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funded for fiscal year 1992. What we are specifically asking for is current services. I was very pleased to see Cindy Datig here today. She runs the fuel fund in the greater Pittsburgh area. We join her. We have come in with a slightly higher number of at least $1.7 billion for current services, but we concur that current services is the key.
Indeed, the AGA is joined on this request by the LIHEAP coalition, an organization that is made up of consumer public interests and energy vendor interests working on behalf of low-income consumers, and the United Distribution Companies, an organization of Middle Atlantic and Northeastern utilities in which my company is also a member.
All of the organizations that work on behalf of LIHEAP and lowincome consumers perceive the need for the Low Income Home Energy Assistance Program is quite extensive and growing. My written statement gets into information defining that need in some detail.
Looking at my own company, though, I can tell you that 30,000 customers on the peoples gas system, about 10 percent of our total consuming public, are LIHEAP recipients. That number is down about 12 percent from 1986. It is not down because needs have changed. It is down because available dollars to serve that need have declined, and the State in implementing the program has had to tighten qualifications.
A benefit provided by the State of Pennsylvania through the LIHEAP whether is $212. That amount annually represents only about one-quarter of what the average household who cannot afford to pay their energy bills incurs over the same period of time.
Just to give you a sense of how this holds up against energy rates, over the same period of time our rates have only gone up 2 percent. Really the need is not a function of the increase in cost of energy. It is actually a reflection of the financial demands on those families and, indeed, the additional burdens that they have had to bear over the past 5 or 6 years.
My company is not standing still, however, after recognizing the need. We put a lot of our own money and a lot of our own human resources on the line in support of these low income consumers. Indeed, we have weatherization programs that we fund, furnace replacement programs that we fund. We provide special thermostats to the visually impaired to assist them in more efficient use of energy. We have a usage reduction program that we are involved with. We do budget counseling for low income consumers, home visit programs, and gatekeeper programs where our own staff look out for particularly elder customers' needs and assist in referrals.
Clearly, we are committed to assisting low income consumers, but obviously LIHEAP is the critical element here. What we do can supplement the fund, but definitely not supplant. So, we appreciate your continuing support in funding this program.
Thank you very much.
[The statement follows:]
STATEMENT OF KEITH G. DORMAN
Mr. Chairman and members of the Subcommittee: I am Keith G. Dorman, of Peoples Natural Gas Company of Pittsburgh. Peoples is a distribution subsidiary of the Consolidated Natural Gas Company (CNG), an integrated company that produces, transports and distributes natural gas. CNG distribution subsidiaries serve nearly 1.7 million consumers in the states of Ohio, Pennsylvania, Virginia and West Vir ginia. A.G.A. is a national trade association comprising some 250 natural gas distribution and transmission companies. Natural gas is the home heating fuel for over 49 million households in the United States. On A.G.A.'s behalf, I am pleased to have this opportunity to appear before the Subcommittee in support of the Low-Income Home Energy Assistance Program (LIHEAP).
A.G.A. member companies are deeply committed to meeting the energy needs of all of our consumers, including those who are on low or fixed incomes. A.G.A. has long supported federal energy assistance programs such as the Department of Health and Human Services (HHS) LIHEAP and the Department of Energy's weatherization program. In addition to supporting federal funding efforts, A.G.A.'s member companies have contributed significantly to low-income energy assistance at the local level.
The natural gas industry urges this Subcommittee to fund LIHEAP at a level of no less than $1.7 billion for fiscal year 1992. This figure represents "current services"-the fiscal year 1991 allocation of $1.6 billion plus inflation. Further, A.G.A. opposes the fiscal year 1992 Administration request of $925 million, which represents a 42 percent cut over the appropriation for the current year.
A.G.A. supports a LIHEAP program that is adequately funded. Most studies on the low-income energy problem indicate that past LIHEAP funding levels, including the highest annual appropriations of $2.1 billion in fiscal year 1985 and $2 billion in fiscal year 1986, have fallen significantly short of the need for fuel assistance. An estimated 24 million households in this country need some help paying utility bills. Presently, only a small portion of these consumers' total energy costs are cov ered by LIHEAP. In its 1989 report, the National Consumer Law Center indicated that for 1988, LIHEAP funds covered less than 20 percent of the energy costs for eligible households. Moreover, according to statistics provided by HHS, only from 23 to 34 percent of all eligible households received LIHEAP funds in fiscal year 1988. Even in its peak year, LIHEAP reached only about one-third of these households, between five and six million. The average LIHEAP benefit is about $194 a year, versus about $1,000 in energy costs. Ideally, LIHEAP funding should be sufficient to ensure that low-income families have a reasonable opportunity to meet their energy bills.
LIHEAP FUNDING CUTS AFFECT ALL ENERGY CONSUMERS
The lack of adequate funding will affect all ratepayers, because adequate funding of LIHEAP plays an important role in keeping bills somewhat reasonable for all consumers. Many low-income consumers who do not receive energy assistance, in many cases simply cannot, and do not pay their utility bills. Mandated and voluntary moratoria on utility service terminations prevent disconnection of low-income households in winter months. Utilities attempt to work out manageable payment plans for these consumers. However, if not successful, the customer gets further and further behind and the cost of providing gas service without payment is ultimately considered part of a utility's cost of service. This becomes a burden that is borne by all utility consumers.
There is another class of consumer whose plight is made worse by reduced federal funding—the_millions of consumers who are on the fringe of LIHEAP eligibility. Often referred to as the "working poor", they are currently able to meet their energy costs without LIHEAP. However, an increase in energy costs or an increase in fuel usage due to cold weather could place these households in the same inability to pay situation that faces LIHEAP-recipient households today. Further, reduced LIHEAP funding forces many states to tighten eligibility requirements, precluding many of these same households from even applying for LIHEAP grants when they are needed most.
STABLE FUEL PRICES DO NOT REDUCE THE NEED FOR ADEQUATE LIHEAP FUNDING
To millions of low-income consumers, LIHEAP is a badly needed safety net. While fuel prices have stabilized, LIHEAP recipients still spend an unduly large portion of family income for energy. Studies have repeatedly shown that low-income families
pay a much greater share of their incomes for energy costs than do other families. According to the most recent HHS Report to Congress on LIHEAP (covering the years through 1989), households with incomes below 125 percent of the poverty level spend approximately four times more (13.7 percent of income) for energy than all American households combined (3.4 percent of income).
In addition, part of the fuel price stability is due to lower fuel consumption, which directly correlates with the relatively mild winters we have experienced during the past three heating seasons. Congress should recognize that a return to normal or below normal weather next year would lead to increased fuel consumption which, in turn, would cause an increase in the percent of income devoted to home heating. Finally, the recent events in the Middle East exemplify the volatility of fuel prices and the impact international events affecting energy markets can have on low-income consumers in the United States.
SUPPLIES FROM OIL OVERCHARGE FUNDS ARE ONLY TEMPORARY
Proponents of further cuts in LIHEAP argue that funding from other sources, such as the so-called oil overcharge funds, are available as supplemental funds to fill the gap. Congress should note that the impact of oil overcharge funds resulting from court decisions in U.S. v. Exxon and Stripper Well are virtually gone. Further, these moneys supplement rather than supplant fuel aid programs. A February 1989 Report by the National Consumer Law Center estimates that 95 percent of all overcharge funds that were available nationwide have now been allocated by the states for a variety of uses. A total of $2.9 billion oil overcharge funds were allocated between 1986 and January, 1989. Of this amount, LIHEAP received only $590 million. During that same time period, LIHEAP saw a cumulative cut in federal appropriations of $1.652 billion. Therefore, the existence of oil overcharge funds should have no bearing on the amount Congress appropriates for LIHEAP.
EXISTING UTILITY PROGRAMS CAN ONLY SUPPLEMENT LIHEAP FUNDING
The burden of the low-income consumers' needs does not have to rest solely on the shoulders of the federal government. The states and the private sector also have a responsibility to contribute to the needs of these consumers, with the private sector already providing significant funds and related services. A.G.A. member companies have developed innovative and effective programs in this area, putting company money and human resources to work. Examples of this include hiring outreach workers to bring together all the available resources in the community, developing budget counseling programs, and instituting a variety of crisis activities. The experience of Peoples Gas is outlined in my oral presentation.
Since the late 1970's, many A.G.A. member companies have created and helped finance private fuel fund programs and weatherization projects in an effort to supplement LIHEAP and other federal programs. A recent survey sponsored jointly by A.G.A., the National Fuel Funds Network and the Edison Electric Institute provides a statistical portrait of the utility fuel fund programs of 121 respondents. The study clearly establishes that utility fuel funds are providing some measure of support for low-income households. In fact, the respondents reported that, since inception of utility fuel fund programs, they have distributed approximately $131.42 million to approximately 857,527 households. (Because many funds permit a household to receive benefits more than once annually, the number of households data could actually double count recipients.) In the 1987 reporting year, the respondents distributed $31.02 million to 193,081 households, with grants averaging $160.68 per household, and the average fund distributing $274,551. Of course, programs like the Dollar Energy Fund in western Pennsylvania and other utility fuel funds cannot do the whole job. Indeed, although they represent generous private sector support, utility fuel funds do not even begin to approach the support needed at the federal level through LIHEAP.
Despite the efforts of A.G.A. member companies' fuel fund programs and other financial support from the private sector, the need for adequate federal funding of LIHEAP remains imperative.
During reauthorization hearings last year we requested a series of statutory changes to allow more benefit dollars to go to recipients. A.G.A. is pleased that some of these requests were adopted. Changing the appropriations cycle to begin in July rather than October will provide for funds to be available prior to the traditional start of the heating season. Moreover, eliminating the transfer authority by 1994 and reducing the current carryover level from 15 percent to 10 percent, will help
to meet the needs of low-income households and the state monetary requirements for instituting LIHEAP programs each heating season. While not all of our recommendations were statutorily instituted, we are working closely with HHS in developing the implementing regulations to help stretch the budget dollars that are allocated for LIHEAP.
On behalf of A.G.A. and its member companies, I respectfully urge you and your fellow Senators to support our recommendation to fund LIHEAP at the level of $1.7 billion for fiscal year 1992.
Senator REID. As you note, the administration has requested about a $500,000 cut.
Mr. DORMAN. Yes, sir.
Senator REID. This subcommittee gets letters from about 60 Senators each year opposing any cuts. So, we will see what happens this year.
Mr. DORMAN. I take great comfort in that. Thank you, Senator.
STATEMENT OF LARRY CRECY, EXECUTIVE VICE PRESIDENT, NA-
Senator REID. We would like to hear now from Samuel J. Simmons of the National Caucus and Center on Black Aged. Welcome to the subcommittee.
Mr. CRECY. Just a correction for the record, Mr. Chairman. My name is Larry Crecy. Sam Simmons, our president, was called away, and we in turn notified the committee yesterday that I would be standing in for him.
Senator REID. Please spell your name for the record.
Mr. CRECY. For the record, my name is spelled C-r-e-c-y, first name is Larry, and I am executive vice president for the National Caucus and Center on Black Aged.
Senator REID. Please proceed.
Mr. CRECY. Also, I would like for the record to provide the revised testimony to reflect the change.
Senator REID. Your full statement will be made a part of the record.
Mr. CRECY. Well, Mr. Chairman and members of the subcommittee, the National Caucus and Center on Black Aged appreciates the opportunity to testify at this hearing on the fiscal year 1992 Labor, HHS Appropriations Act.
First and foremost, our No. 1 concern is the rejection of the illconceived proposal by the administration to slash $47.5 million from the title V senior community service employment program. This would be a reduction in over 7,800 part-time positions that serve low-income, older workers who offer job opportunities in community service. Particularly we think that it is ill-conceived at a point in time when unemployment is on the rise and it is difficult enough for older workers, particularly low-skill, low-educated older workers, to find employment opportunities when the economy is viable. At this point in time all the indicators are, particularly in the rural sectors where a good proportion of our programs are focused, are having a hard time in continuing employment trends.
Aside from the bad timing as it relates to unemployment, also a lot of services that are in crises right now, child care centers, Head Start programs, in-home services, health services for the elderly,
and Meals on Wheels program, depend very heavily on these title V positions. NCBA strongly believes that it is not simply enough to reject the administration's proposal, but we are calling for an additional $15 million in funding to achieve the objectives of title V. As you know, in the last year we took a pretty hefty cut from the proposed $400 million down to $390 million currently.
The $15 million proposed is below the inflation rate. It is about a 3.75-percent increase. We are asking for this increase first to restore the number of title V positions that were previously cut because of the minimum wage hike, Federal minimum wage increase. And second, it will give us a hedge against inflation as we move into the coming year.
The other activity that we would like to comment on is the title IV training and research discretionary grants under the Older Americans Act. NCBA urges that the Congress increase the current level of funding for title IV from $26.9 million to $28.5 million. This modest increase will allow the Commission on Aging, Dr. Joyce Berry, to launch some of her new initiatives to improve the quality of life for older Americans. Particular interests would be projects that would promote increased minority participation and projects to fund gerontological activities at historically black colleges and universities.
I have kept my comments brief because I understand the committee has a number of witnesses and it has been a long day. And all of those witnesses preceding us have truly exemplified need in this country.
But we ask the committee to take into consideration that the title V program which is crucial to a number of Older Americans Act programs, your Meals on Wheels programs, your nutrition sites, your in-home health care services programs, your Head Start programs, are all being hard hit by budget cuts, and slashing 7,800 positions from title V that augment a lot of the service these title V enrollees augment a lot of those services by these various agencies, not just the elderly community, but the community in general and the youth of this country, child care programs in particular, as you know are in a crisis in this country. A number of title V enrollees are working in those sites. Slicing 7,800 positions at this time is ill-conceived and almost mean-spirited, sir.
Senator REID. Thank you very much for your testimony. It was very clear and precise.
Mr. CRECY. Thank you.
STATEMENT OF LARRY CRECY
Mr. Chairman and Members of the Subcommittee, the National Caucus and Center on Black Aged (NCBA) appreciates the opportunity to testify at this hearing on the fiscal year 1992 Labor-HHS-Education Appropriations Act. As you have requested, we shall limit our oral testimony to three minutes.
SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM
Our number one recommendation is to reject the Administration's ill conceived proposal to slash more than $47.5 million from the Title V Senior Community Service Employment Program (SCSEP), from $390.360 million for fiscal year 1991 to