Vermont Low-Income Families Let Down by the Welfare State

When money is perceived as free, it is easy to get addicted to it. State legislators have a penchant for making their states dependent on “free” federal funds. States’ delegations to U.S.  Congress do their best to keep feeding their states with the addiction-forming money. Then, when the flow of federal money tightens, things are not as pleasant anymore. The addiction begins to hurt and the addicts desperately ask for more of the stuff that makes them feel good. This is exactly what is happening in Vermont, as reported by the Burlington Free Press:

Vermont’s congressional delegation pledged to renew the fight for low-income heating aid following release of President Barack Obama’s fiscal 2013 budget proposal on Monday. The spending plan would provide $3 billion for the Low Income Home Energy Assistance Program, which helps families offset some of their heating and cooling costs. The request is $450 million more than Obama requested last year, but Vermont lawmakers say it isn’t enough. Congress approved nearly $3.5 billion for the program in the current fiscal year.

According to Census Bureau reports on Federal Aid to States, in fiscal years 2009 and 2010 the Low Income Home Energy Assistance Program (LIHEAP) sent $4.5 billion to the states. In other words, there was quite a bit of a cut in 2011, but the level is still higher than it was in 2008 when states got $2.7 billion for the program.

Vermont’s share of that money has fluctuated in the same way. In ’08 the Green Mountain State got $16.5 million, in ’09 it was up to $40.7 million only to fall to $23.9 million in ’10.

The problem here is not that there are ups and downs in the funding for the program. The problem is that the program exists in the first place. Low income families get used to receiving a check from the state (which administers the program) and thus do not have to worry about living within their own means. Let us keep in mind that LIHEAP is not for catastrophic situations, such as when someone loses his job in the middle of the winter and cannot get unemployment insurance for some time. This program is designed, funded and operated to feed eligible private citizens with money, on a regular basis, toward one of life’s basic necessities.

It is the responsibility of each and everyone of us to feed, clothe, shelter and transport ourselves as needed. Furthermore, welfare -state entitlement programs of this kind are a major reason why the federal government is running a deficit. The costs of the program are not defined by the ability of non-eligible taxpayers to pay for the program: the costs are defined by the ideological preferences of elected legislators. It is almost a law of nature that these ideological preferences will drive up the cost of entitlement programs faster than the ability of non-eligible taxpayers to pay for those same entitlements.

Which, as we can see in the federal government’s finances, means unsustainable deficits.

Vermont’s congressional delegation should not be worried about is not how to keep feeding immoral and economically disastrous entitlement programs. Instead, they should be worried about what happens when U.S. Congress reaches the point where they can no longer sustain their deficit spending and will have to resort to panic cuts across the budget. They should be worried about shielding their state from mass austerity and instead work with their state legislators to get Vermont out of its dependency on federal money.

They have a very good reason to do this, far beyond the LIHEAP program. In 2010 the federal government paid for 40 percent of all of Vermont’s spending. A drastic but not inconceivable ten-percent cut in federal funds would result in a four-percent cut in state spending – or panic-driven tax increases.

There is only one way to avoid this type of fiscal disaster: begin the phase-out of federal sponsorship of welfare-state programs, and do it now. It is always better to make an orderly retreat and give private alternatives a chance to replace government, than to have to resort to panic-driven austerity measures.

One comment

  1. John McClaughry

    Subsidizing winter heat is a major industry in Vermont. We have taxpayer financed state-run programs to insulate houses and reduce electricity consumption, including $50,000 to help billion-dollar sales Green Mountain Coffee Roasters achieve efficiencies that it could easily have paid for itself.
    After two decades of insulating peoples homes, one would think subsidized heating costs would have subsided. One would be wrong.
    We have twice thwarted natural gas line extensions that would have given thousands of homeowners access to increasingly cheap natural gas. Our threatened regulatory extortion persuaded Portland Natural Gas pipeline to route its Canada to Maine expansion through New Hampshire, at considerably greater cost, just to avoid the curse of traversing Vermont – along its existing right of way!!!
    And our Governor’s earnest dream of making Vermont the world leader in defeating the Menace of Global Warming will, if successful (not likely!), assure Vermonters of colder winters and higher heating subsidies. Go figure.