The President's Rationale On LIHEAP Makes Sense and His Budget Will Help Low-Income Families

While there are many initiatives and increases proposed in the 2012 President's budget that will give low-income families a much needed help in education, expanded child care, youth activities, access to post secondary education, workforce innovation, rental housing assistant, changing high-poverty neighborhoods, et al, most often, liberal critics are reactionary to one or two proposed cuts without looking at the whole picture within the budget. It is often a short sighted view that leads to many misunderstanding. The $2.5 Billion proposed cut to The Low Income Home Energy Assistance Program (LIHEAP) has been one that has been making its round in the Liberals circle as if the President's budget works against the interest of low-income families. So, let's explore LIHEAP first and read for yourself here and here for the other goodies in the budget that should help liberals realize that President Obama is on the side of the low-income and poor families.

The Low Income Home Energy Assistance Program (LIHEAP) is a program that helps mostly the poor and seniors stay warm and/or cool depending on the season by subsidizing a large portion of their energy cost. In 2008, the LIHEAP enacted funding was $2.6 Billion. In 2009, the LIHEAP enacted funding in total including funds from the Recovery Act (the stimulus bill) was $8.1 Billion. In 2010, the LIHEAP enacted funding was $5.1 Billion In 2011, the LIHEAP funding under the FY 2011 Continuing Resolution (CR) to date is $3.9 Billion and budgeted for full year at about $5.1 billion The 2012 proposed budget for LIHEAP is $2.6 Billion a reduction of $2.5 billion to the program from a year ago and at the 2008 level.

There is this meme that by reducing the level of funding to the LIHEAP Program to the 2008 level is as good as abandoning low-income families, seniors and the poor. Actually that is totally inaccurate. Since President Obama took office in 2009, the program has enjoyed a tremendous funding increase that assisted many low income families through subsides to Energy companies as well as through the Weatherization Assistant Program that has assisted 6.4 million low-income households contributing to an annual energy bill savings of $437 per household. Considering the leveling of the spiking oil price, the White House believes that the level of funding has to be adjusted and considers the current level of assistance not sustainable and a give away to Energy Companies. The LIHEAP program funding is a block grant which transfers the funds to the States which then pays the funds directly to the utility companies and not the customers. This same level of funding paid directly to energy companies while energy prices are now significantly lower than they were in 2009 and 2010 has become as good as a federal subsidy. It is also noted that the way the program has been administrated with its lack of oversight has contributed to abuse and fraud in the administration of the program. However, while the funding for LIHEAP has been reduced, it is also important to note that the Administration has placed a $590 million emergency reserve fund that is to be used in the cases severe cold and/or hot weather conditions. Any cuts to programs such as LIHEAP regardless of the fact that funding was more than double the level it used to be in 2008 is not the best politics for the White House because some in the Liberal Left will use it as a tool to say the Administration does not care for the poor even if sources within the Administration has indicated that they will be watching and will increase the funding level of the program if energy price spikes again.

However, such complaints from within the party sometime are a political asset in selling to low information voters that the Administration is serious about being disciplined about cuts while technically looking at the fine prints of the budget it has increased many programs that contribute to the poor and low-income families as noted below. In addition to 2010 tax deal that prevented tax increase (an average savings of $3000 for a family of four), extended unemployment benefits for 13 months preventing 7 million people from losing their benefit, allowed businesses to expense 100 percent of certain investments to spur job creation, extended college credit, contributed to an average tax savings of $1000 in payroll tax, etc ( Read here for more of the tax deal benefits), the Administrations' proposed budget has many programs that benefits low-income and poor families but are not highlighted.

Read here and here for a summary fact sheet of the President's budget that is designed to helping low-income and/or poor families. To highlight some of them:
1) $10 billion to fund Workforce Investment Act (WIA) programs to match unemployed people with jobs and give people with skill gaps the training 2) $227 million for the Treasury Department’s Community Development Financial Institutions (CDFI) Fund, which provides capital to low-income communities across the Nation and is targeting a portion of its funds to help bring grocery stores and other healthy food retailers to underserved urban and rural communities. 3) an increase for the Community Relations Service in the Department of Justice to fight hate crimes and provides an $18 million, a 5 percent increase over the 2010 enacted level. 4) proposes to double loan amounts for Historically Black Colleges and Universities (HBCU) above the 2010 enacted level. (In fact, the POTUS just signed a $98 million new funding to HBCU today) 5) invests $150 million in a new initiative to increase college access and completion and improve educational productivity 6) maintains its commitment to Pell Grants by sustaining the $5,550 maximum award, which will help over 9 million needy students in 2012. The budget also increase the Federal Pell Grant program from $18.2 billion in the 2008-2009 award year to a proposed $34.8 billion in 2011-2012. 7) extends the child tax credit at $1000, rather than letting it revert to $500. It also extends refundability, which continues a tax cut that goes to 10.5 million working families with 18 million children. 8) helps students afford the cost of college, the new American Opportunity Tax Credit – a partially refundable tax credit worth up to $2,500 per student per year that helps more than 8 million students and their families afford the cost of college. 9) provides $7.9 billion for discretionary nutrition program support that supports 9.6 million participants in the WIC program, which is critical to the health of pregnant women, new mothers, and their infants and young children. 10) provides $250 million for the Choice Neighborhoods initiative to continue transformative investments in high-poverty neighborhoods where distressed HUD-assisted public and privately owned housing is located. 11) requests $19.2 billion for the Housing Choice Voucher program to help more than two million extremely low- to low-income families 12) provides $9.4 billion for Project-Based Rental Assistance to preserve approximately 1.3 million affordable units through increased funding for contracts with private owners of multifamily properties. 13) includes $8.099 billion for Head Start and Early Head Start to serve approximately 968,000 children and families, maintaining the historic expansion undertaken with Recovery Act funds 14) includes $6.3 billion for the Child Care and Development Fund, an additional $1.3 billion, to support 1.7 million children with child care subsidies 15) includes $2.5 billion over 10 years to support a comprehensive child welfare reform proposal in order to help prevent abuse and keep children in safe homes and out of long-term foster care placements 16) provides $1 billion over 10 years to encourage States to pass through child support payments to families rather than retaining those payments 17) provides $570 million over 10 years for States to provide access and visitation services, which can strengthen a father’s relationship with his children and facilitate the payment of child support 18) includes over $2.5 billion in HUD funds to make progress toward the goals of the Federal Strategic Plan to End Homelessness
Selective outrage does not help Democrats achieve a coherent message to win the hearts and minds of voters if the public is misinformed and the President's agenda is misunderstood. As Democrats, it is important to take the time to understand the President's vision as a whole rather than looking at only one or two specific cuts to make a generalization about the intent of the Administration. One thing that is clear and known is that if any of the President's past actions are any indication, the President is committed and working to improve the lives of low-income families.