The Federal Subsidy that Just Won’t Die: LIHEAP
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The Fiscal Times
March 2, 2011

Back in 1995, Rep. Hal Rogers, R- Ky., tried his best to trim a long-standing federal program to subsidize heating and cooling costs of low-income families.  Rogers and other conservatives said the program had to be reduced if the government was serious about trying to balance the budget.

Lawmakers from the cold climates of New England and the Midwest, and from hot climates in the South and Southwest, ganged up on Rogers, describing him as “insensitive to the poor” and his amendment to a spending bill was defeated.

Now chairman of the House Appropriations Committee, Rogers is singing a different tune.  In January, when Kentucky was suffering through brutal cold spells and unusual snowfall, Rogers fretted that low-income families, particularly seniors and households with small children, might go without heat.  “In our region, home heating costs can put a strain on the budgets of every family trying to make ends meet,” Rogers said in a press release  announcing a boost in  LIHEAP funds to bring Kentucky’s total this year to $57 million.

Rogers declined through a spokesman to explain his differing positions on LIHEAP. He is one of scores of politicians who have tried –and failed – to cut or eliminate the program over the past three decades. Just a week ago, House Republicans pushed through a massive spending cut resolution that included a $400 million reduction in LIHEAP this year. On Tuesday, the House approved a much scaled back version of that resolution – without the LIHEAP cut.

The federal Low-Income Home Energy Assistance Program has been rescued from the budgetary dead so many times it’s like it came from the biblical story of Lazarus. It  was created in 1981 on the heels of the 1970s energy crisis – and is designed to help poor people in cold climates heat their homes in winter or pay utility bills to get air conditioning in summer. Former presidents George H.W. Bush, Bill Clinton, and now President Obama have tried unsuccessfully to cut or scale back the program.

Obama is trying again, proposing to cut the annual LIHEAP program from $5.1 billion to $2.5 billion as part of his fiscal 2012 budget unveiled on Feb. 14. Obama said in his budget message that he was justified in cutting back LIHEAP to 2008 levels because of  “current forecasts for more moderate energy prices in winter 2011-2012.”  That was before Tunisia, Egypt and Libya exploded, bringing uncertainty to the oil markets and rising prices.

There were loud objections to Obama’s proposal. Sen. John Kerry, D-Mass., one of the chief defenders of the program, said “We simply cannot afford to cut LIHEAP funding during one of the most brutal winters in history.”

Sen. Susan Collins, R-Maine, postulated that Obama proposed to slash LIHEAP because he knew Congress would eventually restore the funding. It’s like "cutting the football team when you know it's going to be restored,” she told a Connecticut newspaper.

The reasons for LIHEAP’s resilience are varied, and include influential friends in Congress, inevitably rising oil prices and, the most powerful of all, tales of children and grandparents freezing in their homes or dying of heat. 

There’s Diane Clark, 58, who lives in a three-family home in South Boston with three children. The children were her daughter’s but she adopted them when her daughter could not provide for them. Clark works part time at the Post Office, but doesn’t make enough money to cover her heating bills, even when keeping the inside thermometer at 65 degrees at night.

“I borrowed from my sister,” she told The Fiscal Times. “I keep the heat low. I paid bills a little late.” She received LIHEAP assistance, as well as help from Citizens Energy, a non-profit founded by former  Rep. Joe Kennedy, D-Mass., to help keep the home warm for Amelia, 8, Andrew, 4, and Olivia, 2.

Beyond the human drama, politicians who want to cut LIHEAP face high political hurdles. Since 1984, when the program was reauthorized, a formula that strictly benefitted cold weather states was changed to include warm states.

New York, Pennsylvania, Ohio, Illinois, and Michigan get the most from the program. Proportionally, small, cold states like Maine and Massachusetts are big beneficiaries. But nearly every state now gets something.

Isabel Sawhill, an analyst at the Brookings Institution who spearheaded former President Clinton’s unsuccessful effort to cut LIHEAP as associate director of the Office of Management and Budget for social programs, says presidents may have good intentions when attempting to cut the heating and cooling program, but generally that doesn’t matter.

“We developed an argument that LIHEAP had been introduced during the energy crisis when prices were very high. We had good arguments. We were under discretionary spending caps,” she said. “I don’t think we thought it was going to be easy, but I don’t think we expected such an outburst of resistance from key people.”
 
Related Links:
Obama’s Budget Would Cut Heat Subsidies for Poor (CNN Money)
Obama Defends Cuts to Home Heating Aid Program (Boston Globe)
Many Households Warming to LIHEAP (Peoria Journal Star)