ENVIRONMENT : For EPA Officials, Cutbacks Are a Foregone Conclusion : GOP-led Congress seeks major reductions in size, scope and mission of the agency. Extent of realignment seems to be only question left.

TWO HARBORS, Minn. —  Twenty-four hours a day, the waste treatment plant on the shores of Lake Superior clears out the detritus of this little town, drinking up raw sewage and pumping cleaner water into the lake.

“I’ve seen everything come through here,” said plant superintendent Ron Bigelow, watching the foul muck course through the tanks, sluices and conveyors.

The plant, built in 1958 and improved in 1973, is in need of upgrading, and for that the town has its hopes set on state assistance funded by the federal Environmental Protection Agency.

Good luck.

The impasse over the federal budget could continue until after the November election, but the delay does not diminish the virtual certainty of major reductions in the size, scope and mission of EPA.

The extent of the realignment will remain unsettled until President Clinton and the Republican-led Congress come to terms over the agency’s 1996 appropriation. But EPA officials acknowledge that under any realistic scenario, they will receive a budget requiring significant cuts in virtually everything the agency does.

As a result, the kind of sewage treatment assistance being sought by Two Harbors is in question. So too are efforts to clean up toxic waste dumps and to fund state clean-water programs.

If Congress gets its way, EPA officials say they would be forced to eliminate 3,000 to 5,000 employees from a work force of nearly 18,000. Even if the agency’s final spending plan is not as severe as the GOP budget bill Clinton vetoed, there is little question that the EPA is destined to become the star example of “downsizing” in the public sector.

Although other federal operations also face leaner budgets, it is rare for a government agency to undergo the sort of shrinkage envisaged for the EPA. The magnitude of the reduction reflects the fact that many conservatives view the agency as an emblem of overgrown government.

Critics see the EPA as “the poster child of regulatory excess,” said a senior Senate aide with close ties to the agency. Rep. Jerry Lewis (R-Redlands) said controlling the agency would break “the pattern of undue burdens on sectors of our economy.”

Critics recall the EPA’s temporary ban two years ago on sales of a cayenne pepper spray marketed in Alaska as a bear repellent. Chefs could continue to sprinkle cayenne pepper on bear steaks, but the agency said companies couldn’t sell the spray to hikers to fend off an angry, living bear. The EPA said it imposed the ban in response to a competitor’s complaint that the spray had not been properly registered. It has since been registered and has won EPA’s approval.

Other disputes have not been so easily ended. For example, the EPA considers the pesticide Mirex a potential human carcinogen and has banned its use for two decades. But House Majority Whip Tom DeLay (R-Texas), a former exterminator who had often tangled with regulators, says the pesticide is harmless and can be an effective weapon against fire ants, a pest found throughout the South.

As written by Congress, the EPA budget for fiscal 1996 would cut total spending by 14% to $5.7 billion. Because Clinton vetoed the bill, the EPA is one of several agencies operating under temporary spending authority. But few doubt that in the end, the agency will suffer a significant reduction.

Compared to 1995 spending, the budget Congress sent to Clinton would:

* Cut spending on enforcing air-pollution, pesticide and clean-water standards by 7%.

* Cut funding to help states keep raw sewage from reaching beaches and waterways by 9%.

* Cut money earmarked for cleaning up hazardous waste sites by 13%.

* Reduce spending for science and technology activities by 10%.

The ultimate effect on the environment remains speculative until a final budget is enacted. But the toll on the agency itself is already being felt.

An aide to EPA Administrator Carol Browner tells of a mid-level official who encountered Browner on an elevator in the agency’s 12-story headquarters a few months ago as Congress was debating the environmental budget.

“Do you think I’ll have a job when this is over?” the official bluntly asked the administrator. Browner could only reply, with little conviction, “I hope so.”

“It’s tough right now,” Browner said in a recent interview. “There’s been an incredible level of uncertainty.”

Along with the personal uncertainty, environmentalists worry about the potential impact of the cuts in a complicated policy arena.

“The bottom line is, the air is going to get dirtier, the water is going to get more polluted and Americans are going to get sicker,” said Dan Becker, a lobbyist/analyst for the Sierra Club.

Browner said the agency already has fallen behind in preparing a court-ordered regulation on air pollution and a measure intended to protect communities from the cryptosporidium parasite in drinking water. Inspections are down, she said, along with enforcement of existing regulations.

Environmentalists characterize the Republican assault as a “stealth attack.” Environmental laws have not been rewritten; rather, Congress has simply refused to approve the funding needed to enforce the regulations.

Take the example of the Stasburg Landfill, 222 acres in a rural area south of Philadelphia into which 500 to 600 tons of polyvinyl chloride, a known carcinogen, and additional heavy-metal sludge were pumped in 1979. It finally made it onto the EPA’s list for cleanup this year.

“This was very close,” said W. Michael McCabe, the agency’s regional administrator. But with the budget approved by Congress, he said, “we wouldn’t have the additional money to move forward.”

Or consider the problems of Two Harbors, once a thriving iron port and now a quiet community of 3,600 people. Heavy rains and melting snow overwhelm the sewage system and the overflow--water from storm sewers and waste from homes, stores and small industrial sites--ends up in Lake Superior.

“Ultimately we want . . . zero discharge of nontreated water,” said Bigelow, the plant superintendent. But paying for a new facility, a $2-million proposition, is “becoming a serious burden in the community” without low-interest government loans, said Roger Simonson, the city administrator.

The community’s drinking water comes from Lake Superior, and a failure to adequately treat the waste flowing into the lake brings the risk of such dangers as those posed by cryptosporidia, which led to more than 100 deaths in Milwaukee in 1993.

But a senior Republican aide on the Senate Environment Committee, speaking on condition of anonymity, characterized some EPA programs as “money sinks,” citing the Superfund program for cleaning up toxic waste dumps and the clean-water loan fund.

Referring to the nearly 4,000 employees in the Superfund program, he said: “You’ve got to ask yourself, is that money well spent in the first place? Thirty-eight hundred employees? That’s outrageous. The threats the agency has to deal with are more important than some of these sites. If they’re taking a big hit in Superfund, my attitude is, who cares? Can they do more with less? Probably. It’s a hard agency to rescue because there are a lot of excesses.”

Even if the administration goes along with most of the cuts, some officials think the attempt to scale back spending on the environment may backfire.

“The Republicans look at environmental protection in very old or passe terms,” said a senior EPA official who requested anonymity. “They look at environmental protection as the birds and bunnies, and think the American people don’t give a damn about that.

“This isn’t about fuzzy animals running around in the forest. This is about what is happening in your community, in your home. They lost sight of that.”