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Federal heating subsidies in spotlight after cold grips nation

The nation is emerging from a deep freeze but with winter just beginning, the federal safety-net program for home heating becomes all the more important – and there’s less money for it now than last year. 

Bob Herbert and Annie Lowrey discuss what each side of Congress is doing to tackle poverty, the effectiveness of safety net programs, and what needs to be done moving forward.

The 2011 Budget Control Act, which cuts discretionary spending, reduced the Low Income Home Energy Assistance Program or LIHEAP program by about $155 million in Fiscal Year 2013, to $3.3 billion.

For Americans living from paycheck to paycheck or on a fixed income, LIHEAP “helps many of them get through the winter and some of them in fact get through the cooling season in the summer,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Association. His group represents state officials in charge of administering the subsidies which go to more than six million low-income households.

“The families on fixed incomes or living right at the margin don’t have the extra $400 to get through January if the cost of home heating spikes. For some families, it’s really a public health issue; the elderly in the cold can become sick, and for a family with young children, the children can’t perform as well in school.”

And, he added, “we have an appropriation that is less than it was last year, and the year before, and the year before that. So we don’t have a lot of flexibility in our budget to address additional families. And that’s our big concern.”

LIHEAP spending – unlike many other safety-net programs – isn’t mandatory or automatic spending; it can vary from year to year. It nearly tripled from 2002 to 2010, peaking at more than $5 billion that year.

In November, the Department of Health and Human Services released nearly $3 billion in funding for LIHEAP based on the amount approved in the bill which funds the federal government through Jan. 15.

But senators especially from Northeastern and Midwestern states, are urging President Barack Obama in his Fiscal Year 2015 budget blueprint to seek $4.7 billion in LIHEAP funding for the new fiscal year that starts in October.

Larry Downing / Reuters

A man bundles up against the cold near the White House as temperatures plunged along the East coast due to the "polar vortex" of dense, frigid air in Washington January 7, 2014.

Wolfe said that “There’s a recognition, even among conservatives, that families, especially low-income families, are not in a position to address volatility in energy prices or volatility in weather conditions.”

And there’s no way to know if the current cold snap will be followed later this winter by more episodes of extreme cold and higher demands on LIHEAP.

In one bit of good news, the U.S. energy picture has changed dramatically in recent years.

The boom in domestically produced natural gas, partly due to fracking and drilling in states such as Pennsylvania, drove down the price of natural gas for residential consumers by about 25 percent from 2006 to 2013.  While increased domestic drilling “hasn’t brought down the cost of home heating with heating oil very much, it has stabilized, but it is stabilizing at a very high level. So to heat your home with heating oil in the Northeast is still running at about $2,300 this winter, whereas without fracking it might have been higher,” Wolfe said.

But he added that families using natural gas to heat their homes “are clearly benefitting from the lower prices…. A decline in price clearly helps. There’s no question that a poor family is much better off with the cost of home heating being $500 or $600 than $1,000. The need for LIHEAP will go down. This is clearly having long-term implications that will help many families.”