Harper Collins Dictionary of Environmental Science defines sludge as: "A viscous, semi-solid mixture of bacteria, virus-laden organic matter, toxic metals, synthetic organic chemicals, and settled solids removed from domestic and industrial waste water at sewage treatment plants." 

Industry definition: Biosolids are solid, semi-solid or liquid materials, resulting from treatment of domestic sewage, that have been sufficiently processed to permit these materials to be safely land-applied." 

According to John Stauber and Sheldon Rampton, in their book TOXIC SLUDGE IS GOOD FOR YOU, government and industry thought that the public would not readily accept the toxic soup of pathogen laden, virus laden domestic, industrial and hazardous waste spread on farm land as "fertilizer", so they decided to orchestrate a campaign to make sludge more acceptable to the public.. They came up with a more environmentally friendly name. "Biosolids" is the sanitized name given to sludge by the Name Change Task Force in 1991. Along with the new name they developed a new definition and description. The biosolids program was now called " beneficial use". James Bynum, director of an organization called Help for Sewage Victims said " The beneficial sludge use policy simply changed the name from sludge to fertilizer, and the regulation changed the character of sludge from polluted to clean so it could be recycled with a minimum of public resistance......and dumped on farmland without anyone having any responsibility.....There is a real concern for everyone when a bureaucrat can write a regulation which circumvents the liability provisions of the major Congressional mandated environmental laws, by simply changing the name of a regulated material." 

Most scientists at the time did not buy EPA's "theory". Melvin Kramer, an infectious disease epidemiologist who had been researching the issue since the late 1970s, said EPA's plan for sludge disposal poses "a significant health hazard to the population in general, but especially the elderly, children, and infirm, both in terms of nuisances as exemplified by excessive putrid odors and minor, allergic reactions... to life-threatening diseases." Stauber and Rampton point out their investigation into the PR campaign for "beneficial use" of sewage sludge revealed a murky tangle of corporate and government bureaucracies, conflict of interest, and a cover-up of massive hazards to the environment and human health.

                                               CDC/NIOSH
"Do we know these pathogens can cause disease? Yes, the association between poor hygiene, raw sewage, and infectious disease is well established. Most of the pathogenic bacteria, viruses, and parasites in biosolids are enteric, which means they are present in the intestinal tracts of humans and animals. Enteric organisms that may be found in biosolids include, but are not limited to: Escherichia coli, Salmonella, Shigella, Campylobacter, Cryptosporidium, Giardia, Norwalk virus, and enteroviruses. Exposure may potentially result in disease (e.g., gastroenteritis) or in a carrier state in which an infection does not clinically manifest itself in the individual but can be spread to others. These enteric organisms are usually associated with self-limited gastrointestinal illness but can develop into more serious diseases in sensitive populations such as immune-compromised individuals, infants, young children, and especially the elderly." 

Source:   Centers for Disease Control and Prevention, NIOSH Guidance For Controlling Potential Risks To Workers Exposed to Class B Biosolids, Publication No. 2002-149.