CRANSTON, RI - In an effort to help consumers deal with rising energy prices, U.S. Senator Jack Reed (D-RI) today joined with Joanne McGunagle, Executive Director, Comprehensive Community Action Program, Robert Murray, Senior VP Corporate Affairs, AAA Southern New England, and Dennis Brennan, President of Brennan Oil, in calling for federal action to help families struggling with the consequences of soaring oil costs.

"The Bush Administration's mishandling of the war in Iraq has significantly contributed to a major spike in oil prices. Today, we have the largest trade deficit ever with oil imports accounting for nearly a third of that trade deficit. The economy is exposed to oil price shocks and supply disruptions, and families are feeling the pinch of oil prices at the pump and in their homes," said Reed. "The billions of ‘petrodollars' being exported out of the United States to pay for energy have a very real effect on local economies and our national security."

In Rhode Island, gas prices have increased by $1.87 per gallon, an increase of 156 percent, since 2001 and the cost of heating oil has increased by $1.97 per gallon, an increase of 159 percent, since 2001. Rates are also expected to be higher for natural gas and electricity service this winter.

"Soaring energy prices mean less money for food, shelter, and life-saving medicine; leaving Rhode Islanders with very tough choices. The Bush Administration must step up and address these problems now to help ease the burden on struggling families. They can help provide working families with much needed relief by supporting Congress' efforts to increase funding for LIHEAP, raising fuel economy standards, investing in energy efficiency and renewable energy, and cracking down on price manipulation and excessive speculation in the energy markets," stated Reed, who recently cosponsored the Close the Enron Loophole Act with Carl Levin (D-MI) to help prevent price manipulation and distortions that lead to high gas, oil, and electricity prices for U.S. consumers.

On November 13, President Bush vetoed the Labor-HHS-Education appropriations bill, which would have provided $2.4 billion for LIHEAP, $629 million above the President's request. The administration also currently has $20 million of LIHEAP funding that could be released immediately to provide families and seniors with additional assistance to meet rising energy costs. Senator Reed and several of his colleagues today sent a letter to President Bush urging him to release contingency funding for LIHEAP and support Congress' funding level for the program.

The text of the letter follows:

The President
The White House
Washington, D.C. 20500

Dear Mr. President:

We are writing to request that you release the remaining $20 million in contingency LIHEAP funds and to urge you to support at least $2.411 billion for the LIHEAP program in FY2008. With the price of oil approaching $100 per barrel, and the Energy Information Administration (EIA) estimating that households can expect to pay between 10 to 22 percent more for heating fuels than during the 2006-2007 winter, states need additional funding immediately to reduce the energy burden of families, individuals with disabilities, and senior citizens and ensure their health and safety this winter.

Between FY2003 and FY2007 the number of households receiving LIHEAP assistance increased by 26 percent from 4.6 million to about 5.8 million or about 15.6 percent of the eligible population. During this same period, the federal appropriation increased by only 10 percent with the resulting average grant declining from $349 to $305. Unfortunately, energy prices are not decreasing proportionally, but instead continue to rise. Home heating prices are projected by the EIA to reach almost $1,000 this year for the typical family, an increase of almost 80 percent higher than the average cost of home heating during the winter of 2001-02. As a result, there has been a significant decrease in the program's purchasing power. According to the National Energy Assistance Directors Association, states are planning to reduce the number of households served by about 15 percent in the absence of additional federal and supplemental state funding. The result would be a decline in the number of households served from about 5.8 million in FY2007 to 4.9 million.

LIHEAP is vital to protecting the public health and safety of low-income families. According to the Children's Sentinel Nutrition Assessment Program (C-SNAP) out of Boston Medical Center, babies and toddlers who live in energy insecure households are more likely to suffer poor health, require hospitalization, manifest developmental problems, and lack adequate food. C-SNAP found that when families do not have access to sufficient energy, they may resort to unsafe heating methods and do not have the proper means to refrigerate or prepare food for their children. In addition, without a sufficient LIHEAP benefit, seniors living on fixed incomes often have to decide between buying life-saving prescriptions and paying utility bills. For individuals and households that may have to face these difficult choices, LIHEAP makes a real difference in their ability to cope with adverse circumstances.