Cuts in Energy Spending May Prove Elusive

By Jonathan Weisman
Washington Post Staff Writer
Tuesday, October 11, 2005

Soaring energy prices and a renewed attention to issues of poverty after Hurricane Katrina are hampering Republicans' plans to cut dozens of federal programs that Congress had targeted for elimination before the hurricane struck.

By mid-summer, the House Appropriations Committee had identified 98 federal programs to terminate, at a savings of $4.3 billion. President Bush, pressured by his conservative base, had vowed to pursue such terminations in his 2006 budget proposal. And the rush of spending that followed Katrina has triggered an emphatic drive by small-government conservatives to begin reining in federal spending -- at least enough to cover the cost of hurricane relief.

But it could be much tougher to go after programs targeting high energy costs and flood control when Congress returns next week to complete work on spending plans for fiscal 2006, which began this month.

Among the programs set for elimination are high-energy cost amelioration grants totaling $28 million and natural disaster emergency loan subsidies totaling $3 million, both administered by the Agriculture Department. Other targets are $70 million in flood control and coastal emergency programs of the Army Corps of Engineers, a $298 million emergency low-income heating assistance fund, and the $10 million empowerment zone and enterprise community program.

Bush wants to extend the empowerment zones and enterprise community program to the entire Gulf Coast as the centerpiece of his post-Katrina economic renewal effort.

In the Senate, Republicans, pushed by the Bush administration, are moving to eliminate the Energy Department's six regional energy efficiency field offices, just as the nation enters what promises to be one of the toughest winter heating seasons in memory. Those field offices help low-income families insulate their homes, issue and monitor grants aimed at energy efficiency, and help local, state and federal governments implement energy-saving efforts.

The cost-cutting moves highlight the trade-offs involved as Congress tries to address a huge budget deficit without raising taxes. Trimming federal spending may be a politically popular theme, but as details of the cuts emerge, so will the controversy, Republican congressional aides say.

"It's easy to talk about it in the abstract, but the devil's always in the details," said John Scofield, spokesman for the House Appropriations Committee.

The savings from such programs may not be worth the political cost, said Kevin A. Hassett, director of economic policy studies at the conservative American Enterprise Institute.

"The only way to recapture the [conservative political] base is to have a strong simple message, like a spending freeze. This Easter egg hunt for [spending cuts] is going nowhere," he said.

One of those eggs is the constellation of federal energy efficiency offices. The offices in Boston, Chicago, Philadelphia, Denver, Seattle and Atlanta are responsible for issuing and monitoring grants to nonprofit and for-profit organizations and to local governments to insulate the homes of low-income families.

The offices help implement energy-efficiency programs in federal buildings. They also provide technical assistance to entrepreneurs and companies starting up renewable-energy efforts or conservation programs.

The Senate measure, buried in the annual bill that funds the Energy Department, would shut those offices and consolidate their jobs at department facilities in Golden, Colo., and Morgantown, W.Va. By cutting overhead costs, the measure should free up $15 million this fiscal year to increase "weatherization" assistance, Senate documents indicate. And it will save money over time, said Energy Department spokesman Craig Stevens.

"These field offices have been administering grants, and the grants they administer are done by formula and can be done at central office" more efficiently and just as effectively, he said.

State government and former Energy Department officials angrily contest that assessment, and they have begun campaigning to scuttle the move as House and Senate negotiators begin work on the final energy spending bill. Hugh Saussy, who retired in February after running the Northeast regional efficiency office in Boston for 23 years, said the 110 workers at the regional offices have technical knowledge and regional contacts that would be lost in a national consolidation. Grant making, he said, is the smallest part of their job.

"With the serious energy problems we will face this winter, what DOE is proposing is like shutting down the FEMA regional offices before the next hurricane," said Dan Reicher, assistant secretary for energy efficiency in the Clinton administration. "These are the extension agents of energy efficiency, and we should be adding to rather than cutting their ranks."

Stevens said the administration never put together a "formal plan" to close the offices. Instead, he said, senators came to the Energy Department asking for ways to cut costs. In 1996, the Clinton administration eliminated regional energy efficiency offices in San Francisco, Dallas, Kansas City and New York.

Reicher said those eliminations streamlined regional outreach, but the Clinton administration concluded that local offices remained necessary. Saussy said he and others waged an internal battle within the administration for more than a year before office consolidation showed up in the Senate bill.


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