White House Proposes $300 Million Reduction
in LIHEAP Funding for Fiscal 2003

February 21, 2002

WASHINGTON --  The President's budget proposal for Fiscal Year 2003 would reduce funding for the Low Income Home Energy Assistance Program from $1.7 billion plus $300 million in emergency funds approved for FY 2002 to $1.4 billion plus $300 million in emergency funds.

President Bush’s budget recommendations cited the following justification for the cutback:
"In response to the Department of Energy forecasts of lower fuel costs, the budget contains $1.7 billion to help low-income households cover home heating and cooling costs. This amount includes a contingency fund of $300 million for unanticipated needs that may arise."

Congress passed an appropriations bill in late December that increased funding for LIHEAP from $1.4 billion to $1.7 billion in FY ’02. Although the President signed that bill, his new budget would return LIHEAP funding to the $1.4 billion level.

The Administration has refused to release any emergency money this year, arguing that energy prices have fallen, the weather is mild and the additional funds are not needed. What is being ignored is the higher level of unemployment and the large number of arrearages that low-income families faced coming out of last winter.

"Low-income energy assistance is important to the Administration," the White House said in a letter to the Campaign for Home Energy Assistance that outlined the rationale for the reduction.

"In early June the President requested supplemental contingency funds for LIHEAP as the fund had been depleted last winter due to high energy costs and cool temperatures," the letter said. "Fortunately, temperatures across the nation during the summer were typical for the time of year, and in many states, milder than usual, obviating the need for emergency cooling-related assistance."

The FY 2003 budget proposal also provides the following statement regarding the Administration’s position on reauthorization:

"The legislatively established formula currently used to distribute LIHEAP block grant funds to states is based on 20-year-old population and winter heating costs data.

The Administration is interested in options that would make block grant allocations more equitable by basing the formula on current home energy expenditures paid by low-income households."