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for Head Start grantees which will promote coordination at the provider level between Head Start and the JOBS program.
You are proposing total elimination of the remaining $1.1 billion 1992 appropriation for State Legalization Impact Assistance Grants (SLIAG). Part of the rationale for this is that, as of the end of 1990, States still had not drawn down over a billion dollars of funds granted in fiscal years 1988, 1989, and 1990. In addition, the $271 million appropriated in FY 1991 will soon be granted to the States, raising total availability to $1.3 billion.
Question. Will this unspent money be enough to pay all legitimate billings expected to be submitted by States in fiscal 1992?
Answer. We estimate that if funds were available States could draw down $2.5 billion. Funds available currently amount to $2.4 billion. Twenty eight States will have been allotted funds that amount to approximately $174 million in excess of their projected costs, because of earlier overestimates by the States of costs used in the allocation formula. As a result, the other States will not have as much money to cover costs as they should. Taking into account these under- and overestimates, 90 percent of all legitimate billings could be paid without the necessity of appropriating additional funds in FY 1992. Were funds to be reallocated, 96 percent of all legitimate billings could be paid. At present, however, HHS does not have clear authority to reallot funds already granted to States.
Your budget justification states that the number of aliens on whose behalf States can claim costs will start dropping rapidly beginning in FY 1992.
Question. How many fewer legalized aliens will still be eligible for services in FY 1992 compared to the previous four years of this program?
Answer. Estimates developed by the Department of Health and Human Services indicate that during FYs 1989 and 1990 there were approximately 2.8 million eligible aliens and that this number will remain approximately the same through FY 1991. During FY 1992, it is estimated that the number of eligible aliens will drop to
2.2 million, a decrease of 21 percent. Beginning in FY 1993, the number of eligible aliens at the end of each quarter is estimated to be as follows:
LIHEAP CONTINGENCY FUND
Last year, this Subcommittee created a new, $200 million Energy Emergency Contingency Fund. It survived conference at $195 million, and the funds were recently distributed to States, since the price of home heating oil exceeded the "trigger", being more than 20 percent above the average of the previous four years.
Question. I am glad to see you are requesting a continuation of this activity, but what is your rationale for only requesting $100 million?
Answer. The lower request for a $100 million contingency fund is part of our overall lower request for LIHEAP funding in FY 1992. In addition to the $100 million in emergency funds, we are asking for a LIHEAP appropriation of $925 million in FY 1992.
The FY 1991 Energy Emergency Contingency Fund, in the amount of $195,180,000, is in addition to the regular appropriation for FY 1991. This fund was established to assist LIHEAP grantees with increases in the costs of home heating oils resulting from the Middle East crisis. These funds were distributed on January 24, 1991, after the cost of home heating oil in December 1990 exceeded the "trigger" price by more than 20 percent above the average cost of the previous four Decembers.
We do not anticipate that states will incur as large an increase in fuel prices next winter. Since the start of Operation Desert Storm in January, heating oil prices have dropped considerably from the levels they were at the end of 1990. We expect that prices will decline further, now that the Middle East conflict is over and the worst of the 1990-1991 winter heating season has passed. In addition, production and supply of home heating fuels have been and are expected to remain high. This would help to avert big price hikes in the event that an unforeseen crisis were to happen, such as severely cold temperatures. We feel that next year's request for $100 million in emergency contingency funds is sufficient to assist our grantees should unanticipated circumstances occur, and allows the Federal government to play its appropriate role: providing benefits only in circumstancies of exceptional need.
Question. How have the States used these funds? For crisis assistance or to bolster regular program operations?
Answer. We currently do not have information from the states on how they are using their shares of the emergency contingency fund.
States and tribes may use contingency funds for any LIHEAP purpose, except that they may not transfer these funds to another block grant nor may they add the funds to the base on which transfers are calculated. The emergency contingency funds may be used for heating assistance (to assist users of any fuel type), cooling, crisis assistance, weatherization, administrative costs, and carryover, subject to normal LIHEAP restrictions.
LOW INCOME HOME ENERGY ASSISTANCE PROGRAM
In my home State of Iowa, 25,000 fewer people would be served if Congress were to accept the Administration's FY 1992 proposal to cut LIHEAP, the Low-Income Home Energy Assistance Program. Nationwide, 2 million fewer people would be served, even though current funding levels only help 28 percent of the eligible population and the portion of the heating bill now covered for eligible recipients has declined from 22 percent in 1981 to 14 percent in 1991.
We continue to hear testimony and see evidence that this program plays a vital role. But, year after year the Administration proposes to freeze, cut, or eliminate the program.
Question. Why does the Administration oppose this program?
Answer. The President's budget requests over $1 billion for LIHEAP in FY 1992. The FY 1992 budget includes a request for $925 million for LIHEAP, plus a $100 million contingency fund to be released if heating oil prices are more than 20 percent above historical levels. The President's budget takes into account that for those households served by LIHEAP, their net home heating burden was 0.7 percent lower on average in FY 1989 than in FY 1981. At the same time, the average home energy burden of low income households declined from 8.0 percent of household income to 5.4 percent of household income, indicating a reduced need for LIHEAP in offsetting home energy costs as a percent of household income.
Tables 1 and 2 below present data on average energy prices expressed in current and constant dollars per million btu's (mmbtu). Energy prices are compared below between 1985, the year of highest federal funding of LIHEAP, and 1989, the most recent year in which annual fuel prices are available.
Table 1. Average price by fuel type and by year, current dollars per mmbtu*
COMPOSITE AVERAGE** 2.19 2.61 3.13 3.44 4.27 *Not adjusted for inflation
**Composite (all fuels) average is weighted based on the amount of each fuel (i.e., electricity, natural gas, and fuel oil) purchased for residential use.
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 5.89 7.19 8.14 8.65 9.39 10.00 10.76 12.43 14.38 15.91 16.65 17.49 18.07 18.07 18.04 18.07 18.43 1.29 1.43 1.71 1.98 2.35 2.56 2.98 3.68 4.29 5.17 6.06 6.12 6.12 5.83 5.54 5.47 5.63 3.53 5.08 7.02 8.61 8.36 7.77 7.87 7.59 6.03 5.79 5.86
1.64 2.18 2.72 2.93 3.32
Table 2. Average price by fuel type and by year, constant dollars per mmbtu*
4.58 5.25 6.49 7.58 8.57 9.29 9.65 9.80 9.48 9.59 9.56
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
3.60 3.60 3.94 4.31 4.81
COMPOSITE AVERAGE 6.12 6.66 7.22 7.50 8.73 8.71 8.96 9.77 10.34 11.01 11.56 11.52 11.29 10.73 10.46 9.56 9.35 • Adjusted for inflation.
**Composite (all fuels) average is weighted based on the amount of each fuel (i.e., electricity, natural gas, and fuel oil) purchased for residential use.
When viewed in current dollars (table 1), average energy prices decreased or remained about the same since 1985, except for electricity which increased somewhat in 1989. The composite average fuel price rose only slightly from $9.80 in 1985 to $9.82 in 1989.
When viewed in constant dollars (table 2), average energy prices consistently decreased. The composite fuel prices declined 33 from from $11.29 in 1985 to $9.35 in 1989.
The President's budget takes into account that the average home energy burden of low income households declined from 8.0 percent of household income to 5.4 percoent of household income, indicating a reduced need for LIHEAP in offsetting home energy costs as a percent of household income. Therefore, the President's budget request is
consistent with the decline of the average home energy prices after adjusting for inflation.
Question. Isn't it true that even the combined resources of all levels of government and the private sector still fall short of the need for low-income fuel assistance?
Answer. We do not believe that these combined resources fall short of the need for low-income fuel assistance. The flexibility of the block grant enables States to target the most appropriate assistance (heating, cooling, crisis, and/or weatherization) to the households that are most in need. States can adjust their LIHEAP eligibility standards and benefit levels, amounts transferred or carried over, and types of assistance provided, to best meet the needs of their citizens.
In addition, States can add oil overcharge and State funds to LIHEAP. They can reduce or eliminate transfer of LIHEAP funds to other block grants, or transfer funds from 2 other block grants into LIHEAP. State decisions in these areas, reflect their own priorities. In fact, a majority of States continue to transfer funds from LIHEAP to other block grants, implying energy assistance is not as high a priority. In addition, many utility companies provide assistance to their low-income customers, and private fuel funds also provide assistance to those in need.
EMERGENCY SERVICES OF COMMUNITY ACTION AGENCIES:
The biggest program funded by the Community Services Block Grant are the Community Action Agencies. Many Community Action Agencies have been called upon to meet increasing demands for emergency services due to the recession. For example, a plant closing in Cedar Rapids, Iowa about a year ago left 1,400 people without jobs. More than 400 of these people turned to the local Community Action Agencies to help them through this crisis. When the recession hit this already economically depressed part of the State, the impact was particularly severe. Many of these people have not been able to find jobs and now find that their unemployment benefits are running out. They rely on the Community Action Agencies for emergency food, energy and rental assistance--all of which are funded by the Community Services Block Grant. Approximately one-third of the people affected by this crisis who turned to the Community Action Agencies for help were first time clients.
Question. Why is it that this Administration has again failed to recognize that Community Action Agencies are used to provide direct emergency services which are vital to families and individuals in need, particularly helpful during this period of recession?
Answer. Since only 10 percent of all Community Action Agency (CAA) funding comes from the Community Services Block Grant (CSBG) program, discontinuing the funding for the CSBG will not be a serious problem for a majority of the CAAs. CAAS will continue to be able to provide services to the poor under other Federal, State, and local public and private sources, e.g. Women, Infants and Children (WIC), Temporary Emergency Food Assistance Program (TEFAP), food programs administered by the Department of Agriculture, and the Stewart B. McKinney Homeless Assistance Act, as they currently do.
Question. Why don't you propose repealing the authorizing statute, rather than eliminating funding for programs you don't like?
Answer. Last year Congress debated the question of reauthorizing programs under the Community Services Block Grant Act which were to expire at the end of the fiscal year. At that time, we
made our views clear to the appropriate Committees and to the Congress as a whole that we did not support the reauthorization of these programs. Nevertheless, Congress chose to reauthorize the Act through FY 1994. In the meantime, we have a responsibility each year to reflect the priorities of the President and his Administration when the budget is presented to the Congress. For the reasons we have mentioned earlier, with the exception of the National Youth Sports Program, we have not requested funding in FY 1992 for the community services programs administered by FSA.
MONITORING THE JOBS PROGRAM
In FY 1992, the JOBS program will be entering its third year. It is a $1 billion dollar entitlement program, aimed at getting welfare clients into permanent jobs.
Question. Why is it that your budget justification says absolutely nothing about the numbers of persons being served?
Answer. Hard data regarding participation in JOBS is not yet available. We anticipate that States will begin to report on JOBS participation in April, 1991. The JOBS program offers an array of services and component activities which involve different numbers of program participants. In addition, States have a great deal of flexibility in determining what mix of services they provide, and to what groups of recipients they provide them. Therefore, obtaining information about JOBS participation and the number of persons served this early in program implementation has been difficult.
FSA has developed several ways of monitoring the number of persons served in JOBS. FSA is conducting field reviews of State JOBS program operations, which will identify any problem areas related to participation rates. FSA report forms will provide data un the participation rates of each State's JOBS program, including data regarding component, target group/non-target group, program status, and number of months of participation. Report forms will be reviewed and analyzed after receipt in FSA. Additionally, we are currently implementing a sample-based reporting system that will provide data about JOBS participants on an on-going basis. This system is targeted for operation by October 1, 1991.
Question. What are your goals for this program, and how do you plan to measure the State's performance in achieving them?
Answer. FSA's goal for the JOBS program is to establish in each State a statewide JOBS program that provides effective education, employment, and training services, that together with necessary child care and supportive services, will assist welfare recipients to become self-sufficient.
We currently measure State program performance by the standards in the statute. For FY 1991, those measures (which affect a State's eligibility for enhanced federal funding) are: (1) Did the State meet the 7 percent participation rate? and (2) Did the State spend 55 percent of its JOBS expenditures on the target groups established in the law?
The statute requires the Department to recommend performance standards to Congress by October 1, 1993. The Department has contracted with the Manpower Demonstration Research Corporation to do an evaluation of the JOBS program as required by the statute. Studying potential performance measures is a part of that contract. ̧*
Question. What is your reaction to the recent study by Child Trends, which suggests that job training programs may be ineffective in helping the most disadvantaged welfare recipients?