Monday, January 30, 2012

The Economic Importance of LIHEAP

LIHEAP is the main federal program that helps low-income households and seniors with their energy bills, providing vital assistance during both the cold winter and hot summer months. Even though the number of households eligible for the program continues to exceed those receiving assistance, this funding has been a lifeline during the economic downturn and rising energy costs, helping to ensure that people do not have to choose between paying their energy bills and paying for food or medicine. Moreover, the funds invested in LIHEAP help stimulate the economy, generating $1.13 in economic activity for every dollar in benefits paid, according to economists Mark Zandi and Alan S. Blinder.

Americans continue to face challenging times. The U.S. Census recently reported that 46.2 million people lived in poverty in 2010, the largest number in the 52 year history of published poverty estimates. In addition, according to the National Energy Assistance Director’s Association (NEADA), last year LIHEAP provided vital energy assistance to 8.9 million households,an increase of 54 percent since 2008. Even more striking is that the number of veteran households served increased by more than 150 percent during the same period. Indeed, the number of veteran households served by LIHEAP has increased from about 700,000 in Fiscal Year 2008 to 1.78 million in Fiscal Year 2011, which represents an increase from 12 percent of total LIHEAP recipients to 20 percent since 2008.

The increase in recipients comes at an especially bad time. Congress recently cut LIHEAP funding by 25 percent from $4.7 million in Fiscal Year 2011 to $3.5 million in Fiscal Year 2012 which officially stared on October 1. The average grant reflect the cut, dropping to $308 from $417.