Bush Proposes $555 Million Cut in Energy Assistance

April 10, 2001

WASHINGTON -- The Low Income Home Energy Assistance Program (LIHEAP) will face a cut of over $500 million if the budget for FY2002 released today by President George W. Bush becomes law.

As many as 3.6 million families in 18 states risk having their energy cut off because of rapidly increasing energy costs, according to a study released last week by the National Energy Assistance Director's Association (NEADA). Many states do not permit shut-offs of service during the winter months, but those moratoriums generally end on March 31.

Said Mark Wolfe, executive director of NEADA, "We have never seen arrearages like this; a reduction in LIHEAP funding of this magnitude will result in 1 million fewer household's being assisted in the coming year."

The Bush proposal calls for $1.4 billion in regular funding for LIHEAP plus an additional $300 million in emergency funds -- the same level that Congress approved for FY 2001 last December. However, this past winter an additional $555 million was available to help low-income households because Congress had approved a supplemental appropriation of $600 million during the summer of 2000. Only $45 million was used for cooling assistance during the summer, and the balance was used for the heating season just completed.

"When there is no relief in sight for high energy prices, reducing the available funds for LIHEAP from $2.255 billion to $1.7 billion must be viewed as a cut," said James Benfield, executive director of the Campaign for Home Energy Assistance, formerly the Campaign to Keep America Warm.

These funds cannot be replaced with private sector donations. Historically, private contributions to fuel funds are under $100 million annually, according to surveys conducted by the National Fuel Funds Network.

Then-candidate George W. Bush said during a televised presidential debate on October 5, "First and foremost we have to fully fund LIHEAP."

However, the funding proposed by the President falls short of that authorized by Congress, which is $2.0 billion plus an additional $600 million for emergency assistance. The Senate recently agreed to raise that limit to $3.4 billion plus $600 million in emergency assistance.

"Inability to pay utilities is second only to inability to pay rent as a reason for homelessness. This cut will hurt," Benfield said.