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Obama's Big Budget Cut Proposals Target The Poor

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WASHINGTON -- As Democrats and Republicans wrangle over fiscal austerity and the shape of the 2012 federal budget, the White House is targeting programs in the $4 trillion budget that benefit low-income Americans.

It's a sop to moderates and conservatives, and it's likely to infuriate voters who put President Barack Obama in the White House.

In the past week, the Obama administration has signaled that it will propose significant cuts to community service block grants and an energy assistance program that helps poor people stay warm in the winter and cool in the summer.

A White House source familiar with the budget process told HuffPost that the president will propose cutting $2.5 billion from the Low Income Home Energy Assistance Program, or LIHEAP, which received $5.1 billion in federal funds in 2009. That program distributes money to states, which then distribute it to social service agencies to help families heat or cool their homes.

The National Energy Assistance Directors' Association, a group that represents state aid officials in Washington, said Wednesday that the bad economy has forced more low-income households to rely on LIHEAP. About 8.3 million households used it in fiscal 2010, up from 7.7 million and 5.8 million during the previous two years, and the association expects eligible applications to rise to 8.9 million this year. NEADA director Mark Wolfe told HuffPost that the administration's proposal would cut off 3.5 million households.

"It's just a cruel proposal," Wolfe said. "What this would do is take some of the most vulnerable families in the country off energy assistance."

HuffPost readers: Used LIHEAP to heat your home? Tell us about it -- email arthur@huffingtonpost.com.

Wolfe said he assumed the White House had "drawn a circle" around education-aid programs like Pell Grants and Head Start. "My guess is that the administration sees a course of programs they want to protect," he said. "But why offer this up before the Republicans suggest cuts. Why volunteer us? Why volunteer LIHEAP?"

The White House declined to address these concerns on the record, though a source noted that energy prices are lower now than when Congress increased LIHEAP funding for 2009.

Although energy prices have indeed declined since then, Bob Greenstein, the director of the Center on Budget and Policy Priorities, a progressive think tank, pointed out that the overall economy hasn't improved much since then. Price drops don't offer much relief to people still looking for jobs.

"The unemployment rate is higher and there are lot more people that have low incomes today than during fiscal 2008 when this was written," Greenstein said. "I'm certainly surprised and disappointed at this cut."

And this isn't the only program for low-income people that the White House has put on the chopping block, at a time when the administration and Congress chose to extend tax cuts for upper income and wealthy Americans.

Community service block grants, which fund community organizers in poor neighborhoods, are also facing cuts. During the 2008 campaign, Obama emphasized that his own resume included a stint as a community organizer. White House budget director Jacob Lew said in a New York Times op-ed Sunday that Obama would propose cleaving block-grant allocations to $350 million from $700 million.

"These are grassroots groups working in poor communities, dedicated to empowering those living there and helping them with some of life's basic necessities," Lew wrote. "These are the kinds of programs that President Obama worked with when he was a community organizer, so this cut is not easy for him."

David Bradley, director of the National Community Action Foundation, that works with Congress and local governments on behalf of programs for low-income people, said he was surprised that the president, a former community organizer, would go after programs that represent such a tiny part of the massive federal budget.

"The question is why? Why pick on this program? It makes a statement, particularly when you're able to say, 'Here's a program I really care about,'" Bradley said. "Once the Obama administration throws a poverty program in the water, it starts a feeding frenzy."

Bradley said the the White House has thrown chum into the waters swirling around the budget-cut debate. He said the Obama administration's move simply emboldened Republicans to propose even deeper cuts to the same programs.

In the wake of the White House proposal, Republicans said yesterday that they would seek $405 million in cuts to community service block grants as part of their proposed continuing resolution, a stopgap budget measure that would fund the federal government for the rest of the year.

Even before word of the block grant and LIHEAP cuts, the National Law Center on Homelessness and Poverty worried that the White House will abandon a waning homeless prevention program created by the stimulus bill.

The White House has also stepped on other programs for poor folks. In August, it pushed Congress to pass a child-nutrition bill -- a priority of the First Lady's -- that was paid for in part with cuts to future funding for the Supplemental Nutrition Assistance Program, better known as "food stamps."

At the time, the Food Research and Action Center, a national anti-hunger organization that lobbies on behalf of food stamps and other programs, estimated that a family of four will receive $59 less per month starting in November 2013 as a result of the $2.2-billion cut, which came on the heels of another $11.9-billion cut to food stamps that was folded into a state-aid bill.

More than 100 House Democrats protested and promised to block the child nutrition bill because of the cuts, but the White House persuaded them to fall in line.

With mounting evidence that the White House is willing to sacrifice low-income assistance as it jockeys for position in budget and election battles, it may be hard this time around to convince congressional Democrats to support the proposed block grant or LIHEAP cuts. The 11 Democratic members of Congress from Massachusetts sent Obama a letter on Monday opposing cuts to the block grants.

And one prominent Democrat has already voiced his displeasure with the LIHEAP proposal.

"I understand that difficult cuts have to be made," Sen. John Kerry (D-Mass.) wrote in a letter to the White House on Wednesday. "But in the middle of a brutal, even historic, New England winter, home heating assistance is more critical than ever to the health and welfare of millions of Americans, especially senior citizens. I request that the administration preserve LIHEAP funding at least to the Fiscal Year 2010 funding at $5.1 billion when it submits its FY12 budget proposal to Congress."

In Massachusetts, eligible applications to LIHEAP increased 21.1 percent in 2009, and that represents a population of voters likely to be as disgruntled about the White House's proposal as Kerry.