Two congressional events held last Wednesday — a news conference supporting more federal funding to help the poor pay their winter energy bills and a Senate hearing on a bill to fight global warming — may at first blush appear completely unrelated. But in reality, the two are at cross purposes, as one seeks to help make energy more affordable while the other would send energy costs through the roof.
The Northeast-Midwest Congressional Coalition held a press conference drawing attention to the need to replenish the federal Low Income Heating and Energy Assistance Program (LIHEAP). Several legislators want to increase the available funds from $1.4 to $1.7 billion dollars.
Though the stated purpose of LIHEAP is laudable — assisting those unable to pay their energy bills so they don’t get their juice shut off in the dead of winter — the reality is less clear. For one thing, utilities in most northern states are forbidden by law from shutting off anyone’s electricity or gas during the cold weather months, so the fears about people freezing are greatly overblown. In truth, LIHEAP’s real beneficiaries are the utilities, who receive these taxpayer dollars for energy bills that would have otherwise gone unpaid, as well as the middlemen who administer the program.
Nonetheless, the message that the poor should not have to suffer because of prohibitively expensive energy is a politically powerful one. Too bad this message seems to get lost when the subject turns to the environment. Indeed, thirty years of environmental regulations have greatly increased the cost of energy — often unnecessarily so.
The latest and by far the largest green attack on affordable energy involves global warming. The hearing by the Senate Commerce, Science and Transportation Committee discussed a new bill from Sens. John McCain (R., Ariz.) and Joe Lieberman (D., Conn.) to restrict the use of fossil fuels believed to contribute to warming the planet. Putting aside the growing scientific doubts about global warming, the costs of this bill would be catastrophic. Roughly similar proposals have been estimated by the Department of Energy to increase energy costs by $77 to $338 billion dollars annually, far more than LIHEAP’s budget. Electric bills could rise by as much as one third.
If the McCain-Lieberman bill is enacted, many more poor — and not so poor — households will be in need of LIHEAP funds. Of course, absent a budget-busting increase in LIHEAP, there won’t be enough money to go around.
LIHEAP remains a popular program, and the $300 million increase will likely be approved. After all, it is good politics to ensure that there is energy for everyone, including the neediest. But if Congress feels obligated to take steps to make energy more affordable and available, it should refrain from other steps that force us far in the opposite direction.
— Ben Lieberman is a senior policy analyst with the Competitive Enterprise Institute.