Marc Ambinder:
The Low Income Home Energy Assistance Program, or LIHEAP, would see funding drop by about $3 billion from an authorized 2009 total of $5.1 billion. The proposed cut will not touch the program's emergency reserve fund, about $590 million, which can be used during particularly harsh cold snaps or extended heat spells, three officials told National Journal.
In 2010, Obama signed into law an omnibus budget resolution that released a total of about $5 billion in LIHEAP grants for 2011. Pointing to the increasing number of Americans who made use of the grants last year, advocates say that LIHEAP is already underfunded. The American Gas Association predicts that 3 million Americans eligible for the program won't be able to receive it unless LIHEAP funding stays at its current level.
How many people, if any, might actually lose the assistance is difficult to determine. Officials were quick to point out that LIHEAP spending has grown significantly over the past several years as the government tried to keep up with rising gas prices. In 2008, the government spent $2.8 billion on LIHEAP. In 2009, thanks to the Recovery Act, better known as the stimulus bill, the figure jumped to $8.1 billion. So the cut from that high level restores LIHEAP to something close to where it was before Obama took office. Other circumstances, such as the weather and fuel prices, could affect the distribution of benefits.
Although the move could have very real impacts on program beneficiaries, it will obviously have absolutely no material impact on the budget deficit. $3 billion is two-tenths of one percent of the overall budget deficit, so as a matter of fiscal policy it's essentially a non-event.