Why is Trump cutting energy aid during an oil price shock?

The Trump administration’s proposal to eliminate funding for the Low Income Home Energy Assistance Program could not come at a worse time for low-income families.  

Home energy prices are currently rising at more than 2.5 times the rate of inflation. Compounding this crisis is the war in Iran, which has added pressure to the budgets of low-income families by pushing up the prices of gasoline, heating oil and food. Yet, instead of cushioning that impact, the administration is proposing to eliminate a $4 billion program that helps about 6 million households afford basic home energy.  

The problem is already acute. One in six U.S. households is behind on its energy bills, with total utility debt reaching about $25 billion at the end of 2025 — the highest level since 2021. Nearly 40 percent of households earning under $50,000 report being unable to pay an energy bill at least once in the past year, and those pressures are likely to intensify as higher energy costs ripple through the broader economy.  

Federal Reserve survey data make clear how little margin many families have: 34 percent of adults with incomes below $25,000 report they were unable to pay all their bills in full. Eliminating assistance under these conditions will not reduce the burden; it will simply shift more of it onto households least able to bear it.  

Of even greater concern is the scale of utility shutoffs affecting residential households. The 2024 Residential Utility Disconnections Report, recently released by the U.S. Energy Information Administration, found that utilities disconnected electricity service 13.4 million times and natural gas service 1.7 million times in 2024. These figures confirm that the electricity shutoff crisis is far more widespread than previously estimated, underscoring the depth of the nation’s energy affordability challenges.  

The administration’s rationale for doing so does not withstand scrutiny.  

First, the Trump administration claimed that the program should be eliminated because of examples of fraud that were identified by a report from the Government Accountability Office that is more than 15 years old. Since then, federal and state agencies have addressed all of these fraud-related concerns by implementing all recommended reforms, strengthening program oversight and accountability. 

Second, the administration claims that the Low Income Home Energy Assistance Program, also known as LIHEAP, is unnecessary because of state-level shut-off protections. But this reflects a misunderstanding of how those policies work. Moratoriums delay disconnections but they do not eliminate the underlying debt. When those protections expire, families are left with bills they still cannot afford.  

Those protections also do not apply to everyone. Households served by municipal utilities, electric cooperatives, or those relying on delivered fuels such as heating oil and propane are often excluded. For many of these families, LIHEAP is the only meaningful source of assistance. 

LIHEAP is not a regional or partisan program. It supports heating in colder regions, cooling in warmer climates, and helps households nationwide cope with extreme weather. More than half of its funding flows to states that voted Republican in the last presidential election, underscoring its broad reach. Although there is no federal program to help families pay for gasoline, LIHEAP effectively serves as a proxy. By helping households cover their home energy bills, it frees up limited income to absorb rising transportation and food costs. 

If the administration is successful in eliminating this program, the consequences are straightforward. Arrearages will skyrocket, utility shut-offs will increase, and human suffering will intensify. Health risks tied to extreme heat and cold will grow, and the financial strain on already vulnerable families will intensify.  

For decades, LIHEAP has been one of the clearest examples of bipartisan agreement that access to affordable energy is essential. That principle is even more relevant during periods of global energy instability. Congress should recognize the administration’s proposal to eliminate its funding for what it is — a policy that would amplify the impact of rising energy prices on some of the nation’s most vulnerable families — and reject it. 

Mark Wolfe is an energy economist and serves as executive director of the National Energy Assistance Directors Association representing the state directors of the Low Income Home Energy Assistance Program. He is also co-director of the Center on Energy Poverty and Climate and serves as an adjunct professor at the George Washington University public policy school.

Cassandra Lovejoy serves as policy director of the National Energy Assistance Directors Association and as co-director of the Center on Energy Poverty and Climate. She also serves as an adjunct professor at the George Washington University public policy school.

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