Sunday, December 11, 2011

President Obama: Wants you to be cool, too...

As the cold season begins to take hold over much of the Country, people are finding it more difficult to stay warm on those long, cold nights. And, its about to get worse.

With trimming wasteful spending out of the gorged Federal Budget, many different programs have seen funding reduced. One of these programs, the Low Income Energy Assistance Program (LIHEAP), is one such program. LIHEAP was part of the Omnibus Reconciliation Act of 1981, under President Reagan. The basic idea was that the Federal Government would supply each of the States with monies every year to help low income residents pay for their heating costs during Winter heating season, which runs from October through March annually. Its means tested, meaning an applicant has to prove through a verification of income. The income threshold to qualify for heating assistance is attached to the Federal Poverty guidelines is that the household income can not exceed 150% of the poverty level. For example, a family of four qualifies if they make less than $29, 025 a year. Before taxes, that's about $2,419 dollars a month or $558 dollars a week. Before taxes.

President Obama has a goal of reducing unnecessary and wasteful spending in the Federal Budget. Further, he has stated many times, that programs he likes have had to be cut back with funding because of the fiscal situation we're currently in. In tough times, you tighten your belt. I understand that. I think most of us do. In these politically charged times, it seems we're now arriving at a point where anything associated with the Federal Government, except for the Military, is a guilty pleasure. While I find that method of thinking to be short-sighted, the underlying idea is sound.

Specifically, the Obama Budget for fiscal 2012 has a reduction of Federal funding levels for LIHEAP that return to funding levels prior to the energy price spikes of late 2008 early 2009. Congress increased the amount of assistance for FY 2009-2011. That helped a lot of people. If we look at this graph from the Center on Budget & Policy Priorities, you'll see LIHEAP was under-funded with relation to actual heating costs prior to 2009...

...Looking at the trajectory of the energy prices line, you can see the gap between the proposed 2012 budget allotments. The increased funding was late to the party and it seems, plans on leaving early.

Heating prices, especially heating fuel prices aren't dropping significantly, if at all. Heating fuel, is growing in price as we see in Figure 2:

With a greater need today, as a product of a prolonged high unemployment rate and generally weak economy, it seems to be the wrong time to reduce this program's funding. The pool of people and families that need help with seasonal heating costs is growing larger:

This is the wrong time and wrong program to harvest savings from in the Federal Budget.



  1. The problem with the people who cut these programs is that they are too far removed from the people who depend on the things the politicians cut and the have no basic understanding of why these programs are there in the first place.

    It's easy to call people "welfare bums" when you don't know anyone who GETS welfare.

  2. Hi Jim: You might say its almost like making large wagers, eh?

    The $10,000 variety, perhaps?

    Thanks for reading...