Energy Secretary Steven Chu spoke to a Christian Science Monitor event yesterday and was asked why the Obama Administration was willing to propose/accept major cuts in LIHEAP, the Low Income Home Energy Assistant Program, for fiscal year 2012. His response suggests the Administration does not have a principled or coherent answer.

The CSM story with video is here. Sam Stein at HuffPo captures part of the contradiction in Adminstration policy but doesn’t discuss the more blatant absurdity of Chu’s respsonse: [my bold]

. . . Chu acknowledged that the administration had made “very, very hard decisions” in proposing to decrease funding for the Low Income Home Energy Assistance Program by $2.5 billion in its 2012 budget. But while President Barack Obama argued in February that lower commodity prices meant less aid was necessary, a subsequent spike has led the administration to reassess its approach to justifying the new funding levels.

On Friday, Chu argued that the administration was pursuing alternate, broader reforms to help stabilize energy prices for households.

Sorry, but what follows from Chu is all total nonsense. LIHEAP is a program for providing block grants to states (you know, flexible things Republicans like when the Feds try to dictate programs) to help people lower their energy bills.

One of the main features is direct payments to low-income people to pay for heating oil and/or utility bills when energy prices are particularly high and/or weather is severe. It’s to keep low-income people from having to choose between freezing to death and starving to death. From the Health and Human Services, Children and Families, LIHEAP web site: (my bold)

Contingency Funds: The President may release these funds to assist with the home energy needs arising from an emergency situation. They may be allocated to one or more grantees, or to all grantees, based on criteria appropriate to the nature of the emergency. In the past, the President generally has released these funds in response to emergency situations arising from extreme weather conditions or energy price increases. Generally, funds have been distributed based on the degree to which specific States are affected by the weather or energy price situation that led to the release of contingency funds.

As the CSM reporter noted in his question, the Administration claimed fuel prices were down last year, so let’s cut funding for next year. Except we just had a very severe winter and oil-related prices have spiked. That means people who rely on types of fuel oil for heating are hurting and could again next winter. So the Administration rationale didn’t make sense then, and doesn’t make sense now.

But it gets worse. As Stein’s HuffPo article notes, Secretary Chu then talked about a different rationale — in a time of austerity, Chu tells us in the video, the federal government needs to cut the funding, but it also wants to expand the leverage of federal dollars while extending weatherization assistance to middle-income people. Uh, no, Mr. Secretary. In a severe recession, the federal governement should be expanding safety net programs, not contracting them.

Now there’s nothing wrong with using federal dollars to leverage local and personal investments in weatherization of existing homes and rental units. The California Energy Commission started pushing that, uh, about 30 years ago. Welcome aboard, Mr. Secretary. But what has this to do with keeping poor people from freezing or starving next winter? Nada, zilch. Zero.

In case the Administration has forgotten, there are still 14 million people unemployed and another 10 million underemployed. We have record poverty in the US and worse income maldistribution than Egypt. Poor people aren’t borrowing money from friendly Bank of America to make weatherization retrofits in their (likely) badly maintained rental units, and neither are their landlords, because, you know, landlords don’t pay the utility bills and renters don’t get the benefits of retrofits they paid for after they leave.

We’ve understood this market failure problem for decades. So I don’t know what Chu thinks the feds are leveraging that will help matters soon. And utility bills are about electricity and natural gas, not just heating oil in areas, such as the Northeast, that use oil for heating. People who have lost jobs and health insurance need help paying their electricity bills, including their natural gas bills if they have gas heating — and they need it even when natural gas prices are historically low. It’s not just about home heating oil and Libya.

So if the US DOE wants to tackle the broader problem of America spending way too much money on energy because the housing stock leaks energy like a sieve, and many state building codes are negligent about energy, that’s fine. Go get ‘em. I agree it makes sense to do about a gillion cost-effective things on the demand side, including weatherization loans and leveraging federal dollars.

But first they need to make sure people don’t freeze while the Department of Energy relearns 30 years of history and takes however long it takes to set up institutions to handle loans, convinces utilities and state utilities commissions to fund energy audits and retrofits, develops community organizations to help get the word out and assist renters — something like ACORN sounds like a really good idea — and makes sure the weatherization contractors aren’t scam artists and the bank lenders don’t behave like, well, the mortgage lenders at Citi, Wells Fargo and Bank of America.

But the last thing this effort needs is for a Nobel laureate wasting his time fronting for a bunch of White House spin masters trying to tell us the problems the US is facing require fiscal austerity. And he certainly shouldn’t be covering up for a President who can’t admit his policy judgments and rationales are not credible.