Winter heating bills loom as the next inflation threat
Last week, the Biden administration released 90% of the $ 3.75 billion in funds dedicated to the Home Energy Assistance Program for Low-Income People, which has provided an average of $ 439 to more than five million families in the year before the pandemic. It received $ 4.5 billion in additional emergency grants this year. Usually, program funding is not released until all budget items for the year are approved, but Congress recently made an exception as the cold months approach and spending continues.
Wolfe’s group urged Congress to include an additional $ 5 billion for the program in the social safety net being negotiated in Washington.
Rising home heating costs are sure to hover over economic debates in Washington over inflation. White House allies, struggling to push forward the president’s broad agenda, say the current spike in consumer prices primarily reflects the pandemic disruption that will dissipate next year. Federal Reserve officials, who have tried to put in place a less inflation-sensitive policy framework, will be pressured to assess whether this claim is correct.
The latest outlook from the National Oceanic and Atmospheric Administration suggests a decent chance of a milder-than-average winter. But according to projections by the US Energy Information Administration, if the winter is a little colder than usual, energy bills could increase by 15% for households heated with electricity, by 50% for those which depend on natural gas and 59% for those who mainly use fuel oil. Propane users would take the biggest hit – a 94% increase, or potentially hundreds of dollars over the six-month heating season.
As with other price shocks resulting from the pandemic, the pain will be particularly acute for those with limited means. Twenty-nine percent of those polled by the Census Bureau reported reducing or forgoing household spending to pay an energy bill in the past year.
Before the pandemic, Jamillia Grayson, 43, of Buffalo, had a successful event planning business. Her job dried up, and even with UI, she couldn’t meet household expenses while supporting her 8-year-old daughter, who suffers from sickle cell anemia, as well as an aunt. older, who depends on and lives with a home oxygen tank.
Electricity and gas bills piled up throughout this year, and by the end of the summer she owed $ 3,000, she said.