On the White House Af-Am call, I asked about LIHEAP, and was told it was one of the “difficult” but necessary cost savings the president was proposing. On the call, Rouse explained that LIHEAP had seen its funding essentially doubled in the president’s first two years due to spiking energy prices. Now that prices have leveled out, the White House has decided to return funding to pre-spike levels. However, Rouse said “rest assured, if energy prices spike again, the White House is prepared to bring funding levels back up.” In a follow-up email after the call, a White House spokesman explained that LIHEAP is in fact a block grant, meaning money transfered to the states and administered by them. And because the money is paid directly to utilities, not customers, with energy prices down but the funding still at spike levels, it has essentially served as a federal subsidy to those energy companies.
Unemployment projections will be high for 2011. The Office of Management and Budget paints a far rosier picture of deficit reduction than OMB director Jack Lew.
Reid writes that the Center on Budget and Policy Priorities gave Obama's buget good reviews. I don't believe that Reid read Robert Greenstein, CBPP Executive Director's statement on the budget.
The President’s budget, however, does not go nearly far enough to keep the debt stabilized in later decades, which the Administration acknowledges. The President and Congress will need to take much bigger steps — on both spending and taxes — to meet those challenges. The budget signals the Administration’s interest in bipartisan discussions on these issues, explicitly calling, for example, for bipartisan talks on Social Security and laying out the Administration’s principles for such negotiations.
Greenstein notes that the White House is wrong on on cuts to LIHEAP funding are practical because heating prices will drop.
One exception is the deep cut in LIHEAP. The President proposes to return LIHEAP to its 2008 funding level on the grounds that home energy prices are much lower now than when Congress substantially increased LIHEAP funding in response to a rise in those prices. But, the Energy Department’s own price forecasts indicate that home energy prices in the winter of 2012 will be back to their levels in the winter of 2008 and higher than in any year since then as well as in the years before 2008. The price of home heating oil is projected to be almost twice its 2000-2007 average; residential electricity almost 30 percent higher, and residential natural gas over 10 percent higher. While these prices will still be lower than at the peak of the price spike that occurred after the winter of 2008, the number of low-income Americans is much higher now— the number of people living in poverty is expected to be about 15 percent greater in 2012 than it was in 2008.
In fairness, Greenstein has good things to say about the budget proposal. Greenstein notes that the current Washington political climate is "toxic." Obama won't get everything he wants but no one expects the President to put up a fight.
Obama's budget calls for letting the Bush tax cuts expire in 2012. Does anyone see Obama doing that in an election year. The 2012 economy isn't going to be Clinton's 1998 economy. Things are likely to still be bad.
It amazes me the best defense Obama progressives have is "less horrible than advertised." Imagine that as a 2012 campaign bumper sticker.
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