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I think all these factors are important in looking at the big picture and considering our request for a rescission.
CAN THE SLIAG BILLS BE COVERED?
Senator HARKIN. Ms. Barnhart, the staff and I were just discussing SLIAG. As you know, it always comes as a problem with those individuals in whose States it has the biggest impact, and I have to be clear on whether or not this will, indeed, in your estimation cover the bills that will be coming in in 1992.
Again, I ask you, do you believe that the unspent money that we have available plus what we appropriated in 1991 will be enough to pay the bills that will come in in 1992?
Mr. Williams, do you have any thoughts on that?
Mr. WILLIAMS. Nothing more than Ms. Barnhart already indicated to you. I thought I heard her say that that was sufficient. Senator HARKIN. I heard her say it might cover most bills. Ms. BARNHART. Most, Mr. Chairman.
Senator HARKIN. What does that mean? Does it mean 51 percent, 71 percent, 91 percent, 99 percent, or 100 percent?
Ms. BARNHART. Mr. Chairman, it is impossible for me to give you an absolute assurance that it would cover all the bills because we really do not know now what States would claim in fiscal year 1992. Based on our best estimate, however, we think it would cover somewhere between 65 and 70 percent of the bills that States would submit.
Senator HARKIN. What would you do with the shortfall?
Ms. BARNHART. I think that many of the programs that the SLIAG individuals participate in at the State and local level they would have been able to participate in and receive benefits from regardless of the passage of the Immigration Reform and Control Act, because most State and local programs do not check citizenship, do not have residency requirements. So they would have been entitled to receive the benefits under those programs with or without the passage of the legislation. I think that is important in taking into consideration the request for fiscal year 1992.
I just received a note from staff. I stand corrected. I was correct in saying it was 65 to 70 percent for the life of the program in terms of reimbursement; 90 percent is the estimate for fiscal year 1992. That is a huge difference.
Senator HARKIN. That sure makes me feel a lot better.
Ms. BARNHART. It makes me feel better, too, Mr. Chairman. [Laughter.]
LIHEAP CONTINGENCY FUND
Senator HARKIN. Ninety percent is much better.
I have one more question, and then I will turn to Senator Gorton. It has to do with LIHEAP. We created this new contingency fund last year of $200 million, and it came through with $195 million out of conference. Funds were recently distributed since that trigger level was reached, which is 20 percent. The price has to be 20 percent above the average of the previous 4 years.
Now you are requesting a continuation of this contingency fund activity, for which I want to thank you. I just want to know the
rationale for only requesting $100 million when we had $195 million last year.
Do I understand all that $195 million went out? All the $195 million went out. So what is the rationale for only $100 million for next year in the contingency fund?
Ms. BARNHART. Mr. Chairman, the reason that we requested $100 million in the contingency fund and not $195 million is actually the same reasoning for requesting a reduction in the LIHEAP Program in general; that is, operating in the current budget environment with a limit on discretionary programs, choices have to be made in the Department of Health and Human Services, as in a number of other departments.
The LIHEAP Program, as you know, has traditionally been a supplemental program. Two-thirds of the people that receive LIHEAP benefits also receive assistance from other public assistance programs like AFDC, food stamps, public or subsidized housing, and so forth. We believe that the request for LIHEAP reflects a socially and fiscally responsible request in terms of helping lowincome households meet their energy costs.
Senator HARKIN. Again, I understand it is part of a mix and that they receive other benefits, but the other benefits are not necessarily increasing all that much next year, either. Unless global warming continues and we do not need the money or if oil prices continue to drop, I am concerned that that may not be enough in that contingency fund for next year.
Ms. BARNHART. I would make one other point, too, Mr. Chairman; that is, we are basically keeping the same rules in terms of release of the contingency dollars that the Congress laid out for this current fiscal year. I see you nodding, so obviously you are familiar with how the contingency operates.
Once the trigger is reached, we actually release all funds so that we have no basis for not releasing all funds in the contingency and the contingency pool. This year we had $195 million, so once we reached the trigger we released all $195 million. Release of funds is not necessarily reflective of a particular demand for all of the $195 million.
That is not to suggest that States cannot use it, because I am sure they can always use whatever funds they are provided, but just that there is no necessary correlation between need and how much of the funds are released, once the trigger is hit. They are all released.
Senator HARKIN. Are you suggesting we might want to look at some kind of sliding scale formula?
Ms. BARNHART. A sliding scale in terms of how severe the increase is?
Senator HARKIN. The use of the trigger, depending upon what percentage over the previous 4 years that different funds might be released, the percentage of funds.
Ms. BARNHART. That certainly would be a possibility. To be honest, I had not actually thought of that. Generally, when we start talking about formulas in the LIHEAP Program we generally provide technical assistance and do not get into making recommendations; but we could certainly have further discussions with your staff about that.
LIHEAP: NUMBER OF PEOPLE SERVED
Senator HARKIN. Let us discuss that further.
Again, just to close out my remarks on LIHEAP, those of us who represent States where we have variable winters where it could be really cold for a period of time or not so cold, we understand that there are other assistance programs available that people get, but right now nationwide under the 1992 proposal that you are submitting, about 2 million fewer people would be served even though the current funding level only helps 23 percent of the eligible population.
The portion of the heating bill now covered for eligible recipients has declined from 22 percent in fiscal year 1981 to 14 percent in fiscal year 1989.
Ms. BARNHART. May I make a few comments, Mr. Chairman?
Ms. BARNHART. With regard to your last point, you are correct that the proportion of heating benefits that LIHEAP covers for that eligible population has declined from 22 percent to 14 percent, but I think it is important to point out that over that same time period the out-of-pocket expenditures for low-income households which receive LIHEAP as a percent of their income has declined.
In fact, the situation is such that even though the proportion of payment that LIHEAP covers has decreased, the burden to the individual households has decreased at a faster rate and, in fact, there is a 0.7 percent net increase in terms of available funds to the household.
Senator HARKIN. Due to what?
Ms. BARNHART. Due to the fact that as a proportion of their family income, their individual burden for paying for home energy has reduced significantly over the last several years.
I could provide precise numbers for the record, but
Senator HARKIN. I wonder why that is. Why is that? Have oil prices declined that much in 10 years?
Ms. BARNHART. Both prices and consumption have been lowered. I think basically people have become increasingly conscious of the fact that conservation and weatherization activities do result in lower energy prices, and prices are down as well, Mr. Chairman. As I say, we could provide the numbers laying out that situation for you for the record.
Senator HARKIN. That might be interesting. You say it is seventenths of 1 percent net?
Ms. BARNHART. Yes; net gain.
Senator HARKIN. When you say net, I assume you have taken inflation into account.
Ms. BARNHART. Yes; I believe we have in terms of actual constant dollars.
Senator HARKIN. I would like to see those figures. [The information follows:]
Tables 1 and 2 below present data on average energy prices expressed in current and constant dollars per 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.
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 from $11.29 in 1985 to $9.35 in 1989. However, for those households served by LIHEAP, their net home heating burden was 0.7 percent lower on average in fiscal year 1989 than in fiscal year 1981. At the same time, the average home energy burden of low income households declined from 8 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.
Therefore, the President's budget request is consistent with the decline of the average home energy prices after adjusting for inflation.
For more information see the Low Income Home Energy Assistance Program-Report to Congress for Fiscal Year 1989.
Electricity Natural gas Fuel oil
TABLE 1.-AVERAGE PRICE BY FUEL TYPE AND BY YEAR'
[Dollars per mmbtu]
5.89 7.19 8.14 1.29
2.19 2.61 3.13
Composite average 2
'In current (nominal) dollars-not adjusted for inflation.
TABLE 2.-INFLATION ADJUSTED AVERAGE PRICE BY FUEL TYPE AND BY YEAR1
[Dollars per mmbtu]
Calendar year 1981
1In constant (real) dollars-not adjusted for inflation.
16.45 18.08 18.76 18.85 19.22 19.01 18.38 19.61 20.44 20.73 20.87 3.60 3.60 3.94 4.31 4.81 4.87 5.09 5.54 5.85 6.64 7.54 7.30 4.59 6.27 6.38 6.79 6.72 8.67 10.57 11.74 10.75 9.68 9.39 7.22 7.50 8.73 8.96 9.77 10.34 11.01 11.56 11.52