turned away from a landfill that previously accepted Department of Defense (DoD) waste, as the landfill now refuses to accept waste from DoD facilities due to the risk of PFAS. This forced the AGC member to pay significantly more to haul the waste to other facilities, with some being located out of state. This member anticipates that, as a direct result of this rule, disposal options for the soil and effluent waste from the above-referenced projects will be limited to hazardous landfill.
* On another project in California, a member company that is dealing with the export of 10,000 to 20,000 yards of soil waste believes that under this same scenario, their disposal costs increased from $40 per yard to $200-$300 per yard.
* In New England, an AGC member was turned away from disposing of materials in landfills multiple times due to trace amounts of PFOA and PFOS. Depending on the project location, disposal options will be very limited, meaning soil may need to be hauled 100 miles or more.
* A study in New England found that trace amounts of PFOA and POFS exist in areas well removed from any development, making removal and disposal more difficult due to the wide range of potentially impacted sites. A member company has shared that disposal costs per ton in Massachusetts were between $15 and $60, not including shipping, for landfilling or a soil reclamation facility. For a hazardous waste landfill, tipping costs increase to $300-$400, not including shipping.
* In Texas, a member company shared their estimate from a jobsite to the nearest disposal option as compared to the nearest hazardous waste landfill. The round-trip miles for the local disposal site were 20 miles, multiplied by 750 loads of soil. For a hazardous landfill, the round-trip was 800 miles. Even if just a small fraction of the 750 loads of soil needed to be transported to the hazardous landfill, the cost of transport, including fuel, would quickly add up. This example does not consider the increased disposal fees and tipping fees when switching to a hazardous waste landfill, which, as we see from the examples above, can be steep.
Other AGC members have reported experiences with demolishing, restoring, and constructing airport hangars equipped with Aqueous Film Forming Foam (AFFF) fire suppression systems, which are known to have PFAS. Many existing hangars, built in the past 70 years, have "charged" systems that require testing (the AFFF is discharged through devices such as sprinklers, nozzles, hoses, and chambers), cleaning, dismantling, and disposal. When demolishing or renovating an existing hangar, the contractor must address the existing AFFF system (drain the system before work and test/charge the new fire suppression system components) as well as the surrounding areas.
In general, the construction process requires demolishing asphalt/concrete pavement, digging soil out two to ten feet below the surface, and disposing of the asphalt/concrete and soil waste in a landfill.
Numerous AGC members also report that the PFAS rule has led to increased consulting, transportation, and disposal costs for contractors handling PFOA- and PFOS-containing hazardous substances. A member shared an example of how the presence of these chemicals in pooled stormwater on a normal project turned an otherwise simple cleanup of a minor spill of hydraulic fluids into a lengthy remediation process, adding at least $88,300 in disposal and consultant fees to the price tag.
In another instance, landfill costs for an AGC member increased tenfold, causing months-long project delays and adding to operational expenses.
* * *
AGC Member Examples - Bidding Impacts and Walking Away from Projects
Due to the increased liability related to PFAS, AGC members have experienced delays and/or declines in business and/or an increase in operating expenses. To comply with the rule and avoid liability, AGC members now face delays in contract negotiations for airport and federal DoD work to assess potential contamination risks, sometimes resulting in a decision not to bid on projects due to liability concerns. In the Northeastern United States, a wetland remediation project downstream from a firefighting academy is removing contaminated soil at a cost to taxpayers.
This is not limited to projects with a history of AFFF use onsite. Other AGC members are seeing similar situations arise throughout the country. For example:
* In the Western United States, one AGC member company was interested in pursuing a 99-year lease project to develop and construct on county-owned property. When the member company undertook due diligence on the subject property, they discovered a record of PFAS contamination at relatively high levels and believed that the site could have had groundwater discharge into a nearby body of water. The project owner indicated that the developer and contractor would be responsible for the handling and disposing of PFAS impacted materials, and after asking about ongoing obligations associated with this PFAS impact, the owner did not have enough information to respond, causing the member company to believe they would be held responsible for the cleanup of PFAS both on the property and potentially off property if the release had spread. The member company ended its pursuit of this project. No other construction companies or contractors responded to the owner's RFP. And despite the owner issuing a new one in the intervening months, intended to clarify uncertainty around RFP, no companies have responded to the updated guidance.
* In the Southwestern United States, a separate AGC member declined to bid on a project to conduct maintenance work downstream of an airport due to a documented spill of PFAS materials six months prior. While the contractor asked about the spill and PFAS testing during the project bid process, the project owner indicated that the spill did not contain known PFAS, and they did not conduct any testing, putting the soil disposal risk directly onto the contractor.
In addition to the above examples, contractors and AGC members are also voicing concerns about conducting PFAS-related cleanup projects within waterworks systems. AGC members often replace contaminated pipes and will install water filtration systems to remove PFAS from water systems.
Liability concerns are starting to be voiced among contractors doing this type of work, leading to some questions about whether some contractors will continue to bid on this type of work.
* * *
The Associated General Contractors of America (AGC) is the leading association in the construction industry, representing more than 28,000 firms, including America's leading general contractors and specialty-contracting firms. Many of the nation's service providers and suppliers are associated with AGC through a nationwide network of chapters. AGC contractors are engaged in the construction of the nation's commercial buildings, shopping centers, factories, warehouses, highways, bridges, tunnels, airports, waterworks facilities, waste treatment facilities, levees, locks, dams, water conservation projects, defense facilities, multi-family housing projects, and more.
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Original text here: https://www.epw.senate.gov/public/_cache/files/b/2/b2821d31-175f-4c08-81cd-faadd9cf5d2e/0D4DED018780A80BDB8CE656099EA3088C399CEE9C2D3D1611D31CF59178FCC5.11-19-2025-pilconis-testimony.pdf
American Action Forum President Holtz-Eakin Testifies Before Senate Finance Committee
WASHINGTON, Dec. 2 -- The Senate Finance Committee released the following testimony by American Action Forum President Douglas Holtz-Eakin from a Nov. 19, 2025, hearing entitled "The Rising Cost of Health Care: Considering Meaningful Solutions for All Americans":* * *
Chairman Crapo, Ranking Member Wyden and members of the committee, thank you for the privilege of appearing today. In what follows, I wish to make to make three main points:
* The Affordable Care Act was, and remains, a flawed policy that affects health insurance, the labor market, and economic growth;
* In the immediate term, ... Show Full Article WASHINGTON, Dec. 2 -- The Senate Finance Committee released the following testimony by American Action Forum President Douglas Holtz-Eakin from a Nov. 19, 2025, hearing entitled "The Rising Cost of Health Care: Considering Meaningful Solutions for All Americans": * * * Chairman Crapo, Ranking Member Wyden and members of the committee, thank you for the privilege of appearing today. In what follows, I wish to make to make three main points: * The Affordable Care Act was, and remains, a flawed policy that affects health insurance, the labor market, and economic growth; * In the immediate term,there are limited options to rework the premium tax credits, although these improvements would be a welcome change; and
* Over the longer term, broad reforms will be needed to achieve the goals of highervalue care and affordable insurance.
Let me discuss each in turn.
* * *
Problems With the Affordable Care Act
The Patient Protection and Affordable Care Act (Affordable Care Act or ACA) has been a problematic policy program since its inception. Even at the time it was debated, the primary policy challenge facing the United States was the unsustainable growth of federal debt - the source of which was, and remains, spending commitments that rise above any reasonable metric of taxation for the indefinite future.
The fiscal future outlined at the time of the ACA's enactment was a direct impediment to job creation and growth. The best way to eliminate deficits is to keep taxes low and reduce public-employee costs and transfer payments. But the ACA moved in precisely the wrong direction. It contained trillions of dollars of new transfer spending, combined with hundreds of billions of dollars in new taxes. It was the wrong economic policy at a pivotal moment.
* * *
Employer Mandate and Tax Impacts on Jobs and Growth
A goal of U.S. economic policy should be to maximize the pace of economic growth. More rapid growth is essential to the labor market futures of the millions of Americans without work. It will generate the resources needed to meet our obligation to provide a standard of living for the next generation that exceeds the one this generation inherited.
Yet key provisions of the ACA - mandate costs, administrative burdens, and new taxes - remain inconsistent with strong, pro-growth policies. Among the key aspects of the ACA is its mandate to cover employees with health insurance. Larger employers, those with more than 50 workers, are faced with employer shared responsibility provisions - so-called "pay or play" - which, beginning in 2014, required them to pay a penalty if any of their full-time workers receive subsidies for coverage through the ACA exchange. The penalty for 2025 is equal to the lesser of $4,350 for each full-time worker receiving a premium credit, or $2,900 for each full-time worker, excluding the first 30 full-time workers. The fees are calculated on a monthly basis. Firms with fewer than 50 employees are exempt from the "play or pay" penalties if they do not offer coverage and their workers receive a subsidy to purchase insurance on the exchange.
As employers sought to avoid penalties, the plans they offered became more generous and more expensive. From the perspective of economic performance, the best-case scenario was that the firm was already offering adequate insurance coverage, with no employee receiving subsidies and triggering penalties, and thus costs were unaffected. In every other instance, renegotiating health insurance coverage created competition with hiring and growth for the scarce resources of those firms.
* * *
Tax Increases
The ACA, as passed, was projected to raise more than $700 billion in tax revenue from an excise tax on high-premium plans; reinsurance and risk adjustment collections; penalty payments by employers and uninsured individuals; fees on medical device manufacturers, pharmaceutical companies, and health insurance providers; and other revenue provisions.
Many of these taxes have not survived to the present, however - evidence of their poor design and interference with the economy.
There are two Medicare taxes in the ACA. Section 9015 increased the Medicare hospital insurance (HI) tax by 0.9-percentage points on wages in excess of $200,000 ($250,000 for couples filing jointly, $125,000 for married individuals filing separately). The tax also applies to self-employed earnings.
Sec. 1402 of the Health Care and Education Reconciliation Act of 2010 (HCERA) - the follow-on law that made technical corrections to the ACA (among other things) - imposed a 3.8-percent Medicare contribution tax on individuals, estates, or trusts of the lesser of net investment income or the excess of modified adjusted gross income over the threshold amount. The threshold amount is $250,000 for joint returns, $125,000 for married filing separately, or $200,000 for any other case.
The first point to note is that these taxes have nothing to do with Medicare finance. While gross inflows may be credited to the HI trust fund, these dollars financed the expansion of the new insurance subsidy entitlement program - the premium tax credits. The second is that these taxes fell predominately on business income and distorted the decisions of these pass-thru entities.
A final tax impact of the ACA is that the impact of the professed refundable credits may have even more perverse growth consequences. As noted in Brill and Holtz-Eakin, the phase-outs in insurance subsidies contribute to high effective marginal tax rates. The effect is to raise to as high as 41 percent the effective marginal tax rate on some lower-income U.S. workers. As evidenced by the discussion that we are having today, there was little to no intention of letting these end. Of the 24.3 million Americans that selected an ACA plan in 2025, 22.4 million qualify for premium tax credits. Thus, the impending effective tax rate has made it necessary to reform them to avoid a tax increase on those purchasing ACA plans.
* * *
ACA and Health Insurance Premiums
Health care reform was presumed to encompass both expansion of affordable insurance options and provision of quality medical care at lower costs. The reality of the ACA could not be more different. The law has raised - and continues to raise- national health care spending. The rising bill for national health care spending has, in turn produced sustained upward pressures on health insurance premiums.
These features of the law are increasingly well understood, much to the dismay of insurance consumers. In short, all insurers - for profit and non-profit alike - will seek to restructure as necessary in an attempt to ensure profitability, with the main opportunity lying in the area of labor compensation costs. To the extent possible, firms will either reduce compensation growth, squeeze labor expansion plans (or even lay off workers), or both. There are, however, sharp limits on the ability of companies to shift the effective burden of excise taxes onto either shareholders (capital) or employees (labor). Moreover, their ability to do so diminishes over time as capital and labor seek out better market opportunities.
The only other place to shift the tax cost is to customers - i.e., families and small businesses.
First, if an aggregate fee on the industry were recognized as any sort of tax that carried incentives to shift some of the burden via lower dividends, capital gains, and wages, then the aggregate fee will overstate the net budget receipts and underestimate net budget costs.
The second implication is that the remainder of such a tax is passed on to consumers. If market conditions make it impossible for insurers to absorb the economic burden of any tax (explicit or implicit), they will have no choice but to build the new, higher costs into the pricing structure of policies. In this way, the economic burden of the tax is shifted to the purchasers of health insurance. In particular, the more competitive markets are for equity capital and hired labor, the greater the fraction of the burden that will be borne by consumers.
The implications for purchasers of health insurance are obvious and unambiguously negative. In addition, as employers pay more for health insurance, they will have to shave back cash wage increases and taxable compensation. The health insurance fee will likely quickly and almost completely be incorporated, resulting in higher insurance premiums.
* * *
ACA and Employer-sponsored Insurance
The basic design of the ACA is an impediment to employer coverage. At the time of passage, about 163 million workers and their families received health insurance coverage from their employers. As of 2023, that number was estimated to be 178 million covered lives.
Proponents of the ACA insisted that one of its key tenets was to build on the system of employer-sponsored insurance (ESI) coverage. The ACA failed to achieve this purported aim; instead, it continued to provide market-distorting support to marketplace plans.
In the ACA's first 10 years, roughly one-half its $900 billion in spending was devoted to subsidies for individuals who did not receive health insurance from their employers. These subsidies were remarkably generous, even for those with relatively high incomes. For example, in 2014 a family earning about $59,000 a year would receive a premium subsidy of about $7,200; a family making $71,000 would receive about $5,200; and even a family earning about $95,000 would receive a subsidy of almost $3,000.
By 2018, subsidy amounts and the income levels to qualify for those subsidies grew substantially: a family earning about $64,000 would receive a subsidy of over $10,000; a family earning $77,000 would receive a subsidy of $7,800; and a family earning $102,000 would receive a subsidy of almost $5,000.
The total federal spending on these subsidies has risen drastically. In 2014, the gross cost of these subsidies was $18 billion. In 2025, these costs are estimated to reach $138 billion. If these subsidies continue to be provided at the same rate, modeling estimates that next year's subsidies could total over $150 billion.
An obvious question is how employers have reacted to the continued presence of an alternative, highly subsidized source of insurance for their workers. Although the number covered through ESI has trended upwards since 2014, the ongoing reorientation of the labor market (through trade disruptions, artificial intelligence, etc.) may result in employers determining that they are better off reducing costs by dropping coverage for their employees. The simplest calculation focuses on the tradeoff between employer savings and the $2,900 penalty (per employee) imposed by the ACA on employers whose employees move to subsidized exchange coverage. Consider a policy with the average premium ($9,325) in 2025. The average covered worker contributes 16 percent of the premium and the employer bears the other 84 percent or $7,833. A simple comparison of $7,833 in savings versus a $2,900 penalty would seemingly suggest large-scale incentives to drop insurance.
The economics of the compensation decision are more nuanced than this simple calculation, however. Health insurance is only one portion of the overall compensation package that employees receive as a result of competitive pressures. Evidence suggests that if one portion of that package is reduced or eliminated - health insurance - another aspect - wages - will ultimately be increased as a competitive necessity to retain and attract valuable labor. Thus, the key question is whether the employer can keep the employee "happy" - appropriately compensated and insured - and save money.
As Table 1 outlines, the answer at the time was frequently "yes" - thanks to the generosity of federal subsidies. To see the logic, consider the first row of the table, which shows the implications for a worker at 133 percent of the federal poverty level (FPL) or $31,521 in 2014. I projected that this worker will be in the 15 percent federal tax bracket, which means that $100 of wages (which yields $85) is needed to offset the loss of $85 of employer-provided health insurance (which is untaxed). Consider now a health insurance policy worth $15,921, of which the employer picks up 75 percent of the cost. The employer's contribution to health insurance of $11,941 is the equivalent of a wage increase of $14,048 to the worker.
Did the economics of ACA ever suggest that employers could drop their insurance offer?
Yes. The employee would receive $14, 176 in subsidies - more than the value of the lost health insurance. On paper, they could take a pay cut and be better off. Clearly, the employer comes out way ahead - $11,941 less the penalty. Obviously, there is room for the employer to improve the worker's life by having a small pay raise and the same insurance and still save money. This is a powerful, mutual incentive to eliminate employer-sponsored insurance.
The remaining rows of Table 1 repeat this calculation for workers at ascending levels of affluence. For example, at 200 percent of the FPL, the "surplus" between the pay raise required to hold a worker harmless ($4,936) and the firm's cash-flow benefit from dropping coverage ($9,941) has narrowed, but the bottom-line decision in the final column is the same. Indeed, the incentives are quite powerful, up to 250 percent of FPL, or $59,250.
Only for higher-income workers do the advantages of untaxed health insurance make it infeasible to drop insurance and re-work the compensation package.
At the time of passage, there was legitimate concern over the loss of ESI. There were 123 million Americans under 250 percent of the FPL. Roughly 60 percent of Americans worked and about 60 percent of those received employer-sponsored insurance. That math suggested that there were about 43 million workers for whom it made sense to drop insurance.
As fate would have it, the failure of healthcare.gov and the botched rollout of the ACA put a stigma on switching to the ACA and reduced the projected immediate dropping of insurance. The incentives reflected in the table have remained embedded in the ACA, and since its inception have been a headwind to the growth of ESI.
This is a real issue, as ESI not only provides health insurance, it also promotes work. As a general matter, policies should support work and the ACA is in contradiction to this objective.
* * *
Table 1: Health Care Reform and Employer-sponsored Insurance in 2014 (Employer Health Plan = $11,941)
* * *
Potential Reforms to the ACA Premium Tax Credits
In the near term, options are quite limited. Given that policy design, premium decisions, and policy selection are already underway, there is little that Congress can do for plan year 2026. The first possibility is simply to send funds to each ACA beneficiary to offset an appropriate part of the cost of premiums and cost-sharing. This has a number of drawbacks, with the obvious being that there is no way to ensure taxpayer funds are used for health purposes. Much like the stimulus checks sent throughout the pandemic, the sharp increase in money supply could result in a surge of inflation through consumers' increased spending power.
A second possibility is to provide the additional subsidy in the form of cost-sharing reductions (CSRs) in the ACA. This has precedent, but has the drawback that it cannot be provided to those ACA purchasers that elected zero-dollar premium Silver plans, since there is no cost to share.
A third possibility is to deliver the subsidy as a contribution to the Health Savings Accounts (HSAs) of those beneficiaries that have HSA-eligible policies. Since not all policies are eligible for HSAs, this is very narrowly targeted and would not help the majority of ACA policyholders.
Of course, the possibilities are not mutually exclusive and could be combined to achieve the desired level and mix of subsidies.
In plan year 2027 and beyond, reforms can both target subsidies and affect the purchase decisions of beneficiaries and pricing by insurers. Broadly, the subsidies may be channeled through CSRs, HSAs, Flexible Spending Accounts (FSAs), and enhanced medical deductions to achieve financial relief and policy objectives. (See Addendum 1 for a brief summary of health-related, tax-preferred accounts.)
* * *
Comprehensive Reforms in the Long term
Over the longer term, it is imperative that federal health policy supports higher-value care - better outcomes at reasonable cost - and affordable insurance.
* * *
Principles for Comprehensive Health Care Reforms.
In my experience, health policy is too often divorced from the principles that broadly guide economic policy making. This is a mistake.
Principle 1: The delivery of health care is an economic activity; health care policy should be good economic policy. It should be built on a small, contained government; light touch regulation; low and efficient taxation; and stable, predictable policies.
Principle 2: High prices are a supply problem and cannot be solved by more government subsidies to demand. As it relates to the topic of this hearing, the enhanced ACA subsidies are a classic case of making a high-price problem worse by subsidizing demand.
Principle 3: Reforms should focus on outputs - quality outcomes and high-value - and permit the health sector to flexibly pursue these goals. The basic ingredients will be capitated payments (a preset payment per patient) and a rigorous quality metric. Failure to hit the metric should mean loss of the payment.
Fixing Federal Insurance Subsidies. (This section draws on my contribution to the Grand Bargain project.) Taxpayers subsidize nearly every health insurance policy in the United States. For example, Medicare, Medicaid, and the ACA receive direct subsidies and ESI is exempt from taxation. (See the Congressional Budget Office.) Excessive subsidies incentivize the overuse of health care. The level and distribution of subsidies across types of insurance and households is an arbitrary accident of history, leading to unfairness and inefficiency. A goal for reform would be to rationalize subsidies to make the insurance system more efficient and less unfair.
Employer-sponsored insurance is subsidized by non-taxation of this form of employee compensation. The subsidy is open-ended and regressive, getting larger with the employee's income tax rate. ACA individual-market policies - the subject of this hearing - are subsidized in a progressive fashion. These subsidies compete with ESI subsidies for many of the same individuals in an inefficient and unfair manner. Medicaid is a sharply progressive subsidy but varies across states and is available only to those of very limited means.
The existence of this array of subsidies supports the notion that Americans have decided that health insurance should be subsidized. To the extent possible, the existing system of subsidies should be reformed to deliver the same federal subsidy to a family of a certain size and income, regardless of the source of their insurance. For example, the ESI subsidy could be changed from an exclusion to a tax credit, and the credit amounts set to reflect the same schedule as in the ACA individual markets. Similarly, one could choose a level (e.g., 133 percent of the federal poverty level) below which insurance is entirely subsidized - whether it be Medicaid or any other source.
A side benefit of this process is that it would generate a debate that would force a consensus decision on the "right" level of subsidy from an overall budget perspective and health policy objective. For example, at present the standard, non-enhanced ACA subsidies phase out at 400 percent of the federal poverty level. Matching this policy in the employer setting immediately raises the question of how large the subsidy should be and how broad the population of recipients is.
Providing Incentives for High-Value Care. The most pressing policy problem facing the federal government is the unsustainable fiscal trajectory. Medicare is a central feature of this outlook, and delivers low-value care in the process. A goal of reform is to place an overall budget constraint on Medicare, improve incentives to control costs, and provide a subsidy to Medicare coverage consistent with the discussion above. When combined with appropriate quality metrics, the outcome will be higher-value Medicare practices. Since Medicare practice patterns contribute significantly to the patterns of care delivery in the United States, this will contribute to a more efficient delivery system overall.
The starting point is to put Medicare on a budget. The current system was never designed to be financially self-sufficient, with Parts B, C, and D having an open-ended draw on the Treasury. This is bad budgeting (or non-budgeting); it also creates bad health policy incentives. Only when there are finite resources will stakeholders have a common interest in providing a quality outcome with the resources available. The central concept is a riskadjusted, capitated subsidy for care. Under this strategy, each senior will receive a fixed subsidy, which will be larger for those who have greater health and/or financial needs.
Medicare Advantage (MA) is the best vehicle for the transition, as more than 50 percent of beneficiaries are now in MA and the evidence is that future retirees will prefer it as well. It is geographically diverse, with care tailored to meet the local population's health characteristics. There is significant health plan competition in most areas, so plans that do not provide high quality care can be permitted to - and should - fail.
There will have to be extensive improvement in measuring the quality of MA plans. Plans should be rated on the quality of beneficiary outcomes and not what services are provided or the location of delivery. This can be a flexible vehicle for delivering increasing elder care as well as acute health care.
At the same time, fee-for-service traditional Medicare should be relegated to history. It is widely recognized as having incentivized excessive medical consumption, contains no attempt to verify the quality of care, and suffers from a lack of coordinated care delivery.
I look forward to your questions.
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Addendum 1
GLOSSARY OF SELECT TAX-ADVANTAGED HEALTH ACCOUNT TERMS
Cost-Sharing Reductions (CSRs)
Cost-sharing reductions are extra subsidies that lower out-of-pocket costs (like deductibles, copayments, and coinsurance) for certain people who buy health insurance through the Affordable Care Act (ACA) marketplaces.
* Only available on Silver-level marketplace plans.
* Eligibility is based on income, generally for lower- to moderate-income enrollees.
* Instead of lowering monthly premiums, CSRs make it cheaper to use care--such as doctor visits, prescriptions, and hospital services.
* * *
Health Savings Accounts (HSAs)
A Health Savings Account (HSA) is a tax-advantaged savings account used to pay for qualified medical expenses.
* A person must be enrolled in a High-Deductible Health Plan (HDHP) to contribute.
* Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free (a "triple tax advantage").
* Funds roll over from year to year - unused money is not lost at the end of the year.
* After a certain age, HSA funds can be used more flexibly, similar to retirement funds, subject to specific tax rules.
* * *
Flexible Spending Accounts (FSAs)
A Flexible Spending Account (FSA) is an employer-based account that lets a person set aside pre-tax money to pay for eligible out-of-pocket health care expenses.
* Contributions reduce a person's taxable income.
* Commonly used for copayments, deductibles, prescriptions, and other eligible health expenses.
* Most FSAs are "use it or lose it" within the plan year, though some plans allow a small carryover or a brief grace period.
* FSAs are generally tied to a specific employer and usually cannot be taken with an individual if they leave the job.
* Unlike HSAs, an individual typically does not need a high-deductible health plan to participate.
* * *
Enhanced Medical Deductions
"Enhanced medical deductions" is a general term that describes policy changes making it easier or more generous for taxpayers to deduct medical expenses on their income taxes.
* May involve lowering the threshold at which medical expenses become deductible (for example, allowing deductions above a smaller percentage of adjusted gross income).
* Can expand the list of expenses that qualify as deductible medical costs.
* Often refers to temporary or targeted expansions, such as for older adults, people with disabilities, or during a public health emergency.
* Overall, these policies increase the likelihood that taxpayers can reduce their tax burden based on health care spending.
* * *
Health Reimbursement Accounts (HRAs)
A Health Reimbursement Account or Arrangement (HRA) is an employer-funded benefit that reimburses employees for certain medical expenses on a tax-free basis.
* Only the employer contributes; employees do not fund the account themselves.
* Employers may define which expenses are eligible for reimbursement within IRS rules (for example, deductibles, copayments, or premiums in some designs).
* Reimbursements are generally tax-free to the employee.
* Whether unused funds roll over from year to year depends on the employer's specific plan design.
* HRAs are often paired with a group health plan but can also be structured to reimburse individual coverage under specific federal rules.
* * *
Medicare Medical Savings Accounts (MSAs)
A Medicare Medical Savings Account (MSA) is a type of Medicare Advantage plan that combines a high-deductible health plan with a medical savings account funded by Medicare.
* The plan includes a high deductible that must be met before most covered services are paid by the plan.
* Each year, Medicare deposits a set amount of money into a special MSA account in the beneficiary's name.
* Funds can be used tax-free for qualified medical expenses, including those incurred before meeting the deductible.
* Beneficiaries generally cannot contribute their own money to a Medicare MSA; only Medicare makes deposits.
* These plans are relatively niche and have limited availability; a person must enroll in a Medicare MSA plan to have an associated account.
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Original text here: https://www.finance.senate.gov/imo/media/doc/11192025_holtz_eakin_testimony.pdf
Atlantic Council's Indo-Pacific Security Initiative Non-Resident Senior Fellow Currie Testifies Before House Foreign Affairs Subcommittees
WASHINGTON, Nov. 30 -- The House Foreign Affairs Subcommittee on East Asia and Pacific released the following testimony by Kelley E. Currie, a non-resident senior fellow of the Atlantic Council's Indo-Pacific Security Initiative, from a Nov. 19, 2025 joint hearing with the Subcommittee on South and Central Asia entitled "No Exit Strategy: Burma's Endless Crisis and America's Limited Options":* * *
Thank you Chairwoman Kim, Chairman Huizenga, Ranking Members Bera and Kamlager-Dove, and other members of the Committee, for convening this hearing at a time when the world largely ignores Burma's ... Show Full Article WASHINGTON, Nov. 30 -- The House Foreign Affairs Subcommittee on East Asia and Pacific released the following testimony by Kelley E. Currie, a non-resident senior fellow of the Atlantic Council's Indo-Pacific Security Initiative, from a Nov. 19, 2025 joint hearing with the Subcommittee on South and Central Asia entitled "No Exit Strategy: Burma's Endless Crisis and America's Limited Options": * * * Thank you Chairwoman Kim, Chairman Huizenga, Ranking Members Bera and Kamlager-Dove, and other members of the Committee, for convening this hearing at a time when the world largely ignores Burma'sspiraling poly-crisis. As someone who has worked in support of democracy and human rights in Burma for three decades, I deeply appreciate the opportunity to testify today. My remarks solely represent my personal views and not those of any of the institutions with which I am affiliated.
Since Min Aung Hlaing and the Burma army launched their illegal coup in February 2021, the country has descended into state failure, economic collapse, widespread criminality, and unspeakable violence. Burma's neighbors have either profited off this disaster or hidden their heads in the sand, even when their citizens bear the negative consequences of the junta's misrule.
As the regime moves ahead with sham elections in a bid to institutionalize its illegitimate rule, the Association of South East Asian Nations (ASEAN) continues to stand by inertly. Russia and China keep the junta flush with weapons at a cost that includes mortgaging the country's resources and its future. India has attempted to follow China's strategy of playing all sides but lacks the leverage and moral flexibility to do it effectively. Bangladesh and other Muslimmajority countries in the region push the UN and international community to address the ongoing Rohingya crisis with unrealistic solutions, even as they ratchet up pressure on refugees within their borders.
Since the coup, U.S. policy on Burma has also been adrift. The Biden administration largely deferred to ASEAN's failed "Five Point Consensus" while refusing to implement the Burma Act passed by Congress in 2022. The Trump administration has been "reviewing" Burma policy since coming into office. This 'review' seems to have consisted primarily of loose talk about Burma's critical minerals, some half-measures to address the scam center epidemic, and dramatically cutting funding to programs for civil society, media, and vulnerable communities.
Recent pledges to support Rohingya refugees in Bangladesh are welcome but do not replace the failure of leadership overall. That humanitarian assistance is also undercut by termination of support for and engagement with the Independent Investigative Mission on Myanmar (IIMM) and the Special Rapporteur on Human Rights in Myanmar, despite strong support for these efforts during the previous Trump administration.
Despite this international apathy and predation, Burma's "Spring Revolution" has continued its unprecedented fight against the military regime. The revolutionary forces have been scrappy and largely self-sufficient. The flexible tactics of the Civil Disobedience Movement (CDM) keep frustrating the junta's ability to retain effective control of the country, and likely will play a major role in disrupting the planned sham elections. While the People's Defense Forces (PDFs) and ethnic revolutionary forces have lost ground recently as China expands its role as the regime's decisive enabler, these under-resourced forces continue to innovate and build their own capacity. Despite decades of mistrust and broken promises--and continued use of divide and rule tactics by the military regime--the Bamar majority and ethnic nationalities continue fighting together on the frontlines while working to protect civilians and develop grassroots federalism in areas liberated from military rule. They struggle with the downstream consequences of genocide and geopolitics, framed by decades of military-dominated misrule, chauvinism, and autarky.
None of it is easy but they keep working at it. Their DIY revolution keeps going.
As this conflict shows no sign of abating, the Burmese people continue to suffer. Meanwhile, from the scam centers of Myawaddy to the dirty rare earths mines of Chipwe to the drug dens of Tachilek to the refugee camps of Kutapalong--Burma's extractive neighbor keeps finding a way to prosper from its crises. I will leave the last of these issues to my co-panelists and focus on the other three.
1. Scam centers: The scam centers that operate out of Burma are a major node in an estimated $35 billion a year business enterprise. Chinese transnational criminal organizations provide the backbone for this network, working with the junta and allied ethnic border guard forces. In addition to defrauding innocent victims of their life savings, these scam centers are a major source of an extremely abusive form of human trafficking and facilitate global money laundering networks used by Mexican drug cartels and other bad actors. These scam centers rely on energy and telecommunications resources that are vulnerable to cut offs by Thai authorities, and the operators continue to use Thai and Singaporean banking services.
2. Critical minerals: China sources nearly all of the terbium and dysprosium it processes from mines in Kachin state, in upper Burma. The extraction at these sites is carried out in the most environmentally damaging way possible, destroying fragile ecosystems and poisoning waterways that communities depend on for their survival. Since the Kachin Independence Army (KIA) seized control of key mining areas earlier this year, they have attempted to end some of the most destructive practices and bring the largely unregulated Chinese mining under control, with limited success. In return, the Chinese government has increased its pressure on the KIA, cutting them and Kachin state off from fuel, food and other critical supplies, and expanding support to the regime's efforts to retake territory the KIA had controlled together with People's Defense Forces, especially in the Bhamo area.
3. Methamphetamines: As documented in an exhaustively reported story in the Washington Post last week, the drug trade out of Burma has exploded since the coup, fueled by a massive influx of cheap Chinese industrial chemicals. These precursor chemicals are used to produce to make highly addictive methamphetamine compounds that are sold across Asia. The United Wa State Army (UWSA), the largest and most well-armed non-state military in Burma, is the primary manufacturer and trafficker of these illicit drugs. The UWSA grew out of the Chinese-backed wing of the old Burmese Communist Party, and its leaders maintain close ties to the CCP. These ties have facilitated their connections to the web of Chinese chemical manufacturers and exporters--some of whom are state owned enterprises--that are driving the crystal meth epidemic in Asia. Many of these same chemical companies provide precursors to Mexican cartels that produce synthetic opiates such as fentanyl, and the Post reports growing signs of cooperation and learning across these criminal syndicates.
The Chinese leadership has made it clear that they do not wish to see a victory by the democratic forces in Burma. At key moments over the past two years, Beijing has put its thumb on the scale to ensure its interests are served by events inside Burma. Whether providing diplomatic and economic lifelines to the junta, or cutting off resources for key ethnic armed groups, Beijing has set itself up as the decisive enabler of the junta's war on its own people, much as it serves the same purpose in Russia's war on Ukraine. But because of the complicated and obscure nature of what is happening in Burma, and the fecklessness and apathy of other countries, China has paid little cost for its complicity in the junta's ruinous coup and subsequent war on the Burmese people or its enablement of the ecosystem of harmful illicit activities that support that war.
It is not too late for the United States to have a positive impact on the situation in Burma, but it would require a degree of subtlety and willingness to confront vested interests in the region that has not been evident up to now. Because Burma is a "seam" issue that cuts across not only two regional bureaus at the State Department, but also involves a complex matrix of technical, law enforcement, and financial issues, it is ripe for the appointment of a presidential special envoy who is equipped to understand these challenges and empowered to act on them. The BRAVE Act recognizes the need for a higher-level coordination function, and recommends the creation of such a position.
In addition, the US and its allies should:
* Designate terbium, dysprosium, and other minerals mined by the junta and its proxies as conflict minerals and enforce sanctions on exporters and processors until a more transparent and accountable system of developing these resources is in place. This was done with cobalt mining in Congo, and there are models from other regions where resource extraction has exacerbated conflict and/or severely harmed local communities.
Any proceeds from subsequent mining should be placed into a trust fund to remediate the impacts of past destructive mining practices and support communities that have suffered harm.
* Expand cooperation and co-investigation with Thailand and Singapore to more quickly identify and prosecute (1) scam center operators and beneficiaries; (2) groups and individuals involved with human trafficking, the transport of precursor chemicals into Burma, and the drug traffic in the region; and (3) money laundering networks related to these crimes. Restore U.S. funding to projects that track financial networks connected to the junta, its proxy armed groups, and external actors in order to provide actionable financial intelligence to the Treasury Department and allied governments.
* Work with partners to cut off scam centers' access to banking services, Starlink, and other critical operational systems.
* Refuse to recognize any elections organized by the illegal military junta, and block agrement for any new junta-appointed diplomats. Expel and declare persona non grata Burmese military attaches who are acting as junta enforcers within embassies and committing transnational repression, including those operating out of the Burmese embassy in Washington and the permanent mission to the UN in New York.
* Work bilaterally and through UN agencies and international financial institutions (IFIs) to expand parallel mechanisms for humanitarian assistance to conflict affected communities inside Burma, including by working with civil society, existing ethnic nationalities systems, and other cross-border pathways.
* Consider placing frozen Burmese foreign exchange funds into a managed account and using the interest to support humanitarian and governance assistance. Require countries that receive humanitarian assistance for Burmese refugees to permit them to be registered with UNHCR, have minimum legal protections to deter exploitation, and be given opportunities to work, access education and other services.
Burma is again at a crossroads. Its people are fighting hard for a peaceful, prosperous and democratic future, while the regime is fighting to protect its self-declared prerogative to continue its brutal and extractive rule. The United States has remained largely aloof from this fight, while our adversaries in Beijing have become major beneficiaries of the chaos and instability it has generated. There are relatively low-cost ways the United States can engage that will improve our own security, while also backstopping our partners in the region who are suffering the downstream consequences of Burma's lawlessness and state failure. Burma may not be a frontline state for the United States, but we cannot afford to let it become a Chinese cat's paw in a critical region. Beijing has already weaponized Burma's chaos against Thailand, our oldest treaty ally in the region and the pillar of U.S. security infrastructure in southeast Asia. The path out of this current morass will not be found in a race to the bottom with Beijing, but rather in working with partners to bring about a sovereign, stable and democratic Burma that is at peace with itself and contributing positively to its neighborhood. Stability and prosperity are the best bulwarks against a Chinese takeover of Burma, but they will not be achieved under a military dominated regime forced on an unwilling populace. We should help Burma to realize a different future, and with consistent, smart policy we can do this in ways that make sense against the broader backdrop of our national security priorities in the region.
I look forward to your questions and am again grateful for the opportunity to participate in today's hearing.
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Original text here: https://docs.house.gov/meetings/FA/FA05/20251119/118674/HHRG-119-FA05-Wstate-CurrieK-20251119.pdf