U.S. Senators Susan Collins and Olympia J. Snowe joined several of their colleauges today in writing to the President’s Budget Director to express their concerns regarding the President’s reported proposal to reduce billions of dollars in critical home heating assistance provided to seniors and low income families through the Low Income Home Energy Assistance Program (LIHEAP). The President’s proposal would result in a reduction of home heating or cooling assistance for nearly 6 million Americans who are currently using the program this year, with more than 60,000 living in Maine. Under the President's proposal, LIHEAP assistance for Maine could be cut from this year's level of $56 million to as little as $26.8 million next year – a 52 percent cut in assistance.
"I am concerned by reports that the President’s budget proposes to cut LIHEAP funding by nearly half," said Senator Collins. "Such a severe cut would have a devastating impact on Mainers, many of whom otherwise would be unable to pay their heating bills this winter without LIHEAP assistance. Maine’s low-income families and seniors are already struggling with rising energy costs and should not be forced to choose between heating their homes and other vital necessities such as food and medications. There are many other areas of the budget that can be cut, and that would not result in such harmful consequences for our most vulnerable families and senior citizens."
“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."
The text of the letter follows:
February 11, 2011
Jacob J. Lew
Director
Office of Budget and Management
725 17th Street, NW
Washington, D.C. 20503
Dear Director Lew:
As you know, Congress and the Administration will 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 they generate $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 obstacle to economic growth. 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.