The Free Press, Mankato, MN

April 25, 2013

My View: Obama budget hits the poor

By Jim Gehrke

— President Obama's budget proposal released last week slashes funding for two vital poverty-fighting programs and leaves a third virtually unfunded.

Meanwhile, record numbers of Americans continue to live in poverty, including a shocking number of people in south central Minnesota. Nearly one in five Blue Earth County residents have incomes below the federal poverty line (about $23,500 for a family of four), according to the U.S. Census Bureau. Across our nine-county region, one out of every eight people lives in poverty.

The president's proposal continues a disheartening trend of government turning its back on struggling families. In 2000, Minnesota Valley Action Council -- a community action agency serving low-income families in south central Minnesota -- received $793 in federal and state funding for every person living in poverty in its service area. This year, that number is expected to dwindle to $525 per person, a 34 percent reduction.

President Obama's budget literally hits low-income people right where they live. He proposes another in a series of cuts to the Low Income Home Energy Assistance Program (LIHEAP), which helps struggling families keep their heat on during the winter. This proposed reduction comes at a time when more than half of U.S. households devote more than 20 percent of their family budget to energy costs, nearly double what it was just 10 years ago.

Nationally, about 40 percent of LIHEAP recipients are senior citizens, and 20 percent are veterans.

And while the president calls for a minor increase in funding for the weatherization program, his allocation represents a 94 percent cut from peak funding.

It's important to note that while programs like LIHEAP and weatherization directly benefit low-income families, they also benefit people all across the economic spectrum. Less funding for LIHEAP means more families out in the cold, but it also means less money circulating in the local economy and higher energy rates for everyone. MVAC works directly with about 30 electric co-ops and municipal utilities. As delinquent and uncollectible accounts increase, they'll have little recourse but to raise rates to recover losses.

Cuts to weatherization are also widely felt. Weatherization improves the energy efficiency of homes occupied by low-income families, resulting in an immediate 30 percent reduction in energy bills. But it does more than provide a more sustainable path for families struggling to get by. In the past, it created and preserved local jobs and pumped millions of dollars into local businesses.

MVAC spent $4 million with local businesses while weatherizing 798 homes in 2011, when Weatherization was at peak funding. Under the president's proposal, MVAC would only be able to weatherize about 130 homes.

Finally, the president's budget also halves funding for the Community Services Block Grant, which supplies the only trickle of federal money for anti-poverty efforts that is under local control. At MVAC, CSBG funds are used to support all of our activities, from homelessness prevention to youth employment, from dislocated worker programs to Head Start.

These proposed cuts are precisely the wrong approach to take in the wake of the worst economic downtown in nearly a century. Nearly 9 million Americans slid from the middle class into poverty between 2007 and 2010, bringing the total to more than 46 million people. That number has not decreased, according to the U.S. Census Bureau, so why should funding?

In southern Minnesota, the poverty rate has been growing steadily since 2000, when there were about 16,000 people living in poverty in our nine counties. That number had grown to more than 21,000 by the onset of the Great Recession, and stands at 28,000 today.

With so many people struggling to get by, including millions impoverished during the Great Recession, this continued trend of underfunding poverty-fighting programs is a recipe for prolonged misery.

 

Jim Gehrke is the awareness coordinator at Minnesota Valley Action Council, a community action agency that serves the nine counties of south central Minnesota.