Budget Plan Seeks Major Cuts at DOE, EPA, With No ARPA-E, Energy Star, LIHEAP Programs

Following through on promises to reduce the role of federal government, President Donald Trump on March 16 released a budget plan for fiscal year 2018 that entails a 31% cut in the budget for the Environmental Protection Agency (EPA) and smaller but significant cuts at the Department of Energy (DOE), Health and Human Services (HHS) and other departments.

The proposed cuts at energy-related programs include the elimination of the Low-Income Energy Assistance Program (LIHEAP) at HHS, the Energy Star program and regional environmental programs at EPA, the Advanced Research Projects Agency-Energy (ARPA-E), Weatherization Assistance Program and other efforts at DOE.

At most agencies with energy research and development (R&D) efforts, the budget proposal seeks meaningful reductions in R&D funding, with reasoning that the private sector is better positioned to fund R&D to commercialize new technologies.

Early reactions to the document by lawmakers and others in Washington were critical and included assertions that it will not go over well on Capitol Hill. Several Democrats in Congress said they will ensure that the harsh cuts will not get approved, lambasting the Trump administration for proposing to spend $1.5 billion on a wall at the Mexico border while eliminating programs that aid the most vulnerable Americans.

“I don’t see this having the necessary congressional support,” said Tyson Slocum, energy program director for consumer group Public Citizen. “This is a cruel budget. It’s like declaring war on America’s poor,” with plans to eliminate LIHEAP and other successful programs that have bipartisan support in Congress, he said.

The budget blueprint document from the Office of Management and Budget (OMB) is a high-level outline without a lot of specifics for each government department and agency. In a briefing with reporters ahead of its release, OMB Director Mick Mulvaney said additional details and a complete budget document would be released later.

The DOE press office confirmed that, indicating that final FY 2018 budget numbers will become available in May. “The budget will then be sent to Congress for review and debate, at which time we will be able to provide more details,” the DOE press office said March 16.

DOE’s FY 2018 budget would be set at $28 billion, or $1.7 billion below the FY 2017 level authorized under the continuing resolution (CR) from Congress. That represents a 5.6% cut from the current level of funding under the CR. It supports the Office of Electricity Delivery and Energy Reliability’s capacity to carry out cybersecurity and grid resiliency activities to protect power grid infrastructure, but the document does not include funding levels for that effort.

The proposal includes a $1.4 billion increase for the National Nuclear Security Administration (NNSA) within DOE to support DOE’s role in maintaining and protecting nuclear weapons and the environmental management program at NNSA.

In a move gaining a strong reaction from lawmakers, it also includes $120 million to restart licensing activities for the Yucca Mountain nuclear waste repository in Nevada and begin an interim nuclear waste storage program. Yucca Mountain activities were halted by the administration of former President Barack Obama under an agreement when former Senator Harry Reid (D-Nev.) was the Senate Majority Leader.

Even without Reid leading the Senate, that proposal may see a tough fight in Congress, as both Nevada senators criticized the proposal to restart licensing at Yucca Mountain. “Yucca is dead and this reckless proposal will not revive it,” said Sen. Dean Heller (R-Nev.). Sen. Catherine Cortez Masto (D-Nev.) had a similar statement about Yucca Mountain that also blasted Trump’s proposed cuts to EPA and other agencies.

“Despite what President Trump may think, Congress has final say on our national budget and Senate Democrats are going to ensure that his egregious proposals go nowhere,” Cortez Masto said.

The budget proposal says DOE R&E efforts among various offices will focus on limited, early-stage activities where the federal role is stronger, with an increased reliance on private sector funding for later-stage R&D. “It emphasizes energy technologies best positioned to enable American energy independence and domestic job growth in the near to mid term.”

The reduced funding and elimination of the Weatherization Assistance Program, which improves the energy efficiency among low-income housing facilities, and other programs is expected to produce a savings of about $2 billion from the 2017 CR level.

The proposal does not provide specifics on the fate of DOE laboratories, but says the DOE Office of Science would have a funding level $900 million below the 2017 CR level, which will include basic R&D activities and operation and maintenance of existing scientific facilities.

In a prepared statement, DOE Secretary Rick Perry said the budget is designed to properly align DOE resources with the missions of the department, “while meeting the fiduciary duty we owe the American taxpayer.” DOE’s “mission over the last 40 years will look very different for the next 40 years as we continue to innovate” and utilize DOE laboratories for scientific and national security improvements.

Unlike previous administrations where most Cabinet members met with reporters to address questions on a proposed budget, the Trump administration held a briefing by Mulvaney but did not make the heads of EPA, DOE or other agencies available before or after the document was released.

The budget plan, with increased spending of $54 billion at the Defense Department offset by $54 billion in savings and cuts in other federal programs, represents an “America first” budget that will not add to the federal deficit, Mulvaney said.

The reduction in non-defense programs would allow the federal government to do more with less and make the government “lean and accountable to the people,” Trump said in a statement within the document. Trump’s statement, labeled as a message to Congress, says the cuts to federal agencies and departments “are sensible and rational,” and that he looks forward to engaging Congress on enacting the budget.

The LIHEAP program, which provides federal funding to aid low-income households in paying their utility bills, has often seen political fights over its funding level. The program has support on Capitol Hill, particularly in states with cold winters where heating bills are a significant portion of a household’s income.

In a March 10 letter to Senate Budget Committee leaders, Sen. Patrick Leahy (D-Vt.) noted that funding for LIHEAP has decreased more than $1.5 billion following budget challenges dating back to about 2011. The program helps roughly 6 million households pay utility bills and 70% of those served have a family member who is disabled, elderly, or a young child, Leahy said, urging senators to avoid drastic cuts in such programs.

The budget proposal for HHS aims to eliminate LIHEAP altogether, along with Community Services Block Grants, to produce a savings of $4.2 billion from the 2017 CR level.

“Compared to other income support programs that serve similar populations, LIHEAP is a lower-impact program and is unable to demonstrate strong performance outcomes,” according to the budget blueprint.

“That is a complete falsehood,” Slocum said. “There is a lot of untruthful comments coming from this administration, but that’s ridiculous,” he said, terming LIHEAP an “incredibly important program” that has the support of utilities and other key constituencies.

The Trump administration has called into question the efficacy of LIHEAP, which is unfortunate because it is one of the most valuable programs for addressing energy poverty and helping low-income households pay utility bills, said Katrina Metzler, executive director of the National Energy & Utility Affordability Coalition (NEUAC).

“I’m not sure what they’ve compared it with, but it’s doing exactly what it was designed to do,” Metzler told The Foster Report.

There were media reports about large budget cuts expected before the document was released, so NEUAC was not surprised to see a lower funding request for LIHEAP from the White House, but Metzler termed it “disheartening” to see the proposal to eliminate the program altogether. NEUAC does not have a large marketing budget, so it faces a constant task to educate lawmakers and advocate for LIHEAP recipients, and that is what the organization is doing right now on Capitol Hill, she said.

The American Gas Association (AGA) is one of the members of NEUAC, and it also will advocate in Congress for funding of LIHEAP, an AGA spokesman said.

He noted that Congress will begin their efforts to fund the federal government and tough choices will be made in the appropriations process. AGA supports the elimination of duplicative and wasteful programs and it will work with policymakers to ensure that the right cuts are made to help agencies like EPA and DOE support their core mission and deliver value to American taxpayers, the AGA spokesman said.

“As this process moves forward, AGA will be looking closely at the program level details of the President’s proposed budget which have yet to be released,” he said.

Those unknowns include proposed funding levels for FERC and the Pipeline and Hazardous Materials Safety Administration (PHMSA) within the Department of Transportation. Both FERC and PHMSA have no bottom-line impact on the federal budget because they collect their revenue through fees, but Congress and the agencies negotiate on their total funding levels as part of the annual budget process.

At EPA, the budget calls for a funding level of $5.7 billion, which would be $2.6 billion below the 2017 CR level and result in cutting 3,200 staff positions at the agency. It would discontinue funding for the Clean Power Plan, international climate change programs, climate change research and related efforts for a savings of more than $100 million.

It would eliminate more than 50 EPA programs, including the Energy Star program that provides energy efficiency information to consumers, with total elimination savings of $347 million.

Specific regional programs for the Chesapeake Bay and the Great Lakes Restoration Initiative would be eliminated to place the funding responsibility upon state and local programs “allowing EPA to focus on its highest national priorities,” according to the document.

Among the reduced funding at the agency are its R&D office, with a $233 million cut from current levels, and the Office of Enforcement and Compliance Assurance, with a $129 million cut, and the Hazardous Substance Superfund Account, with a $330 million reduction.

The budget proposal would avoid duplication of environmental management by concentrating EPA enforcement activities on programs that are not delegated to states, while providing oversight to maintain consistency and assistance across state, local and tribal programs, it said.

The proposal includes increased funding for drinking water and wastewater infrastructure.

By Tom Tiernan TTiernan@fosterreport.com

This article appears as published in The Foster Report No. 3140, issued March 17, 2017

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