FOR IMMEDIATE RELEASE: Friday, June 27, 2003
CONTACT: David Fox (202) 331-2962


WASHINGTON — With natural gas prices skyrocketing, a proposed reduction in funding for a federal energy assistance program could have a chilling effect on the poor and elderly, a coalition of advocates for the poor charged today.

At issue is funding for the Low Income Home Energy Assistance Program (LIHEAP), which was created to ensure that families living at or below the poverty level are not without heat during the winter's coldest months or without some cooling during deadly summer heat waves.

The House Appropriations Committee voted June 26 to provide $1.7 billion plus $100 million in emergency funds for the Low Income Home Energy Assistance Program in Fiscal 2004 -- a $200 million cut from the level recommended by President Bush.

The impact of the reduction could be dramatic and chilling for those in need, given predictions of higher natural gas prices and continuing volatility in the price of heating oil and propane, said the Campaign for Home Energy Assistance, a broad coalition of advocates for the poor and utilities that work with LIHEAP.

Federal Reserve Chairman Alan Greenspan warned Congress recently that he was worried about the runup in natural gas prices and the impact that would have on the economy. Energy Secretary Spencer Abraham, meanwhile, said natural gas prices have doubled over the past year and that the average residential winter heating bill for a typical Midwest consumer could be $915 next winter -- a 19 percent increase over last year -- if the trend continues.

"LIHEAP works. It keeps people in their homes. It keeps them alive," said David Fox, communications director for the Campaign. "But with forecasts of higher energy prices, rising unemployment and a shrinking budget, the program is facing its toughest challenge yet in meeting the needs of more than 4 million American households. So what some might call a relatively small cut in program funding could amount to a draconian cutback in buying power for those at greatest risk -- the poor, elderly, disabled, and working families with children who are living on the edge of poverty."

Lawmakers have said they did the best they could for LIHEAP and other programs contained in the Labor, Health & Human Services and Education appropriations bill.

"We know they have to make difficult choices; so do those LIHEAP serves," Fox said. "But the choices that our seniors and poor must make are whether to pay for food or medicine or pay for heating and cooling their homes."

Senate appropriators, meanwhile, have voted to provide $2 billion for LIHEAP in FY 2004, with no emergency funds -- roughly the same as the $1.99 billion for the current fiscal year.

The Senate bill is an improvement because the $2 billion is for the base program and ensures that all the money will be spent, but the Campaign said that with higher natural gas prices and continuing volatility in the price of heating oil and propane, it is still far short of what is needed.

###