Bush, New England Ready to Rumble over Home Heating Program

By Jim Geraghty
States News Service
February 15, 2002

When it comes to paying winter heating bills, it doesn't matter whether the temperature goes down if unemployment goes up.

That's the message from New England lawmakers as they prepare to override the Bush administration's efforts to cut future spending on the Low Income Home Energy Assistance Program and adjust the program's funding formula. While the winter has been mild and energy prices are lower than last year, rising unemployment has forced more New England residents to seek government aid in paying their heating bills.

For the past several years, the heating assistance program - known as LIHEAP -- has helped about 4 million households per year nationwide pay their heating bills. The program also provides cooling assistance to about 400,000 households and weatherization assistance to about 90,000 more. In his proposed budget for the 2003 fiscal year, the president asked Congress to cut total LIHEAP spending from $1.7 billion to $1.4 billion.

Sen. Edward M. Kennedy, D-Mass., promised that Bush's proposals will face stiff opposition in the Senate, particularly on the Senate health committee he chairs.

"This program has always enjoyed bipartisan support," Kennedy said while visiting the Boston offices of Action for Boston Community Development, which administers the largest federal fuel assistance program in the state. "But we're here to fight. LIHEAP is a lifeline to thousands of families in Massachusetts, and we're not going to turn our backs on them."

The administration is also currently holding an additional $300 million in supplemental spending for the program approved last year.

Administration officials like Wade Horn, the assistant secretary of Health and Human Services who oversees the program, maintain that unseasonably warm weather and cheaper fuel costs this year have lowered demands for heating assistance. By keeping the funding in reserve, the administration argues, they are ready to respond to a major deep freeze.

But lawmakers like Maine's two Republican senators, Olympia Snowe and Susan Collins, say that their state is burdened with a greater need because of rising unemployment and a slowdown in the economy.

"For many low-income families, LIHEAP assistance can make the difference in the family budget between heating and eating," Snowe and Collins wrote in a joint statement. "The program is a vital protection for these families, and we believe release of assistance is crucial at this time."

In addition to the fight over funding levels, the Bush administration wants Congress to establish new ways to distribute the funds that would focus on income levels and energy costs throughout the country instead of those states with cold weather. The aim is to help states faced with higher energy costs during summer months when many rely on air conditioners.

Mark Wolfe, executive director of the National Energy Assistance Directors' Association, says the Bush administration can make the case that the funding formula ought to be reexamined with an eye toward regional equity. The Northeast has about 40 percent of the nation's population, but gets about 60 percent of LIHEAP funding.

According to HHS, between 16 and 48 percent of eligible households in the New England states received aid in 2001; for California, only 3.5 percent received aid, for Florida, 2.6
percent, and for Texas, 2.5 percent.

But Wolfe says that LIHEAP's real problem is that not enough money is currently being spent to run a national program. He estimates that to fund the entire program at about the level that Massachusetts runs its program, Congress would have to spend $3.5 billion to $4 billion per year.

"Bush is proposing on one hand to equalize the weight of heating and cooling expenditures," Wolfe said. "On the other hand, he wants to cut the appropriations for the program."

Bush's proposal would change the fundamental mission of the program, according to Matt Kane, a budget analyst for the Northeast-Midwest Institute. His organization is a Washington-based, private research group dedicated to equity for Northeastern and Midwestern states in federal spending and regulation.

"It's important to keep in mind that this program was put in place to help low income families with heating bills," Kane said. "I've lived in the south in the summer without air conditioning, and it worked. I would not live in Boston without heat in the winter."

LIHEAP currently serves over 120,000 households in the Bay State, where demand for federal fuel assistance is on the rise as the economy slows. Either of the two proposed changes would have a significant impact on Massachusetts.

"If the base level funding decrease that Bush proposed went through, 26,000 fewer households would get funding assistance in Massachusetts," said Brian O'Connor, spokesman for Citizens Energy Corp., a non-profit company that provides low-cost heating oil to the poor and the elderly. "If the formula change were to go through, 55,000 households would be cut off from receiving fuel assistance."

"Senior citizens shouldn't have to warm their hands by an open stove because of short-sighted budget priorities that deliver billions to big corporations at the expense of the poor," said Joe Kennedy, chairman of Citizens Energy Corp., a former five-term Democratic congressman from Boston, and Sen. Kennedy's nephew.

Democrats may use the LIHEAP issue to drive a wedge between the White House and New England's GOP representatives, who oppose the proposed reduction and the decision to not release the additional $300 million. Throughout the winter, the region's Democrats have pointed to the cuts as an example of the administration having the wrong budget priorities.
"Taking away heating assistance from poor families to pay for wasteful subsidies for companies like Enron is simply the wrong choice because it doesn't reflect our values as a people," said Sen. John F. Kerry during an appearance with both Kennedys at the offices for Action for Boston Community Development.

"The Bush administration's cuts in the LIHEAP budget reflect a fundamentally misguided sense of national priorities," said Rep. Edward J. Markey, D-Malden. "Instead of pressing forward with tax cut schemes that disproportionately benefit the wealthy, and slashing programs that help families of modest incomes and seniors on fixed incomes, such as LIHEAP, we should be rejecting new tax cuts and paring back those that go to the top 1 percent in income levels."

Last year, Rep. Charles Pickering, R-Miss., floated a proposal to have LIHEAP funding calculated solely on the poverty level, a move which would increase the percent of funding to Mississippi and other southern states. Pickering withdrew his amendment when it became clear it would not pass.

"It's important for people in the region to recognize that there are folks eyeballing those dollars and looking to take them away," Kane said.

While the stiff spine of the region's representatives means Bush's proposals will face tough opposition on Capitol Hill, some analysts believe the administration could have some success in adjusting the LIHEAP program.

"If the administration sends over a proposal to change the formula, the House could go along with it," Wolfe said. "It's not out of the question that we could have a fight on the formula in Congress this year."