The Biden administration has reached an agreement with states reliant on the Colorado River to reduce their water usage temporarily in exchange for $1 billion in federal funding. Under the agreement, California, Arizona, and Nevada will voluntarily conserve 3 million acre-feet of water until 2026, equivalent to about 13% of their total allocation from the river. The Colorado River supplies water to over 40 million people and around 5.5 million acres of farmland in seven U.S. states. A combination of prolonged drought, declining reservoir levels, and increased demand has strained the river. The temporary agreement avoids the imposition of unilateral water cuts by the federal government on all seven states.