Center for American Progress

Low-Income Households Deserve Full Funding from LIHEAP

Low-Income Households Deserve Full Funding from LIHEAP

Congress should act to fully fund the Low Income Home Energy Assistance Program to help families pay for rising energy costs.

Today the Senate Health, Education, Labor, and Pensions Subcommittee on Children and Families will address the issue of rising home heating costs and funding for The Low Income Home Energy Assistance Program. The program helps low-income households—particularly those with the lowest incomes that pay a high proportion of household income for home energy—meet their immediate home energy needs. With sustained higher energy prices and the number of eligible households steadily growing, it is imperative that LIHEAP receive the full funding of $5.1 billion for 2008 authorized by the Energy Independence and Security Act.

The program is a critical component of government efforts to help low-income seniors and families avoid hypothermia in the winter and heat stroke in the summer. The demand for this program is growing as increases in energy prices compromise these populations’ ability to pay. In FY 2006, for example, 5.7 million households received program heating assistance, the highest number of households served in 13 years.

A large amount of LIHEAP assistance helps families in northern and Midwestern states keep their heat on during the winter, and families in southern states keep air conditioning on during heat waves. However, as funding is increased, more money is available for families in other parts of the country battling costs.

Recent national studies indicate the dire choices low-income households confront when energy bills are unaffordable. Faced with high bills, families cut back on necessities such as food, medicine, and medical care. These vulnerable households need assistance to bring energy costs within an affordable range.

Energy bills have always consumed a greater percentage of a low-income household’s income than they do for non-low income households, but those numbers have only grown worse. In FY 2004, when energy bills were not as high as they are now, annual energy bills for a LIHEAP household averaged 18.9 percent of the household’s annual income compared to 3.0 percent for non-low income households. The heating/cooling affordability gap, which is the difference between actual heating/cooling bills and bills that are set equal to an affordable percentage of a household’s income, is estimated to be over $10 billion.

In his budget proposal for FY 2009, President Bush proposed a $570 million cut to LIHEAP, which is a 22 percent cut from FY 2008 before adjusting for changes in energy prices. This amounts to the same funding for the program as the 2001 budget, even though home energy prices have increased 65 percent since then.

With the price of oil hitting a record high Monday, low-income households will see higher prices for gasoline, food, and other necessities. They will need the additional funding to help them with home energy costs, especially with summer just a few months away. Congress should act now to fully fund LIHEAP and aid those who are being squeezed from all sides.

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