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........

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