Frozen Out: The Brewing Perfect Storm

Labor Day marks the end of summer and the start of Congress’s fall term, and once again, the issue of increasing funding for the Low Income Home Energy Assistance Program (LIHEAP) is awaiting action. This year, a bill that would have provided $2.5 billion in additional funding for the program stalled in the face of a promised veto from President Bush, who claimed that its passage would increase the deficit.

This stand by President Bush, who the White House predicted in late July would leave a record $482 billion deficit to his successor, should not come as a surprise. After all, those who will be affected by this minute addition to the out-of-control deficit are the 35 million households who are poor enough to meet the stringent eligibility requirements for LIHEAP assistance, not the wealthy whose tax cuts have contributed to the deficit—and the voices of the poor simply do not ring as loudly as the voices of the rich.

Unfortunately, until there are enough reports of deaths from hypothermia, enough stories of those hospitalized because of pneumonia, the plight of those likely to suffer the most from a failure to pass legislation increasing funding for the program will be ignored. And, who are these potential “budget busters”? They are primarily the 39 percent of retirees who rely on their Social Security checks for more than 90 percent of their income.

What is perhaps most troubling is that this is an issue year after year. In September 2005, the same funding fight took place and a similar column appeared here, pointing out that “the Merck Manual of Geriatrics reports that in the USA, about 75,000 ‘excess winter deaths’ occur among the elderly, including deaths from hypothermia and deaths associated with many other winter risks, such as influenza and pneumonia. Among identified cases of hypothermia, the mortality rate is 50%. Of persons with hypothermia, those over 75 years are five times more likely to die than those under 75 years.”

This year, however, the need for additional funding for LIHEAP is more critical than ever. Everyone is aware of the rising costs of fuel, as evidenced in prices at the gas pump, but another aspect of that troubling problem is that the price of heating oil and natural gas, according to the Center on Budget and Policy Priorities, is expected to rise some 40 percent over last year’s costs, and 90 percent over the cost four years ago. 

What makes the situation more worrisome this year is a number of other changes that have taken place as a result of our troubled national economy, changes that could result in a perfect storm of suffering:

• The rise in the number of eligibles. As the job losses in our country increase, more people will be eligible for assistance from LIHEAP, but the program, according to AARP, was able to serve only “16% of households eligible for assistance in FY2006." At the same time, the “average federal grant has dropped nearly 20% from $464 to $378 since FY06.” Moreover, according to a July 2008 news release by the Bureau of Labor Statistics, “The national unemployment rate was 5.7 percent in July, seasonally adjusted, up from 5.5 percent in the prior month and up from 4.6 percent a year earlier.” Taken together, it is clear that the number of people turned away will increase sharply this year.
• The increase in consumer prices, especially food.  The Bureau of Labor Statistics also recently reported that “the food and beverages index rose 0.9 percent in July. The index for food at home increased 1.2 percent, following a 1.0 percent rise in June. Five of the six major grocery store food group indexes increased at least 1.0 percent in July.  The index for cereal and bakery products increased 1.8 percent in July and is 12.1 percent higher than in July 2007, while the fruits and vegetables index rose 1.2 percent in July and is 10.1 percent higher than a year ago.” This will leave many seniors in the position of choosing between food and fuel, not to mention medications, already a problem that has many seniors not filling all their needed prescriptions.
• The drop in interest rates. Lower-income citizens who have some small savings in addition to Social Security have been hard hit by the steep reductions in interest rates on savings and CDs over the past two years. If these people are among the reported “35 percent of U.S. heads of households [who] have never had a pension plan,” the fall in interest rates from about 5 percent to 2.5 percent in this period has left them in an untenable position.
• The cut-backs in services that traditionally serve seniors. For example, NPR reports that “recruiting new drivers for the Meals on Wheels program, which relies on volunteers to drive their own cars and pay for their own gas, has stalled. As a result, 2,000 Meals on Wheels programs across the country have had to put people on waitlists. Denver Meals on Wheels currently has 200 people on their list.” In addition, many senior centers are having a harder time providing meals, and food pantries are reporting that they already are turning away people as their shelves empty faster than ever before.

To prevent the suffering, and deaths, of countless frail seniors, it is imperative that Congress either pass a separate bill or attach substantial LIHEAP supplemental funding to the additional 2008 stimulus bill that has been discussed. Without such action, the perfect storm will take place.