In response to reports that President Obama's Fiscal Year 2012 budget proposal will contain over $2.5 billion in cuts to the Low Income Home Energy Assistance Program (LIHEAP), U.S. Senators Jack Reed (D-RI) and Olympia J. Snowe (R-Maine) are leading the bipartisan effort to protect funding for this essential program. LIHEAP is a federal block grant program that provides states with annual funding to operate home energy assistance programs for seniors and low-income households.
Today, Senators Reed, Snowe, and 29 of their colleagues are sending a bipartisan letter urging the Office of Management and Budget (OMB) to reconsider this decision in light of the economic hardships facing low-income families and seniors.
"At a time when we must all confront the challenges of the deficit, we must first take great care to prioritize and protect the programs that are providing struggling Americans with critical assistance in these difficult times," said Senator Reed, a longtime champion of LIHEAP. "To cut this critical funding during one of the coldest winters in recent memory would not only be devastating for the individuals who rely on LIHEAP to keep their families safe and warm, but would serve as a threat to our national economic recovery."
"The consequences of this proposal will disproportionately affect New Englanders, who are already facing a 25 percent increase in home heating oil this year," said Senator Snowe. "The LIHEAP program is a necessity, not a luxury, and the President must fully account for the devastating social impact significant cuts would have on families in Maine and throughout the Northeast as they struggle to weather the current economic storm."
Due to elevated prices of energy and high unemployment levels, for the last two years Senators Reed and Snowe have led the effort to secure $5.1 billion annually for LIHEAP to help more than 8.7 million low-income households nationwide, including nearly 40,000 people in Rhode Island and 63,000 in Maine.
The text of the letter follows:
Jacob J. Lew
Office of Management and Budget
725 17th Street, NW
Washington, D.C. 20503
Dear Director Lew:
Congress and the Administration confront challenging fiscal decisions, and we recognize that we will need to work cooperatively to address our country's deficit in a manner that will promote job growth and economic recovery. However, we are deeply concerned by reports of very large cuts to the Low Income Home Energy Assistance Program (LIHEAP) in the President's Fiscal Year 2012 budget. We ask that you reconsider this decision in light of the economic hardships facing low-income families and seniors.
We believe it is critical that careful attention is paid to the effect of rising energy prices on our economic recovery. According to the most recent data, energy costs are increasingly taking up a larger share of U.S. consumers' budgets, accounting for more than 6 percent as of December. Historically, according to Professor James Hamilton at the University of California, when energy costs approach 5 percent of consumers' budgets, there is a burden on economic growth as consumers are forced to reduce spending on other necessities such as food, health care, and housing. These are the hard economic realities facing millions of Americans as gasoline, heating oil, and electricity prices increase across the country.
LIHEAP directly addresses these economic challenges. The program helps low-income families and seniors with their energy bills, while at the same time generates $1.13 in economic activity for every dollar in benefits paid, according to economists Mark Zandi and Alan S. Blinder. We strongly believe that the Administration's Fiscal Year 2012 (FY12) budget proposal should reflect this. Increased assistance for LIHEAP and energy efficiency improvements, such as weatherization programs and increased residential tax credits, will mitigate the burden on our economy from rising energy prices. Failing to provide basic energy assistance for our low-income families, the millions of Americans seeking work, and middle-income Americans may threaten our economic recovery.
We appreciate your consideration of our request and look forward to working with you to recognize these priorities as we confront our nation's economic and budget challenges.
John D. Rockefeller IV