LIHEAP & CSBG: PROVIDING ASSISTANCE

TO LOW-INCOME FAMILIES

HEARING
BEFORE THE

SUBCOMMITTEE ON EDUCATION REFORM

OF THE

COMMITTEE ON EDUCATION AND

THE WORKFORCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION

HEARING HELD IN WASHINGTON, DC, JULY 8, 2003

Serial No. 108-23

Printed for the use of the Committee on Education
and the Workforce

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 ii

COMMITTEE ON EDUCATION AND THE WORKFORCE

JOHN A. BOEHNER, Ohio, Chairman

THOMAS E. PETRI, Wisconsin GEORGE MILLER, California

CASS BALLENGER, North Carolina DALE E. KILDEE, Michigan
PETER HOEKSTRA, Michigan MAJOR R. OWENS, New York
HOWARD P. BUCK McKEON, California DONALD M. PAYNE, New Jersey
MICHAEL N. CASTLE, Delaware ROBERT E. ANDREWS, New Jersey
SAM JOHNSON, Texas LYNN C. WOOLSEY, California
JAMES C. GREENWOOD, Pennsylvania RUBEN HINOJOSA, Texas
CHARLIE NORWOOD, Georgia CAROLYN McCARTHY, New York
FRED UPTON, Michigan JOHN F. TIERNEY, Massachusetts
VERNON J. EHLERS, Michigan RON KIND, Wisconsin
JIM DeMINT, South Carolina DENNIS J. KUCINICH, Ohio
JOHNNY ISAKSON, Georgia DAVID WU, Oregon
JUDY BIGGERT, Illinois RUSH D. HOLT, New Jersey
TODD RUSSELL PLATTS, Pennsylvania SUSAN A. DAVIS, California
PATRICK J. TIBERI, Ohio BETTY McCOLLUM, Minnesota
RIC KELLER, Florida DANNY K. DAVIS, Illinois
TOM OSBORNE, Nebraska ED CASE, Hawaii
JOE WILSON, South Carolina RAUL M. GRIJALVA, Arizona
TOM COLE, Oklahoma DENISE L. MAJETTE, Georgia
JON C. PORTER, Nevada CHRIS VAN HOLLEN, Maryland
JOHN KLINE, Minnesota TIMOTHY J. RYAN, Ohio
JOHN R. CARTER, Texas TIMOTHY H. BISHOP, New York
MARILYN N. MUSGRAVE, Colorado
MARSHA BLACKBURN, Tennessee
PHIL GINGREY, Georgia
MAX BURNS, Georgia

Paula Nowakowski, Chief of Staff

John Lawrence, Minority Staff Director

SUBCOMMITTEE ON EDUCATION REFORM

MICHAEL N. CASTLE, Delaware, Chairman
TOM OSBORNE, Nebraska, Vice Chairman LYNN C. WOOLSEY, California
JAMES C. GREENWOOD, Pennsylvania SUSAN A. DAVIS, California
FRED UPTON, Michigan DANNY K. DAVIS, Illinois
VERNON J. EHLERS, Michigan ED CASE, Hawaii
JIM DeMINT, South Carolina RAUL GRIJALVA, Arizona
JUDY BIGGERT, Illinois RON KIND, Wisconsin
TODD RUSSELL PLATTS, Pennsylvania DENNIS J. KUCINICH, Ohio
RIC KELLER, Florida CHRIS VAN HOLLEN, Maryland
JOE WILSON, South Carolina DENISE L. MAJETTE, Georgia
MARILYN N. MUSGRAVE, Colorado
 iii

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................. i

OPENING STATEMENT OF CHAIRMAN MICHAEL N. CASTLE, SUBCOMMITTEE ON

EDUCATION REFORM, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S.
HOUSE OF REPRESENTATIVES ............................................................................................... 1

OPENING STATEMENT OF RANKING MEMBER LYNN C. WOOLSEY,

SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES ............................................................ 3

TESTIMONY OF LESLIE LEE, LIHEAP DIRECTOR, DEPARTMENT OF HEALTH AND

SOCIAL SERVICES, NEW CASTLE, DELAWARE .................................................................. 7

TESTIMONY OF DR. CAROLYN C. DRAKE, DIRECTOR, SOUTHERN STATES ENERGY

BOARD, WASHINGTON, D.C..................................................................................................... 9

TESTIMONY OF DR. MARY NELSON, PRESIDENT AND CEO, BETHEL NEW LIFE,
INC., CHICAGO, ILLINOIS ....................................................................................................... 10

TESTIMONY OF MR. MICHAEL TUBBS, EXECUTIVE DIRECTOR, COMMUNITY

ACTION ASSOCIATION OF ALABAMA, BIRMINGHAM, ALABAMA ............................. 12

TESTIMONY OF MR. DAVID BRADLEY, EXECUTIVE DIRECTOR, NATIONAL

COMMUNITY ACTION FOUNDATION, WASHINGTON, D.C. ........................................... 14

APPENDIX A WRITTEN OPENING STATEMENT OF CHAIRMAN MICHAEL N.

CASTLE, SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON EDUCATION
AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES.......................................... 1

APPENDIX B OPENING STATEMENT OF RANKING MEMBER LYNN C. WOOLSEY,

SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES ............................................................ 1

APPENDIX C WRITTEN DOCUMENT SUBMITTED FOR THE RECORD BY RANKING

MEMBER LYNN C. WOOLSEY, SUBCOMMITTEE ON EDUCATION REFORM,
COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF
REPRESENTATIVES.................................................................................................................... 1

APPENDIX D WRITTEN TESTIMONY OF LESLIE LEE, LIHEAP DIRECTOR,

DEPARTMENT OF HEALTH AND SOCIAL SERVICES, NEW CASTLE, DELAWARE...... 1
 iv

APPENDIX E WRITTEN TESTIMONY OF DR. CAROLYN C. DRAKE, DIRECTOR,

SOUTHERN STATES ENERGY BOARD, WASHINGTON, D.C.............................................. 1

APPENDIX F WRITTEN TESTIMONY OF DR. MARY NELSON, PRESIDENT AND CEO,

BETHEL NEW LIFE, INC., CHICAGO, ILLINOIS..................................................................... 1

APPENDIX G WRITTEN TESTIMONY OF MR. MICHAEL TUBBS, EXECUTIVE

DIRECTOR, COMMUNITY ACTION ASSOCIATION OF ALABAMA, BIRMINGHAM,
ALABAMA .................................................................................................................................... 1

APPENDIX H WRITTEN TESTIMONY OF MR. DAVID BRADLEY, EXECUTIVE

DIRECTOR, NATIONAL COMMUNITY ACTION FOUNDATION, WASHINGTON, D.C... 1

APPENDIX I WRITTEN DOCUMENT SUBMITTED FOR THE RECORD BY DR.

CAROLYN C. DRAKE, DIRECTOR, SOUTHERN STATES ENERGY BOARD,
WASHINGTON, D.C., AT THE REQUEST OF THE HONORABLE VERNON EHLERS,
SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES ............................................................ 1

TABLE OF INDEXES ................................................................................................................... 2

 1

HEARING ON LIHEAP AND CSBG: PROVIDING

ASSISTANCE TO LOW-INCOME FAMILIES

TUESDAY, JULY 8, 2003

SUBCOMMITTEE ON EDUCATION REFORM,

COMMITTEE ON EDUCATION AND THE WORKFORCE

U.S. HOUSE OF REPRESENTATIVES

WASHINGTON, D.C.

The Subcommittee met, pursuant to call, at 3 p.m., in Room 2175, Rayburn House Office
Building, Hon. Mike Castle [chairman of the subcommittee] presiding.

Present: Representatives Castle, Osborne, Ehlers, Biggert, Woolsey, Davis of California,

Davis of Illinois, Grijalva, Van Hollen, and Majette.

Also Present: Representative Rogers.

Staff Present: Julian Baer, Legislative Assistant; Pam Davidson, Professional Staff
Member; Kevin Frank, Professional Staff Member; Parker Hamilton, Communications
Coordinator; Kate Houston, Professional Staff Member; Krisann Pearce, Deputy Director of
Education and Human Resources Policy; Deborah L. Samantar, Committee Clerk/Intern
Coordinator; Ruth Friedman, Minority Legislative Associate/Education; Joe Novotny, Minority
Legislative Assistant/Education; and Lynda Theil, Minority Legislative Associate/Education.

OPENING STATEMENT OF CHAIRMAN MICHAEL N. CASTLE,

SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF
REPRESENTATIVES
 2

Chairman Castle. The Subcommittee on Education Reform will come to order. We appreciate
the attendance of our ranking member, Ms. Woolsey, who will speak in a moment, and our co-
chairman, Mr. Osborne, for being here. A quorum is present, so we will officially come to order.

We are meeting today to hear testimony on LIHEAP and CSBG: Providing Assistance to
Low-Income Families. Under Committee rule 12(b), opening statements are limited to the
Chairman and ranking minority member of the Subcommittee. Therefore, if other members have
statements, they may be included in the hearing record.

With that, I ask unanimous consent for the hearing record to remain open 14 days to allow
members' statements and other extraneous material referenced during the hearing to be submitted in
the official hearing record.

Without objection, so ordered.

Let me say good afternoon to everybody who is here today, particularly our witnesses who
have come from various parts of the country to join us. I do want to welcome all of you to our
hearing today entitled LIHEAP and CSBG: Providing Assistance to Low-Income Families.
Today's hearing marks the beginning of the Subcommittee's examination of the Low-Income Home
Energy Assistance Program, which we all know as LIHEAP, and the Community Services Block
Grant, which we all know as CSBG. Both programs are scheduled for reauthorization during the
108th Congress session.

We are interested in learning more about how LIHEAP and CSBG have been implemented
and administered since the last reauthorization, and look forward to learning about what aspects of
these programs work well and what has not in providing assistance to low-income individuals,
families, and communities. We are also eager to hear any suggestions and recommendations for
improving LIHEAP and CSBG during the next reauthorization.

As many of you know, the Low-Income Home Energy Assistance Program is a block grant
program under which the Federal Government gives States and other jurisdictions annual grants to
operate home energy assistance programs for low-income households. Federal requirements are
minimal and leave most important program decisions to the States. The program also authorizes a
separate contingency fund that may be used at the discretion of the President in response to a
natural disaster or other emergency need.

The LIHEAP program serves over 4 million households each year, and in my home State of
Delaware, approximately 13,000 families have benefited from the program. The Community
Services Block Grant is also a Federal block grant that funds a State-administered network of over
1,100 public and private community action agencies delivering social services to low-income
Americans.

The Community Services Block Grant Act was established in 1981 in response to President
Reagan's proposal to consolidate the community services administration and 11 other anti-poverty
programs. Block grant funds may be used for a wide range of anti-poverty activities to help
families and individuals achieve self-sufficiency. The CSBG program is an essential tool in
 3

meeting the unique needs of each area and serves as a conduit for community services.

I want to thank and recognize our witnesses for being here today. We are looking to you,
the people who work with these programs on a daily basis, to find the best way to provide
appropriate services to our low-income neighbors. As needs in our communities continue to
change, we must make sure that our approach to helping families in need is appropriate to the
times.

In just a moment, I will begin with the introductions of all of you, but first I will yield to our
ranking member, Ms. Woolsey, for any statement she may wish to make.

WRITTEN OPENING STATEMENT OF CHAIRMAN MICHAEL N. CASTLE,

SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES SEE APPENDIX A

OPENING STATEMENT OF RANKING MEMBER LYNN C. WOOLSEY,

SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF
REPRESENTATIVES

Ms. Woolsey. Thank you, Mr. Chairman.

Thank you, wonderful witnesses, for being here today. We thought we were going to be
voting last night, which would mean we would have a full committee sitting here listening to you;
but when we start tonight at 6:30, people are flying in. It is not lack of interest, believe me.

I would like you to know how important I believe the Community Services Block Grant and
the Low-Income Home Energy Assistance Program are. They are not as well known as the other
programs under our jurisdiction here on the subcommittee, but believe me, they are every bit as
important.

Statistics show that poverty touches a large proportion of Americans sometime during their
lives. Often it is caused by an unexpected event, such as illness, loss of a job or divorce; and
heaven forbid, just getting old can get you into poverty and can leave whole families struggling to
survive. CSBG and LIHEAP provide the support that these folks need to keep going through tough
times and often it helps them fight their way out of poverty and makes it able for them to get back
on their feet and back on track.

I am aware of just how important these programs are to families, because I am really
fortunate to have two excellent community action agencies in the district that I represent. I
represent the two counties north of the Golden Gate Bridge. When you get halfway across the
Golden Gate Bridge, you are in Woolsey country. The community action agencies in both Sonoma
and Marin Counties run extremely innovative programs, programs that address the real needs of
 4

low-income families in my community.

As you can imagine, affordable housing is a huge problem in my area. Community Action,
Sonoma County, operates a number of housing facilities, including a unique transitional housing
facility for single moms, those who are trying to work their way off welfare. Community Action,
Sonoma County, runs one of the few school-based health centers in California. It administers an
individual development account program, it has a program which places a school nurse in eight
low-income schools, it runs an emergency women's shelter and provides a variety of youth
services.

And then, just to show the diversity in the types of programs, Community Action, Marin,
just south of Sonoma County, was one of the very first HIV service providers in our area, and its
peer mental health program is scheduled to be featured on PBS in a documentary series on
innovative mental health services in the very near future.

In addition, Community Action, Marin, operates three children's centers, including a center
for infant and toddler care, which is sorely needed in Marin and every place in the country. It runs
the Marin Head Start, the Marin Fatherhood program, a learning center and a jobs and career
services program, as well as a variety of other programs that serve Marin County families in need.

Some people think that is an oxymoron, Marin County and families in need. It is one of the
most affluent districts in the Nation, but we have pockets of need; and the people that I represent
who pay the high taxes actually expect that we will help the people in need in their community.
This program makes that very, very possible.

Like community action agencies all around the country, Community Action, Marin, and
Community Action Partnership of Sonoma County provide services and support that literally
change people's lives.

So here we are today and you are going to tell us what you know. You are the witnesses.
You are the experts. We look forward to hearing your testimony about what works and what
doesn't work, because we are going to be looking at the changes that need to improve these two
programs before we reauthorize.

Thank you, Mr. Chairman.

Mr. Chairman, with unanimous consent I would like to enter the recommendations of the
National Association for State Community Services Programs into the record.

WRITTEN OPENING STATEMENT OF RANKING MEMBER LYNN C. WOOLSEY,

SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES SEE APPENDIX B

Chairman Castle. Without objection, they will be entered in the record.

 5

WRITTEN DOCUMENT SUBMITTED FOR THE RECORD BY RANKING MEMBER LYNN

C. WOOLSEY, SUBCOMMITTEE ON EDUCATION REFORM, COMMITTEE ON
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES SEE
APPENDIX C

Chairman Castle. Thank you, Ms. Woolsey, for your statement. We appreciate it. We will now
turn to our witnesses, because we have a very distinguished panel today. I will now explain the
ground rules.

Some of you understand these rules and some may be new to this, but each of you will have
5 minutes in which to testify. You may summarize your testimony. I guess in those 5 minutes you
can do anything you want, but hopefully it will be along the lines of what you have submitted in
writing to us.

We will just go in order after I introduce everybody down the line. After that is over, each
member will have 5 minutes to ask and get questions answered.

Ms. Woolsey is absolutely correct. This is a return day after our break and it had been
originally anticipated that we would be in session yesterday. Because we were not, we probably
have an attendance issue that we do not normally have.

I would point out that the testimony you submit is certainly reviewed and scrutinized
carefully by Committee staff, as well as individual staff. It is every bit as important as if people
were here. We look forward to your testimony.

I will now proceed with the introductions. My first introduction is of a fellow Delawarean,
Ms. Leslie Lee. We both had railroad problems today getting down here, but we finally made it.
Ms. Lee is the LIHEAP Director for the Delaware Department of Health and Social Services. She
has worked for the State of Delaware for over 24 years, 15 of which were spent in her current
position. As Director of LIHEAP, Ms. Lee oversees the daily management of the program to
ensure that the needs of low-income citizens are met.

In addition, Ms. Lee serves as the Secretary of the National Energy Assistance Directors
Association, which is known as NEADA. NEADA is a national organization of LIHEAP State
agency administrators that impacts energy policies and services on behalf of low-income
households.

Our second witness will be Dr. Carolyn Drake. Dr. Drake is the Director of the Southern
States Energy Board, SSEB, in Washington, D.C. The SSEB is a nonprofit interstate compact
organization, created to enhance the quality of life for the citizens of the south through innovations
in energy and environmental programs and technologies.

Dr. Drake has over 22 years' experience in the area of energy and environmental policy,
economic development, and technology development and deployment. Prior to her current
position, Dr. Drake was a professional staffer for a United States Senate Committee.
 6

After Dr. Drake will be Dr. Mary Nelson. Dr. Nelson is the President and CEO of Bethel
New Life, Inc., in Chicago Illinois. Bethel New Life, Inc., is a 24-year-old faith-based community
development corporation serving the West Side Chicago community. Bethel has demonstrated a
commitment to building the community from the inside out and has a national reputation for
innovative and effective urban community initiatives. Bethel provides over 20 programs for
community development, housing and economic development, employment, family support, senior
citizens, and cultural arts.

In addition to her current position at Bethel, Dr. Nelson also chairs Good City Chicago, and
serves on the boards of Call to Renewal and Christian Community Development Association. This
all seems like enough to keep her busy.

Now I would like to welcome one of our colleagues from Alabama, Mr. Rogers, to the
Subcommittee today. We have given him special dispensation to be here. He has a constituent
who is our next witness on the panel and we would like to extend him the courtesy of introducing
him to all of us. We recognize the gentleman from Alabama, Mr. Rogers.

Mr. Rogers. Thank you, Chairman Castle and Ranking Member Woolsey and members of the
Subcommittee. I appreciate your allowing me the opportunity and the courtesy to introduce to you
one of my constituents from the Third District of Alabama, as I am not a member of this
Subcommittee.

Michael Tubbs serves as the Executive Director of the Community Action Association of
Alabama and lives in Childersburg, which is a city in my district. As he will testify, the areas I
represent have been adversely impacted by the loss of textile and manufacturing jobs in the State.
Community action partnerships in Alabama help guide those living in poverty and in need of
assistance to Federal, State, and local programs and other services that provide the resources they
need to get back on their feet.

In his role as Executive Director, Mike serves the 22 community action agencies in
Alabama which together provide assistance to people in all 67 counties in our State. Mike also
serves with many other local, regional, and national groups striving to solve the issues presented by
poverty.

Prior to his current role, Mike worked for 35 years at Alabama Power Company. He
received his bachelor's degree in human resource management from Faulkner University in
Montgomery, Alabama, which is also in my district. Mike is a husband, father, and a grandfather.
He serves his community as a foster parent and through his church, Grace Baptist.

I am honored to have the opportunity to introduce him to you today and thank the
Subcommittee for their time and attention.

Thank you, Mr. Chairman.

 7

Chairman Castle. Thank you very much, Mr. Rogers. We do appreciate having you here today as
well.

Our final witness will be Mr. David Bradley. Mr. Bradley is the Executive Director of the
National Community Action Foundation, the organization that he helped to found in 1981. He has
probably been dealing with this subject as much as anybody in the country over all these years.
The NCAF is a private nonprofit group that works to represent a variety of antipoverty programs.

In addition, Mr. Bradley is a partner at Moss, McGee, Bradley, Kelly & Foley, a
government relations firm located in Washington, D.C.

Mr. Bradley has served on a number of advisory boards and is currently a member of the
FEMA Emergency Food and Shelter national board's resource panel. We certainly welcome Mr.
Bradley here today as part of this panel.

As I have indicated, we will have the witnesses testify in 5-minute increments and then we
will turn to the committee for its questions and statements.

Ms. Lee, you have the honor of being the leadoff witness.

TESTIMONY OF LESLIE LEE, LIHEAP DIRECTOR, DEPARTMENT OF

HEALTH AND SOCIAL SERVICES, NEW CASTLE, DELAWARE

Ms. Lee. Good afternoon, everyone. Thank you. I want to thank the Subcommittee for giving me
the opportunity to testify on the reauthorization of the Low-Income Home Energy Assistance
Program this afternoon.

Again, I am Leslie Lee, and I am the Director of LIHEAP in the State of Delaware. I will
reiterate that I also serve as the Secretary of the National Energy Assistance Directors Association,
NEADA, an association of the State LIHEAP directors.

LIHEAP is a program that works. The primary purpose of our program is to provide
heating and cooling assistance to low-income households throughout the United States and its
territories. During this past winter, we assisted nationally 4.6 million low-income households with
home energy bills. That is only 16 percent of the eligible population. The average LIHEAP
household has an income of less than $10,000 and is primarily comprised of low-income elderly,
disabled, and poor working families with young children.

The mean energy burden for low-income households was 14 percent of the total income,
which is about four times the average for all other households. Without LIHEAP assistance, many
of these families would have to choose between paying their energy bills and other vital necessities
such as food, medicine, rent, and mortgage. This is especially important for households that we
target with elderly members, very young children, and disabled recipients who are more vulnerable
to temperature-related illnesses than most people.
 8

Delaware provided assistance to 13,179 households over the winter. This was an increase
of 11 percent over the previous winter. In addition to the 13,000 households that we provided
assistance to, we have a crisis program that helped more than 4,200 households; that was a 58
percent increase over the winter before that. During this time, we had extremely cold weather and
a lot of snow in our State and the whole region, of which you are probably aware. We had a lot
more people come in asking for assistance than usual.

Due to Delaware's location and the weather situation where we actually feel all four
seasons, we also have a cooling assistance program. Some of the States that operate LIHEAP have
a heating or a cooling program, and some of us have both; Delaware is one of those programs that
has both. We felt that was important because a household that does not get the heat they require in
the winter will be just as vulnerable if they are going through a hot, humid day, and are without any
kind of air conditioning.

Oftentimes we get elderly people who call us and say I have air conditioning, but I do not
want to turn it on because I cannot afford to pay. We encourage them to turn it on, stating how we
will assist them with their electric bill. Last summer we assisted, in the State of Delaware, almost
600 elderly households and persons who had breathing problems, such as children that have
asthmawhich is a big problem in the State of Delaware. There are others, emphysema and lung-
related problems; we provide an air conditioner for them too.

In addition, we helped more than 3,200 households with their electric bill. This summer we
intend to do the same thing except those numbers will be cut in half, due to the lack of funding for
it. Part of the reason for this lack of funding is because we used so much of it during the winter
and its extremely cold weather.

In the State of Delaware we administer a program that we call "one-stop shopping," because
the application for the LIHEAP program is the same application process we use for the DOE
weatherization program. This saves on administrative costs in the State of Delaware, and it is very
helpful for the customers; they are able to come in and not worry about going to multiple places to
apply for assistance.

As a representative of NEADA, I wanted to share with you several recommendations we

discussed at a meeting last month, the number one thing being an increase in funding. In order to
serve more households in the proper manner we would like to, we wish to see the authorization
level increased to $3.4 billion. This is the same level included in the House and Senate energy
bills. This would allow States to increase the percentage of eligible households served from about
16 to 34 percent.

The other major recommendation we have would be to maintain the block grant format.
This would allow each of the States to operate a program that best fits that particular State. The
program is very focused on the climate, so it is important that each State be able to administer a
program that fits that State. We would like to focus on that.

I would like to close by sayingI want to reiterate that LIHEAP works. We can do a better
job with additional funding. I always get letters, calls, and thank-you notes from people who say
 9

how much this program has helped them and, what could happen if they did not have LIHEAP.

Again, I would like to thank you for having me here this afternoon to testify on behalf of
LIHEAP. It has been a pleasure.

WRITTEN TESTIMONY OF LESLIE LEE, LIHEAP DIRECTOR, DEPARTMENT OF

HEALTH AND SOCIAL SERVICES, NEW CASTLE, DELAWARE SEE APPENDIX D

Chairman Castle. Thank you, Ms. Lee. We will now go to Dr. Drake.

TESTIMONY OF DR. CAROLYN C. DRAKE, DIRECTOR, SOUTHERN

STATES ENERGY BOARD, WASHINGTON, D.C.

Dr. Drake. Thank you, Chairman Castle and Subcommittee members. Thank you for giving us
the opportunity to come and talk about this particular program. We are here today to offer
concrete, specific, heartfelt recommendations, and suggestions to improve the program.

SSEB, my organization, represents 16 States, stretching form Maryland to Texas, that are
home to 37 percent of the U.S. population. We also have 40 percent of all the low-income citizens
in the United States. The South has the Nation's largest poverty rate.

The population in the South is growing, unemployment right now is the highest it has been
in several years, and natural gas prices are soaring. This is significant because the LIHEAP funds
are still being distributed based on numbers that are more than 20 years old, leading to LIHEAP
reaching only about 15 percent of the eligible population.

Today, embedded within LIHEAP, are two distribution formulas. SSEB and southern
governors commissioned a study last year that described one of those formulas as "a near-ideal
allocation methodology." The formula takes into consideration State residential fuel consumption
for space heating and cooling; annual and average heating and cooling degree-days by region,
weather zone and State, the percentage of low-income households, and the average price of fuel for
each fuel for each State.

Although this formula was affixed to the LIHEAP program in 1984, it only goes into effect
when the allocations are above $1.97 billion. Unfortunately, LIHEAP has averaged only $1.5
billion over the last 17 years, well below the trigger amount.

I will not recite the elements of the formula that govern the appropriations if they are below
$1.975 billion, but you will find them in my prepared remarks. Note that most of the used data is
from 1970, the late 1970s, and the early 1980s, and is based on the number of heating degree-days,
squared. This effectively skews the data to the disadvantage of States in the South and West.

The Bush Administration also observed the need for a more equitable allocation by basing
formulas on current home energy expenditures paid by low-income households. Between 1998 and
 10

2000, heat resulted in almost 20 times more deaths than did the extreme cold.

The fact is the vast majority of eligible Americans are currently not helped by LIHEAP,
regardless of where they live. The Southern States Energy Board recommends that Congress, one,
put the needed, substantial appropriations into the program, ensuring the present trigger point is
routinely exceeded and that the program is able to reach more of those that it is intended to serve,
not just 15 percent of them. This necessitates a sustained formula grant appropriation well above
$1.975 billion. Doing so would ensure no State is negatively affected and, therefore, would not
devolve into a regional fight.

Number two, we would like to see the increased LIHEAP authorization level to
accommodate a materially higher appropriation; and three, we would like for Congress to more
closely examine the current formula, as well as the adequacy of the authorization and
appropriations. This would ensure that LIHEAP is meeting the needs of the citizens who are living
in unhealthy and unsafe conditions because they cannot pay their energy bills. Before the program
is reauthorized, perhaps the Department of Health and Human Services should prepare
recommendations for this Committee on the manner in which the funds are available and
distributed.

Mr. Chairman, we are grateful for the opportunity to share these insights and pledge to
work closely and cooperatively with you to improve LIHEAP.

WRITTEN TESTIMONY OF DR. CAROLYN C. DRAKE, DIRECTOR, SOUTHERN STATES

ENERGY BOARD, WASHINGTON, D.C. SEE APPENDIX E

Chairman Castle. Thank you very much, Dr. Drake. We will now turn to Dr. Nelson.

TESTIMONY OF DR. MARY NELSON, PRESIDENT AND CEO, BETHEL

NEW LIFE, INC., CHICAGO, ILLINOIS

Dr. Nelson. Thank you. It is a real pleasure to be here before you today, Mr. Chairman and
Committee members, especially my own Congressman, Danny Davis, to urge you to support the
reauthorization of the CED program of the CSBG, not particularly the Secretary's discretionary
fund.

Bethel New Life is a faith-based community development corporation, an outgrowth of the

community ministry of Bethel Lutheran Church on the west side of Chicago. Bethel has done over
1,000 units of energy-efficient housing and placed over 7,000 people in living-wage jobs. We
achieved all this in our 24 years of existence, and bringing over $130 million of new investments
into our credit-starved community.

We have created over 800 new permanent jobs in the community; we currently have 400
employees ourselves, 90 percent residents of our low-income community, and a $12.5-million-a-
year operating budget. We seek to empower individuals, strengthen families, and build a
 11

sustainable community. I am really pleased to be here.

We have been a recipient and user of CED funds to help make a real and visible difference
in our community. I want to take a moment to just describe community development corporations,
or CDCs.

There are over 3,000 of us across the country; I am sure we are in every one of your
communities. We target the lowest income minority communities where the lack of credit, the lack
of assets, and the lack of investment are a major difficulty. CDCs, along with creative energy and
community-based approaches, carve out great sitting, solutions, and opportunities for people in our
communities.

I am a former Chair of the Board of the National Congress of Community Economic

Development, NCCED, and we regularly did surveys of CDCs. The most recent survey showed in
the last 2-year period that CDCs have created or retained some 247,000 jobs in this country,
developed 550,000 units of affordable housing, loaned $1.9 billion to small businesses,
rehabilitated or built 71 million square feet of commercial and industrial space, and assisted
149,000 homeowners. We are, over all, the best-kept secret in many communities, doing the work
that the marketplace does not do because the challenges are great.

Section 681 of the CSBG Act authorizes the discretionary authority of the Secretary, and
that is where the CED program fits in. It is unique in a number of ways. It is the only place that
we know of where there is capital directly made available for CDCs to invest in private business
and enterprises, in turn, to target jobs and business opportunities to low-income citizens. It is
extremely targeted for the biggest bang for the buck in targeting low-income folks.

Secondly, the CED program is effective in leveraging dollars. For every dollar of
government money, the CED money, 3 private dollars, are leveraged and brought into credit-
starved communities, really making a difference. It can do a variety of things in attracting both
bank investments and other investments, really helping communities to achieve the tipping point.

It is a competitive, discretionary grant program. Grants are made for a whole variety of
different thingsto finance commercial real estate development, including manufacturing and
industrial facilities; business incubators; community facilities such as we have done with day care
and health centers and other public facilities; and loans to small businesses that hire local people
and help move people out of poverty and off of welfare. These generated jobs are the most
important impact of this grant program.

We appreciate the President's support for this important program. This year, the President's
budget includes $32.5 million for CED. Also, this year, members of this Committee, including
Congressman McKeon, Congressman Petri, and Congressman Danny Davis, worked successfully
to support the President's request in the Appropriations Committee.

A recent survey showed that the CED grants created major impact and did what they
promised. I would like to give two quick examples, and then I will be done.
 12

First is, Bethel New Life used two different CED grants to transform or close down a 9.2-
acre inner-city hospital campus. There we brought in elderly housing, assisted living, children's day
care that is partially a Head Start program, a culture and performing arts center, and a small
business center. All these services created 170 new permanent jobs, leveraged $30 million of other
investments from the $1 million of CED grants, and transformed a block in a community.

Kentucky Highlands, Kentucky invested in T.Q. Company, allowing the company to

expand, be subsequently bought out, and permit Kentucky Highlands Development Corporation to
take that money and reinvest it in the neighborhood.

So these are dollars that get reinvested.

We have just one quick recommendation. Obviously, you continue this program, it makes a
big difference in our neighborhoods and you continue to help us clarify the law so that there is not
any question about what the terms mean. Finally, we would recommend that there would be some
small changes in the law that would help target even better and help work these funds so that they
can be recycled in a neighborhood once they have been invested.

Thank you very much.

WRITTEN TESTIMONY OF DR. MARY NELSON, PRESIDENT AND CEO, BETHEL NEW
LIFE, INC., CHICAGO, ILLINOIS SEE APPENDIX F

Chairman Castle. Thank you, Dr. Nelson. We will now go on to Mr. Tubbs.

TESTIMONY OF MR. MICHAEL TUBBS, EXECUTIVE DIRECTOR,

COMMUNITY ACTION ASSOCIATION OF ALABAMA, BIRMINGHAM,
ALABAMA

Mr. Tubbs. Thank you, Chairman, and thank you, Committee. It is my pleasure to represent my
counterparts across the country through my organization Community Action, Alabama. There are
many who do a like-minded job and have done it very well for many more years than I have been
involved in Community Action.

As my representative introduced me, my background is in private business with Alabama

Power, a public utility. I come from a business background that really understands the single
product and how to get results through investment of ratepayer dollars.

The issues of poverty are very different. As I have worked for 3 years now in the
Community Action network, I have come to, appreciate the work that is being done, and also the
many challenges they face. Funding obviously is a challenge.

Community Action is unique. Due to my familiarity with the nonprofit sector, Community
Action appears to be an organization that has its hand on the pulse of the issues of poverty and
seeks to match resources with need at the local level. Its uniqueness is a board membership
 13

composed of members of the community, people who are face-to-face with povertythe Board has
elected officials, people from private business sectors, the faith community, and then
representatives from the very people whom we help, the poor. The uniqueness of Community
Action allows them to not only react to the local need, but to do something about it at this level.

There are a lot of people that talk about poverty. There are only a few that really make a
difference in solving the problems of poverty. Our communities are better because of Community
Action. They build capacity in the community.

The investment of taxpayer dollars allows us to have venture capital; this is what I see the
block grant being. That block grant is then expanded through building partnerships and
relationships at the local level; State and local dollars allow us to expand and support the many
programs that are funded from different parts of the Federal Government.

CSBG is the glue that holds all of these programs together. The block grant under girds the
many different programs, whether it is transportation, food and nutrition, Fatherhood Initiative,
Head Start, weatherization, or LIHEAP. Without the block grant, those programs would be less
effective and certainly unable to make the impact that they are making in the communities today.

As all the other witnesses have testified, I do not think there is enough money being printed
in Washington to solve all the problems of poverty, but we do make a dent in the communities we
serve. Whether it is ruralwhich 30-plus percent of our population that we serve are from. Rural
communities just do not have community capacity. There is no economic development in some
parts of Alabama, rather economic despair.

The war on poverty is raging in parts of Alabama, whether it is on the Gulf Coast, the
Tennessee Valley, or east to west across our great State. We have solved a lot of problems and we
continue to make an impact.

Community Action is sincere about their work, and we will continue to make a difference
using the flexibility of the block grant and the effective and efficient programs to make a difference
in Alabama.

There is a high cost of being poor all across the country. For example, the high cost of
transportation in rural communities. In many places there is no transportation in rural
communities. We have people who have to pay someone to get them to a Community Action
agencyso there is a high cost of being poor.

There are high costs of housing in our area, if you can afford it at all or if it is even livable.
We are trying to do something about affordable housing.

We have food and nutrition programs that help people, especially senior adults. These do
make a big difference.

Sequencing the programs that we have through the intake process allows us to move people
toward some level of self-sufficiency. They might not ever be able to be self-sufficient, but at least
 14

we are moving them up that chain so they can be less dependent on the community to solve their
problems.

It is a real pleasure to represent the Community Action network of Alabama. We have

great needs, and the block grant helps us solve a number of problems. LIHEAP obviously makes a
difference.

It was 95 and 100 percent humidity when I left Alabama. LIHEAP actually saves lives. If
you can put a value on that, obviously it is a program that is well worth the investment of tax
dollars.

Thank you for letting me be here today.

WRITTEN TESTIMONY OF MR. MICHAEL TUBBS, EXECUTIVE DIRECTOR,

COMMUNITY ACTION ASSOCIATION OF ALABAMA, BIRMINGHAM, ALABAMA SEE
APPENDIX G

Chairman Castle. Thank you, Mr. Tubbs. Mr. Bradley.

TESTIMONY OF MR. DAVID BRADLEY, EXECUTIVE DIRECTOR,

NATIONAL COMMUNITY ACTION FOUNDATION, WASHINGTON, D.C.

Mr. Bradley. Thank you, Mr. Chairman and Ranking Member Woolsey. It is a pleasure to be
here today to talk about both CSBG and LIHEAP.

Congress created the Community Services Block Grant in 1981. From the beginning, it was
seen as a program that combined the desire by a President and some in Congress to shift authority
and responsibility for programs to the States while at the same time recognizing an equally strong
desire by many in Congress to maintain a funding stream for the Nation's Community Action
Agency network.

Mr. Chairman, the Community Services Block Grant allows Community Action Agencies
to do their job. And what is their job? Let me quote the best description of the purpose of the
Community Action Agency movement ever written. It comes from the Office of Economic
Opportunity in the Nixon administration. I quote:

"While the operation of programs is the CAA's principal activity, it is not the CAA's,
Community Action Agency's, primary objective. Community Action Agency programs must serve
the larger purpose of mobilizing resources and bringing about greater institutional sensitivity. This
critical link between service delivery and improved community response distinguishes Community
Action Agencies from other agencies.

"We recognize that a Community Action Agency has a primarily catalytic mission to make
the entire community more responsive to the needs and interests of the poor by mobilizing
resources and bringing about greater institutional sensitivity. A CAA's effectiveness, therefore, is
 15

measured not only by the services which it directly provides, but more importantly, by the
improvements and changes it achieves in the community's attitudes and practices toward the poor
and in the allocation and focusing of public and private resources for antipoverty purposes."

Mr. Chairman, those words by then-OEO Director Donald Rumsfeld published in 1970 set
the goals and benchmarks for Community Action Agencies that we tried to carry forward in the
Community Services Block Grant in 1981. CSBG today funds now more than 1,100 agencies that
help provide mainstream leadership and capabilities for creating, coordinating, and delivering
comprehensive programs and services to almost a quarter of all people living in poverty.

The characteristics of CSBG-funded Community Action Agencies are worth mentioning for
just a second.

Governance: All CSBG have a tripartite board, one-third low-income, one-third public, and
one-third private.

Innovative solutions: With virtually any Member in Congress, we can point to innovative
solutions that have occurred in their community because of CSBG-funded Community Action
Agency leadership.

Comprehensive solutions: CAAs use CSBG dollars to coordinate multiple programs. They
provide multiple services, from Head Start to family literacy, childcare and after-school programs
to youth and adult employment.

Community Action Agencies, through CSBG, are now a $9 billion network found around
the country serving 98 percent of the counties, 24 percent of all persons in poverty, 13 million low-
income individuals, and 4 million families. Community services are truly a work in progress.

When I walked in today, I saw the paintings of Mr. Perkins, Mr. Goodling, Mr. Ford, and
Mr. Hawkins behind me. Each one of those members was involved in developing the Community
Services Block Grant and improving and supporting the Community Services Block Grant.

In 1998, we requested to this Committee, for instance, and the counterpart in the Senate, to
help mandate and develop a better accountability and modern management tool for local agencies.
We are very proud of that new system. It is called Results Oriented Management Assessment,
ROMA, which CAAs are pioneering locally. The system is capturing the outcomes for more than
200 programming combinations invested in more than 4 million families and their communities.

My testimony has a definition, and an explanation of ROMA, but it also helps us

understand the program. Even though we are proud of how CSBG works, we think that there are
ways it can be improved. I have summarized my amendments in my testimony. We have the
specific amendments, but I think we need three categories of amendments:

One, amendments ensuring that the three fundamental purposes of CSBG are clearly stated
and distinguished from public policies of contemporary concern to Congress.
 16

Second, amendments ensuring the community services system have 21st century
management and accountability systems at the Federal and State levels as well as at the community
level.

Finally, an amendment providing flexibility in determining CSBG eligibility so that

participants in CAA programs that support low-wage workers' efforts to become economically self-
sufficient are not disqualified from the programs as soon as they begin working in entry level jobs.

Mr. Chairman, I would like to briefly mention LIHEAP. LIHEAP is a good program. It is
a necessary program, as you have heard from the other witnesses. I will say two things on
LIHEAP. I realize that there are questions regarding the LIHEAP formula, but the fact is that
LIHEAP is grossly under-funded. The Sun Belt needs more money. Other regions in the country
need more money and say they are either very under-funded or grossly under-funded.

We strongly support many in Congress' desire to get LIHEAP at $3.4 billion. There is
nothing in LIHEAP that a little more money would not solve.

Second, we feel the performance of the LIHEAP program in a number of States and the
Federal oversight of the programs are inadequate and must be addressed with stronger statutory
direction. Many States have excellent programs and have proven, effective leadership.

You have got an opportunity on this Committee to move both LIHEAP and CSBG in a very
strong, bipartisan way. Both programs play an important role in the lives of the poor, both
programs can be improved and both programs are very much necessary in helping define America
as a society.

Thank you, Mr. Chairman.

WRITTEN TESTIMONY OF MR. DAVID BRADLEY, EXECUTIVE DIRECTOR, NATIONAL

COMMUNITY ACTION FOUNDATION, WASHINGTON, D.C. SEE APPENDIX H

Chairman Castle. Thank you, Mr. Bradley.

Let me thank all the witnesses for your testimony. We will now turn to the members for
our questions. I will start by yielding 5 minutes to myself.

I sense some sort of conspiracy going on out there, because everyone is talking about $3.4
billion and I am not exactly sure I understand where it is coming from. At least three of you
mentioned it; that makes me a little suspect about where this specific number coming from. I want
to discuss that number a little bit, if we can, in a couple of contexts.

One is, why that number? I think, Ms. Lee, in your written testimony, I saw that it would
increase the eligibility from 16 percent to 34 percent of households. Would that be a correct
statement?
 17

Ms. Lee. Yes.

Chairman Castle. Of the households in America?

Ms. Lee. It actually would go from 20 to 40 percent. It would double the amount.

Chairman Castle. My concern is, what is a reasonable cutoff? This question is for any of the
three of you who testified about $3.4 billion number. What is a reasonable cutoff?

At some point we assume responsibility for our own abilities to pay our phone bills and
cable TV, heat and cooling and whatever it may be. Obviously, we are trying to help with poverty;
we are all committed to that. On the other hand, we obviously cannot afford to do everything.
Why was that higher figure determined?

In a moment, Dr. Drake, I am going to ask you about the formula with respect to the
cooling and the heating aspect. I am curious as to how that number was selected. Frankly, it is
common for people come before us, they ask for more money hoping to get some more, but why
was that particular figure picked and is it really more than is a reasonable request?

Ms. Lee. I do not feel that the figure is more than a reasonable request. I could defer to one of the
other panel members, but even with that amount, we are still not reaching 50 percent of the eligible
population. That is the way that I looked at it.

Chairman Castle. Are you turning people away in Delaware now?

Ms. Lee. Yes.

Chairman Castle. Who are eligible for assistance?

Ms. Lee. Yes, we are.

Chairman Castle. When you say that you serve 13,179 households, is that truly what that is,
13,179 households, not 13,179 services?

Ms. Lee. No, actually there are about 20,000 units of service, which would include the number of
households served for the regular program, cooling, some weatherization and crisis; but actual
households, 13,179. Then they may get an additional benefit, which duplicates and pushes us up to
about 20,000 units.

Chairman Castle. Are you suggesting that you are turning away requests of people who are
financially eligible, but you cannot accommodate?

Ms. Lee. Yes. For the heating program we did not have to turn anyone away, but for the other
programs, the crisis program, we had to turn people away, and for our summer cooling program,
we had to adjust eligibility. Eligibility is at 200 percent of poverty, but in the past we had
automatic eligibility for those who were income eligible if they were elderly and disabled, or for
 18

those who had a special note from a medical doctor saying that someone in the house needed the air
conditioning.

This year we are not able to help them with their electric bill if they are not elderly or
disabled, because we are not going to be able to assist all of the persons that come in; and rather
than have a cutoff, we just eliminated them from eligibility.

Chairman Castle. Let me move on. I would love to keep talking to you, but I have only 5
minutes. Let me move on to Dr. Drake for a moment.

I have heard this priority question in other reauthorizations and the concern that we need to
do more with respect to the cooling aspect of it. I think you pretty much directly stated that in your
testimony, and I think Mr. Bradley alluded to it a little bit in his testimony.

If you could either make a suggestion with respect to that or tell me your concerns, so we
can know exactly what we should be looking at?

Dr. Drake. Certainly.

The distribution formula that is most in effect because of the level of funding, which is the
old formula I referred to, similar to the 1980 formula, is the 1981 formula. Under this formula,
there are a lot of components within, but primarily what really hurts our States is the heating
degree-days are squared. That just generally pulls it up to the Northeast and upper Northwest
States. We do not feel that we should have more or have the formula based on the heating and
cooling aspectsin other words, energy cost, and based on that and people's ability to pay rather
than base it on the weather.

Chairman Castle. Let me jump on quickly. I would like to pursue this later, but let me go to Dr.
Nelson for just a moment because you said something about CED that caught my attention. You
stated that we need to continue to help clarify the law and you need some small changes made
regarding reinvesting in neighborhoods after the dollars have been recycled.

What are your limitations there? What changes should we specifically be considering in
order to help with the problem that you have pointed out?

I think I understand it, but I would just like to see if I could get it clarified.

Dr. Nelson. There has been a significant problem, an example being of T.Q., which once the
equity investment in that company was bought out by a larger company, recycling those dollars
with the same purposes in mind of reinvesting and creating jobs in the community. This problem
had to get clarified in the law, in the regulations, or in the appropriation bill.

Chairman Castle. What happens to those dollars if they are not recycled now? What happens to
them when they are returned upon the buyout?
 19

Dr. Nelson. We did get it clarified in the appropriation, but we would like to see it put into the law
so that it does not have to get clarified every year in appropriation.

Chairman Castle. Thank you. Ms. Woolsey.

Ms. Woolsey. Thank you, Mr. Chairman. And thank you. What an informed, wonderful group of
people you are. You should write our reauthorization. So follow it closely and make sure it does
what we need it to do.

Where I liveI live in Petaluma, California; we were the first city in the country to have
try to have reasonable growth control. We had to go to the Supreme Court to make that happen.

You can imagine what the fear was: growth control, so there will be no affordable housing,
certainly. And I was on the city council at that point, so I get some credit for this, but because our
heart was in the right place, we really intended to have low- and very-low-income housing, and we
have done it. We set goals that at least 20 percent of our housing would remain in low andnew
housing would be low- and very-low-income housing. And because of the Community Service
Block Grants, leveraged with development fees, we have exceeded that number every year, and we
have got single family units, we have got multiple units, we have got units with child care centers
in the middle of them that work in a fairly high-income area.

It is an example to the country of what you can do with the right use and the flexibility of
how to use your block grants. If we ever have another hearing, I am going to bring the housing
director from Petaluma to tell us how they do that.

David, one of the National Community Action Foundation's goals for CSBG is to add new
language to the purposes and goals that are, quote, "distinguished from public policies of
contemporary concern to Congress." I am not smart enough to understand that. Will you explain
that to us?

Mr. Bradley. I think in the last decade or so, there have been some who view the program more as
a State resource rather than as a community resource. What we have seen, through the nature of
whom we serve, is change, particularly working poor. We have seen Community Action Agencies,
the institution of Community Action Agencies become so widely accepted around the country.

I go back to Mr. Rumsfeld's definition of community action. I think he hit it on the head in
terms of what this program is all about at the community level. We would like to reemphasize the
community roots of this program and its importance in communities.

Ms. Woolsey. What would you do? How? What aren't we doing that makes that not possible?

Mr. Bradley. I think that we need to look at is the original mission in CSBG and broaden it to
reflect more of community control, more of community responsibility, resources, to emphasize the
community nature of the program. We have specific language that we have given the Committee
that we are interested in.
 20

Ms. Woolsey. Would it help in increasing the funding that the, I believe it is the national energy
program recommendations haven't raised the funding for LIHEAP. Would it help if we passed any
new funding right straight through to the communities and bypass the States?

Mr. Bradley. We are always in favor of that, but other people in Congress are not.

Ms. Woolsey. Whoops, I feel an amendment coming.

Mr. Bradley. A couple of things:

You are absolutely right, the Congress, the House in particular, did pass in their Energy
Policy Act of 2003, the $3.4 billion level for LIHEAP; and the Markey-Pickering Dear Colleague
letter on Labor-HHS appropriations did refer to that $3.4. The Community Services Block Grant is
funded at $650 million. It most likelydespite the Administrations $155 million proposed cut
this year; will be frozen after the appropriations process all works out. It was frozen last year. In
this environment we are thankful for that.

As the Congresswoman knows, I go around the country quite a bit. I really underestimated
the number of working poor and TANF leavers that are flooding our system. It was a serious
mistake on my part.

As everyone else is going to make arguments for money, I think the program could use
additional funds but I also think what this program desperately needs is a new initiative.

Mr. Castle referred to all the other pieces of legislation this Committee deals with. The
Community Action Agency network, all 1,100, would love to be part of a new national initiative
that gives additional recognition, responsibilities and after those, additional resources.

The program has some needs. It has some changes in the legislation that need to be made to
make the program more effective and stretch the dollars even further.

Ms. Woolsey. Just a short question, Mr. Chairman. By freezing funding, aren't we really saying
we are cutting funding?

Mr. Bradley. Correct.

Chairman Castle. Thank you, Ms. Woolsey.

We will now yield to the gentleman from Nebraska, Mr. Osborne, for 5 minutes.

Mr. Osborne. Thank you, Mr. Chairman. Mr. Ehlers has to leave for another event, so I am going
to yield a minute of my time to Mr. Ehlers at this time.

Mr. Ehlers. I thank the gentleman for yielding, and I am sorry I have to leave for another meeting,
but I just have a quick question regarding LIHEAP.
 21

Part of the current law provides for weatherization. What percentage of your budgets, if
you can just go down the line, is spent on weatherization and how much is spent for meeting
energy needs? Mrs. Lee?

Ms. Lee. It varies in the State of Delaware. This year, 12 percent of our budget went to
weatherization, and we can go up to 15 percent. In some years, many years actually, we have gone
up to 15 percent; other years it has been lower.

Mr. Ehlers. Dr. Drake?

Dr. Drake. That would be up to individual States, and since we have 16, I would not be able to go
down through the list right now. But we could provide that for you if you would like.

WRITTEN DOCUMENT SUBMITTED FOR THE RECORD BY DR. CAROLYN C. DRAKE,

DIRECTOR, SOUTHERN STATES ENERGY BOARD, WASHINGTON, D.C., AT THE
REQUEST OF THE HONORABLE VERNON EHLERS, SUBCOMMITTEE ON EDUCATION
REFORM, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF
REPRESENTATIVES SEE APPENDIX I

Mr. Ehlers. I would very much appreciate it if you could.

Does anyone else wish to comment?

Mr. Tubbs. Yes. In Alabama the LIHEAP appropriation is 15 percent of 15 million. It can be
changed if we receive an emergency appropriation and do not spend down our winter dollars.
Summer is not a problem; we spend our summer money.

Mr. Ehlers. Are you using the entire 15 percent?

Mr. Tubbs. To supplement the DOE weatherization program, yes, sir. We have, as with a lot of
States, quite a number of substandard homes, especially elderly and families with children; These
substandard homes it do complement the DOE weatherization program, which is about a $4.5
million appropriation in Alabama. It makes a huge amount of difference.

Mr. Ehlers. Mr. Chairman, I just wanted to make a comment. I think it is a much better practice
to reduce the need for energy funding than to continue to pour money up the smokestacks of the
homes. I hope we can take a look at how much is allocated for weatherization, what the impact is,
how it is used, and whether or not we can increase that to make a more effective program.

With that, I thank the gentleman for yielding.

Chairman Castle. We will not hold this time against Mr. Osborne. But would you yield to me a
minute for a follow-up question to that?
 22

Two of you cited 15 percent. Is there something in the law that has a cap of 15 percent for
weatherization?

Ms. Lee. Yes. You can ask for a waiver of up to 25 percent, but the cap in the law is 15 percent. I
did find out that nationally it is about 10 percent of the LIHEAP money that goes to weatherization.

Mr. Ehlers. Mr. Chairman, a quick question. I am not sure that is in the law. It may be in the
regulations.

Chairman Castle. Okay. We will look that up.

Mr. Tubbs, would you like to comment on that?

Mr. Tubbs. I believe in our State, as best I understand, it works in partnership with the State
administration that helps monitor these programs. This is in cooperation with the State as a
monitor and oversight group.

Chairman Castle. Okay. Thank you.

Mr. Ehlers. Thank you very much.

Chairman Castle. Okay. Thank you very much.

Unless there is an objection, can we start the 5 minutes over again for Mr. Osborne?

Mr. Osborne. Thank you again, Mr. Chairman.

As you know, we often get asked for more money. One question I would like to ask all of
you, maybe starting with Ms. Lee, is, what changes or recommendations do you have to improve
the efficiency of LIHEAP? What can we do to make the money we currently have go further?
Are there any things that we can do to streamline the process?

Ms. Lee. One of the things that we are working on right now, the NEADA organization is in the
process of preparing to do a study this summer and fall, and it is modeled off of a similar study that
was done in the State of Iowa back in 1999. This study determined how many LIHEAP households
were choosing between foods and medicines and providing heat. We are hoping that the results of
this study would help us to come up with better programs and more innovative ideas.

At the same time they are going to be looking at the best practices and sharing them with
other States so that we can look at what it is that is going on elsewhere and adopt them to our
individual States.

Mr. Osborne. Are there any other comments? I understand one of the problems must be that there
is an inequitable distribution of funds based on heating and cooling and that maybe that formula
could be altered in some way. I think Dr. Drake was referring to that.
 23

I am assuming that the regulations bind you in some ways; is that correct?

Dr. Drake. Yes.

Mr. Osborne. Okay. Mr. Tubbs, did you have a comment? Or Mr. Bradley?

Mr. Bradley. I think that there are a number of changes that should be considered for LIHEAP.

One, the legislation should allow working families and the elderly to apply for LIHEAP
without having to go either to welfare, TANF offices, or to use the computerized system.

We need to make sure that the States are getting the lowest-cost fuel in return for the direct
transfer of millions, or tens of millions, of dollars to energy vendors.

We need to provide incentives to customers who pay their bills. In fact, some LIHEAP
programs are set up to do exactly the opposite.

Finally, we need to ensure that LIHEAP participants are afforded the information and
services that can change their long-term energy situation and their level of self-sufficiency.

I believe there are some very specific changes that should be considered for LIHEAP.

Mr. Osborne. Could you please restate your last point?

Mr. Bradley. Ensure that LIHEAP participants are afforded information and services that can
change their long-term energy situation and their level of self-sufficiency. A majority of the time
education can help stretch those dollars further and make a big difference in families' lives.

Mr. Osborne. All right. Thank you. Those suggestions are all extremely helpful to me.

I have one other question and I would like Dr. Nelson to answer it. We continually have
some debates here about faith-based initiatives. My understanding is that you said that you had
400 employees and with hiring the law allows faith-based organizations to allow religious
preferences to enter into the system. I was wondering how this impacts your organization.

Does it make any difference as to how you operate? What are your views? I am interested
to know because we get philosophical arguments back and forth. We seldom talk to somebody
who is out in the field actually experiencing how this works.

Dr. Nelson. Well, remember we are a 24-year-old faith-based organization, so long before this
whole debate came up; we were very clear about it. We are a community development corporation
as well, so we give hiring preferences to people from the community. We are also very clear about
the fact that we are a faith-based organization.

Our mission statement is that passage from Isaiah that talks about justice and compassion as
the way to a healthy community. But we do not discriminate against people who do not share our
 24

faith. We say, this is who we are, this is the motivation, and can you feel comfortable and agree to
this mission, this central purpose of who we are? If you cannot, if you do not feel comfortable in
this setting, then we are probably not the right place for you.

We do not discriminate. We have people of many different persuasions as our employees.

Mr. Osborne. Okay. Thank you.

One last question, Mr. Tubbs: You mentioned the Fatherhood Initiative. My feeling is that
a lot of the problems you are dealing with are related to the fact of a father absence. When the
father is present, a lot of these things do not happen.

What weight do you give to the Fatherhood Initiative and do you see it being effective or
not?

Mr. Tubbs. We have three agencies out of 22 that have Fatherhood Initiatives. The goal there is
obviously to include the father in the life of the family, the life of the family with children. It has
made a significant difference.

Many in the population that we are trying to reach are people who have been incarcerated;
they are released from prison, and it is obviously difficult to reconnect. At least involving the
father again has made a good deal of difference in our studies.

Congressman Rogers' district has a fatherhood initiative in it, and it is beginning to bear
fruit. It is again in its infancy. It is a year or so old. It is a $50,000 program in one county; so it is
like a drop in the ocean, but it at least is making an impact in 8 or 10 young men's lives,
reconnecting them to that family, seeking better employment, meaning employment at all or
seeking better employment opportunities, and providing for child support. In some cases actually
reconnecting the man back to the family.

I would say it is making a good deal of difference. It is an attempt that is beginning to show
some results.

I would say that obviously, in principle, it is a wonderful program; in practice, it is a

beginning program. But I believe it is something that is going to need propping up to continue.

Mr. Osborne. Thank you and thank you Mr. Chairman.

Chairman Castle. Thank you, Mr. Osborne. The gentleman from Arizona, Mr. Grijalva, is
yielded to for 5 minutes. He has no questions.

And the gentlewoman from Georgia, Ms. Majette, is yielded to for 5 minutes.

Ms. Majette. Thank you, Mr. Chairman.

 25

And thank you, all of the panelists, for being here today and for the wonderful work that
you do across this country to help make the lives of our citizens better. I share your concern about
the inadequate funding for these programs. And I note that in the testimony of Mr. Bradley and a
couple of others of you, as well, that there needs to be more funding directed toward the cooling
season as well as the heating season. Is that correct?

Mr. Bradley. Yes, without taking it from the heating season.

Ms. Majette. Without taking it from, and so essentially what you are asking for is an increase of
funding. And I note that you, as approved by the House in H.R. 1644so you would want $3.4
billion in funding; is that correct?

Mr. Bradley. That is the figure that is being used in energy policy deliberations, whether it is
heating or cooling, that is the Markey-Pickering approach on appropriations. That is a figure that a
number of people on the Senate side are interested in as well, 3.4 billion.

Ms. Majette. Is that a figure that you think would be sufficient to meet the needs as they currently
stand?

Mr. Bradley. You and I probably spend 4 percent of our income on energy costs. If that were a
goal to get energy costs for the poor down to 4 percent, to put it in perspective, the working number
is $20 billion. So 3.4 goes a long, long way.

I happen to agree with Mr. Ehlers' comments. I strongly, strongly favor investing in
weatherization alongside of LIHEAP. It is the most effective way of stretching dollars out.

Ms. Majette. I see other members of the panel nodding their heads.

Does everybody agree that weatherization, increasing the funding for weatherization would
be a more effective way of utilizing the funding that is available? Or do we justdo we need to
increase it on both ends.

Ms. Lee. Both programs.

Ms. Majette. For both programs?

Ms. Lee. Yes.

Ms. Majette. Everybody agrees, both programs?

Ms. Lee. Not in lieu of.

Mr. Tubbs. Well, if you increase LIHEAP, if that 15 percent is doubled, then obviously you
provide more funding. In Alabama, that would be multiplying 2.5 times 2, so doubling the amount
of LIHEAP appropriation would give us $5 million for weatherization, not 2.5.
 26

Mr. Bradley. However, a $100 million investment in LIHEAP on Labor, HHS appropriations,
which is going to be tough and probably will be an amendment, an Obey amendment on factors in
LIHEAP versus the same or even half of that on Interior appropriations for weatherization, in terms
of improving the long-term quality of life of that family, I would take the choice of investing in
weatherization every single time.

Ms. Majette. Okay. Thank you. I yield back.

Chairman Castle. Thank you, Ms. Majette. The gentleman from Illinois, Mr. Davis, is
recognized for 5 minutes.

Mr. Davis of Illinois. Well, thank you very much, Mr. Chairman.

I feel somewhat fortunate in that Mary Nelson is a member of the panel, and I have spent a
great deal of my time, energy, and effort looking at low-income communities and low-income
programs; and of course, as far as I am concerned, I don't know any organization, any individual, or
any person that has been more adroit, more effective at dealing with these issues than Bethel New
Life.

It doesn't seem like it has been 24 years. I mean, that means that both of us are getting
older. I mean, we have been associated so long, looking at the issues.

I am trying toand I certainly agree with the line of questioning relative toit is kind of
like saying that an ounce of prevention is worth much more than a pound of cure in terms of
weatherization. I mean, if you can help individuals not need more energy, then obviously you are
going to do well.

But the question that I really want to ask: Since all of you work with low-income
communities and low-income people, what would you really consider to be the greatest need
facingif you look at urban, inner-city communities where there is obviously a great need and you
look at rural communities where there is a great need, if you dissected those, what would you
consider to be the greatest amount of need that organizations like yours can really deal with?

We can just maybe start with Ms. Lee.

Ms. Lee. Okay. This is how I feel personally. I just feel like people's basic needs should be met:
Food, shelter, heating, and cooling. If their basic needs are met, then it is easier for them to go
about doing things to improve their life and focus on self-sufficiency and maintaining self-
sufficiency. But it is hard to attempt to be self-sufficient when your basic needs are not met, like
food, medicine, rent, heating, and cooling.

Mr. Davis of Illinois. Is there a place to start?

Ms. Lee At the beginning. You begin with the shelter, and you go from there.
 27

Dr. Drake. I would just like to add to what she said by stressing the fact that even if you increase
this funding to $4 billion, you are still excluding a lot of eligible people because right now, we are
only serving 1.5 individuals out of every 10. Even doubling the funds would still not be anywhere
near serving all of those who are eligible. The States would still have to make choices as to how
they spend the money.

Dr. Nelson. Starting with the notion of energy-efficient affordable housing, we build single-family
homes in Chicago where we guarantee that the heating bill will not exceed $200 a year. That took
some changes in the building codes. It took some clever financial arrangements to make those
homes affordable. But that would make a major difference.

The way that people then can own homes is by having living-wage jobs. We have a lot of
working poor people in this country for whom a large heating or energy bill just throws them out of
kilter, even though they are working two and three jobs just to make a living.

I believe the long-term impact needs to be an education, because it really makes a

difference. If our schools were doing their job, having kids graduating with the tools and the
learning knowledge to make a living, the living-wage jobs would become more readily available, in
turn helping people afford their homes.

There are short-term steps and then there are long-term ones.

Chairman Castle. This Subcommittee works on those issues too.

Mr. Tubbs. Congressman Davis, because it is such a complex issue, I do not think there is one
answer. But one thing that the programs we try to manage do is, they do not address just the
consequence of poverty, they address cause. I think that gets to the root of your question.

As you can see, cause can vary. It could be senior adults who have no retirement because
they worked at a textile mill all of their lives and retired from minimum wage jobs. It could be that
they just may be hungry or that they just may need senior companionship. We have programs that
reach out to them and do that.

It could be a young mother with children, whose husband is incarcerated. Her problem may
be adequate shelter and a better opportunity for her children to be better educated. In an urban
area, it could be a housing issue because of the un-affordability of the housing market.

We start where they are. I think the uniqueness of community action allows us to do that.
Our people represent the entire community and because of that, we have a better chance, of
addressing the very real need, whether it is urban, rural or mixed, because we have that, too; as I
am sure you do in Illinois.

Mr. Bradley. Mr. Davis, I think it isthere are two levels of answer to your question. One is in
terms of what the poor need; it is the logical level, including jobs and living wage. It is health care,
it is housing, and it is opportunity.
 28

For the agencies out there, I think that there is another fundamental desire that needs to be
answered, or question that needs to be answered, that I am finding all around the country. This is a
question of whether the Federal Government is truly going to remain a partner in delivering social
services and addressing poverty in America.

There are a lot of questions that have sent a chilling effect throughout the country in terms
of the future of these programs. I think the number one need is to get some kind of consensus on
the role of government, although it is very difficult to do. It is out there.

Mr. Davis of Illinois. Thank you very much.

Mr. Chairman, I want to thank you for your leniency in terms of letting the time go for them
to answer.

Chairman Castle. Thank you, Mr. Davis. Actually, they were interesting answers to an
interesting question.

We will now go to Mrs. Davis of California for 5 minutes.

Mrs. Davis of California. Thank you. Thank you, Mr. Chairman.

Thank you, to all of you, for being here. If I might just follow up on my colleagues'
question, could you perhaps talk about what other programs are impacted by the grants you receive
or, in fact, what programs help make your dollars go further? One program I have in mind,
AmeriCorps.

I do not know to what extent you rely on AmeriCorps, but I think sometimes when wewe
don't want to look at the community service block grants in isolation necessarily, because I suspect
that they are hurt or helped by what else is going on in the community. You might talk a little bit
about coordination as well.

But I am wondering howyou know, is there another major program that is impacted that
helps you or hurts you if it goes away? How do we assess that and further discussions that we
might be having?

Dr. Nelson. I would like to respond to that.

Obviously, it is like a jigsaw puzzle. You are always trying to piece together all of these
little things to make it work in our neighborhoods, and so AmeriCorps is one of those pieces.

We use AmeriCorps, locally recruited AmeriCorps volunteers, to help us do financial

education and the program called "Smart Savers." Currently, we are trying to go into the high
schools through our employment services and everywhere else in our transitional housing, focusing
on basic financial education, for those who are able to move on into the savings accounts and doing
that.
 29

None of this would be possible without the help of AmeriCorps volunteersthere is no

money in it. There is no way to support employees, so for the long term in this country, volunteers
are extremely important for self-sufficiency of people.

Mrs. Davis of California. Are you saying that if funding for AmeriCorps went away, if you did
not have those volunteers, what would happen?

Dr. Nelson. We would not be able to do it. There just is no way to do that. We try and raise
dollars to match those savings accounts, because it is really critical to have the dollars to provide
some incentives on those savings accounts. It would be very difficult to also try and raise money to
support those salaries.

Mrs. Davis of California. Do others want to respond? Mr. Tubbs or Mr. Bradley?

Mr. Tubbs. At the local level we have agencies that are involved in earned income tax credit and
tax preparation for low-income people. These agencies provide free tax preparation rather than pay
the guy down the street who is going to charge you, and then advance you and charge you for that,
too. We have found that we have created a trust with the very people that we need to be serving
and we need to grow that opportunity.

They trust us to point them toward meaningful opportunities for employment, not chasing a
dream. They trust us to help them get linked up to employment or an education opportunity
through workforce investment dollars. The referral that is made through Community Action
becomes then a stepping-stone up and out of poverty.

It is not a direct emergency service like a one-time payment on a high-energy bill. It is

certainly a good idea to manage them as an individual or family, as if you were making a case
toward some level of success. You are looking to kind of address the whole need in that case.

If the need is housingwe have programs where people are involved in building their own
homes, sweat equity in their own homes and so this is a wonderful program. They could never do
that on their own. They would never even know how to do that on their own. So this allows them
some measure of opportunity that way.

Sure, it pops up in many other programs. It extends itself over into those other programs.

Mr. Bradley. Of the 1,100 agencies, I am willing to bet that probably somebody runs every low-
income program and some community action agency administers that. When other programs are
impacted, it is either community services block grant funds that are thrown into the breach or
CSBG-funded administration to work on a strategy to deal with that problem to get additional
replacement funds, et cetera.

For instance, community action agencies in New Hampshire run the WIA system, the
Workforce Investment Act. They are the one-stops. When dislocated workers' funds are cut, or
they run out of dislocated workers, the governor still comes to the community action agencies and
 30

tells the Agencies to figure it out.

We still have plant closings. We still need you to help. AmeriCorps, I have got dozens of
calls from community action agencies, a lot in California, regarding this program.

Mrs. Davis of California. Do you have any thoughts about how we could better quantify that? I
don't know whether it would necessarily be in the reauthorization, but it worries me that that gets
lost, totally lost, in this discussion. And I don't know whether we need you all in some ways to
help us to quantify that to be more outspoken about it, so that people can really understand what is
going on here.

Mr. Bradley. I agree, but I think that since the mid-1980s, and I was literally involved in the first
4-second discussion with Senator Stafford and Senator Weicker about creatingthen what we
were going to call it a community action agency block grant. I have been around since 1981that
we have had to do this.

We have tried, through reauthorization on a bipartisan basis with both branches engaging,
to ratchet up the data, the information, we knew about this. In the 1980s, with David Stockman at
OMB, the strategy was, do not collect any information. If you do not know what they are doing,
you cannot defend it for funding.

So every reauthorization, we require a little bit more out of the Federal Government, out of
our Federal partners. It seems to me requiring them to look at this network and some of the impact
of other decisions that affect low-income communities and low-income population is not a bad
thing to do.

Mrs. Davis of California. Thank you.

Thank you, Mr. Chairman. Perhaps we might take a look at that because I think that
sometimes we isolate some of the figures and the programs.

And may I ask one more question, briefly?

Chairman Castle. Sure, one more question.

Mrs. Davis of California. Thank you. It would just be to Dr. Drake.

You mentioned the LIHEAP and the emergency funding. Coming from San Diego and
from California and understanding the energy crisis that we experienced and the need to help out
those low-income families who, prior to that sharp rise in prices, really didn't need the help; and so
I am wondering, in terms of the formula, how can we best quantify that? How do we deal with, in
these crises, changing the way that we look at that issue? Because higher prices come out of the
blue in some cases.

Dr. Drake. Certainly.

 31

The formula that I mentioned in the statement, and it is in your written, prepared statement
was described as the "near-ideal formula." This formula takes into account if you had sudden
changes in your energy costs. That is why it is this near-perfect formula, because there are times
when certain things are going to increase over the short term, but maybe not the long term, that you
would want to take into account. I think that is very important.

Going back toI am not sure how much of the emergency money that you actually
received in California at the time, because I believe when the emergency money was finally
released, many of our southern States did not get any. I do not know if that was the case in
California or not. A lot of the formula is based on colder-weather States, and California is one of
the States like the southern States, that would benefit a great deal from a change in the formula or a
change in the approach.

We are willing to leave it like it is up to the first 1.975 billion and then increase the funding,
where we would realize a gain over and above the 1.975 billion, and no State would be hurt in that
way.

Mrs. Davis of California. Thank you, Mr. Chairman.

Chairman Castle. Thank you, Ms. Davis.

And that brings us to a close. Let me just stress how important this panel has been to us.
This is a Subcommittee that has had a lot of different issues that we have been managing
throughout the course of the year. To sort of go from one subject, like Head Start, to this, it is not
always easy.

You are the pioneers for launching us off into the subject for this reauthorization this year,
and we appreciate it. I thought the question-and-answer session was particularly useful today.

We appreciate your testimony and your presence and we will certainly take all of this into
consideration as we go through the reauthorization process and we thank you for being here.

Unless there is anything further, we stand adjourned.

[Whereupon, at 4:30 p.m., the subcommittee was adjourned.]

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TABLE OF INDEXES

Chairman Castle, 2, 4, 5, 7, 9, 10, 12, 14, 16, 17, 18, 19, 20, 21, 22, 24, 26, 27, 28, 30, 31
Mr. Bradley, 7, 14, 19, 20, 23, 25, 26, 27, 29, 30
Mr. Davis of Illinois, 26, 28
Mr. Ehlers, 20, 21, 22
Mr. Osborne, 20, 22, 23, 24
Mr. Rogers, 6
Mr. Tubbs, 12, 21, 22, 23, 24, 25, 27, 29
Mrs. Davis of California, 28, 29, 30, 31
Ms. Drake, 9, 18, 21, 23, 27, 30
Ms. Lee, 7, 17, 21, 22, 25, 26
Ms. Majette, 24, 25, 26
Ms. Nelson, 10, 18, 19, 23, 27, 28, 29
Ms. Woolsey, 3, 5, 19, 20