On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA), sometimes referred to as the “Obama stimulus funding.” Among the bill’s many provisions was a $5 billion allocation over three years to the Weatherization Assistance Program. Since the U.S. Department of Energy (DOE) has historically funded the weatherization program at between $210 million and $230 million per year, the $1.6-billion-per-year stimulus funding was a sevenfold increase over the usual funding level.
The federal weatherization program is now 37 years old. The program pays for weatherization specialists to perform air sealing work, to add insulation, to seal leaky duct seams, and to replace inefficient appliances in the homes of low-income Americans. The services are provided at no charge to recipients. The weatherization program is administered by state employees; in most states, however, the actual weatherization work is performed by employees of local nonprofit groups known as community action agencies.
The weatherization program has an excellent track record. Studies have shown that every dollar spent on weatherization yields about $2.69 in energy savings and other benefits.
The massive increase in federal weatherization spending received widespread attention in the press, including here at GBA. (GBA has written at least 30 news articles on the effects of the ARRA funding on the weatherization program; links are provided in the “Related Articles” box below.) But the national media have mostly neglected a more recent news story: in the years since the ARRA funds ran out, weatherization funding has fallen off a cliff.
By now, the program is in worse financial straits than it would have been if the stimulus funds had never been allocated. DOE funding for weatherization has plummeted to $62 million a year — less than a third of pre-ARRA funding.
“A budget-cutting mentality”
According to Bob Scott, the director of energy services at the National Association for State Community Services Programs, Congress was in no mood to maintain high funding levels for the weatherization program in 2012. “There was a budget-cutting mentality in Congress, and the idea was that weatherization programs should be able to maintain themselves through 2012 with $68 million, because the states still had some money in the pipeline,” Scott told me. “But then Congress passed a Continuing Resolution instead of a new federal budget. Now we are looking at a program that is one-third the size of the pre-recovery program. If there is no spending bill passed again by Congress this year, and that’s what most people are predicting, then the $68 million will be the benchmark for any Continuing Resolution going forward. It’s discouraging.”
(On March 14, 2013, a bipartisan group of U.S. senators who support the weatherization program wrote a letter to Steven Chu, who at that time was the DOE secretary, objecting to the sharp reduction in weatherization funding. To read more about the senators’ efforts, see “Senators ask Obama administration to help fund weatherization program.”)
Steve Payne, the managing director for the weatherization program in Washington state, explained the circumstances leading up to the current weatherization funding predicament. “DOE is getting caught in a budget stranglehold,” Payne told me. “Congress saw an opportunity to save. … The first year of the cuts, a lot of states had Recovery funding to tide them over. But once the dollars were gone, the states expected that funding would get back to normal. But Congress was using the Continuing Resolution to meet federal funding needs. So we ended up being held at a much lower finding level than we would have if the stimulus funding had never happened.”
“Everything came to a grinding halt”
According to Scott, local weatherization agencies are struggling in many areas of the country. “The reduced funding levels are certainly affecting the ability of states and local agencies to implement their programs,” said Scott. “Some local agencies will only be able to do a few jobs a year, and may not be able to stay in the weatherization business. In some of the smaller rural areas, it seems they won’t have a program unless someone travels in from a long ways away, and there are a lot of layoffs going on. … At some point, a state may have to decide if it will supplement the DOE funding with state funds, because with just the DOE funding they can’t even afford to pay one person to administer the program.”
One company that has been riding a roller coaster over the last few years is The Energy Conservatory, the manufacturer of the Minneapolis blower door. “After the ARRA funding, we got really, really, busy and had to hire people,” said Gary Nelson, the president of The Energy Conservatory. “The agencies had to spend the money in 18 months or two years. Our sales more than doubled for a year and half. Then everything came to a grinding halt. Sales are now down to below what they were before the ARRA funding. We hired seven people after the ARRA funding came in, and now we have laid off two.”
Nelson added, “I think a lot of the blower doors that were bought with government money are sitting in a closet somewhere, not being used.”
Nelson clearly found it painful to have to lay off employees. Be he is also aware of the larger picture. “A lot of the weatherization workers who had been trained lost their jobs, and now they have to do something else. This is stupid. It is a good thing to spend money on, but it would have been better to spend it over a longer period of time. I heard from people who should know that Obama’s intention was to keep the program going at ARRA levels, but then the Republicans had other ideas. They said, ‘Deficits will lead to inflation.’”
Trained workers are being laid off
Many of the people I spoke with when researching this story had “hiring and firing” stories. “Training was a huge part of the Recovery Act,” Scott told me. “The amount of training was very high and was a big investment. At one point there were 15,000 new jobs attributed to the Recovery Act funds. But the number of weatherization jobs has diminished greatly. There were a lot of trained people who are no longer in the weatherization program.”
I asked Michael Furze, the Green Initiative manager for the New Mexico Mortgage Finance Authority, about weatherization layoffs in New Mexico. “Yes, there were layoffs,” Furze told me. “That happened across the country. The people who had training ended up looking for work in the trades.” In a follow-up e-mail, Furze wrote, “The number of [weatherization] jobs at the height in New Mexico was 145, which includes our weatherization agencies, MFA state-level staff, and our Training Academy staff. We now have 27 employees.”
Brett Jackson, the program administrator for the Virginia weatherization program, also described layoffs. “At the local level, the ARRA funds resulted in probably three times the usual number of weatherization employees. Many agencies went from one crew to three crews. We saw a huge increase. But now the funds are spent. An agency just laid off ten people last week, and that was their third round of layoffs. In terms of state employees, we went from one employee before ARRA up to a staff of eight, and now we are going back down. We’re downsizing.”
Jackson continued, “There were some people hoping for a green boom. We put a billion dollars into training people nationwide, and now these people are going into work as laborers, if they are lucky. Many are unemployed. Very few have gone into the industry we trained them for.”
In a few states, including Vermont, DOE weatherization funds are supplemented by additional funds from state coffers or utility programs. Weatherization programs in states with diverse funding sources tend to be in better financial shape than weatherization programs that are 100% funded by DOE. “The ones who depend on DOE funding are the ones we are worried about,” Scott told me.
In response to the huge influx of ARRA funds, some states had difficulties ramping up their weatherization programs. Inevitably, stories of mismanagement and even corruption appeared in the news. Yet overall, the weatherization program has been a notable success.
“The seesaw effect in funding has certainly been a frustration for the program historically,” Payne told me. “Too many decision-makers saw the program as a failure instead of the real success it was. A million homes ended up being weatherized. There were some examples [of problems] that caught media attention, but they were a small fraction of the homes that were weatherized. It was ironic and unfortunate. The success of the program became a political football, at a time when the whole economy was going over a cliff. And now, because of the Continuing Resolution and Sequestration, the program is not getting the funding it needs.”
We have no energy policy
The legislative gridlock in Congress no longer raises many eyebrows. Our national budgetary stalemate elicits jokes on late-night television rather than voter outrage. But the de facto defunding of the weatherization program is just one element of a much larger problem.
For the past 40 years, ever since the oil price shocks of the 1970s, our country has lacked a coherent energy policy. While the governments of Sweden, Denmark, and Germany have made consistent investments that bring them closer to achieving their countries’ national energy goals, the U.S. has been lurching from one misguided incentive to the next, with a boom-and-bust cycle that creates and destroys industries with wanton abandon.
These days, thoughtful voices advocating a national energy policy are unlikely to find a sympathetic ear in Congress. Lobbyists appear to have the upper hand. As a result, the federal government has in recent years offered ill-considered incentives for equipment like ground-source heat pumps and for windows with low-solar-gain glazing (even in cold climates).
At a time when global climate change presents us with a historic challenge that will require a huge national investment in weatherization, we have spent tens of millions of dollars on worker training. But instead of taking advantage of the skills of these trained weatherization workers, we’ve decided to lay off thousands of them. In spite of the fact that weatherization agencies have long waiting lists of low-income families living in substandard housing, dozens of local weatherization crews are now downsizing or disbanding. We are in the process of gutting an admirable federal program with a proven track record.
If our legislators’ neglect can cause a fiasco on this scale, it’s hard to imagine that our country is equipped to face the looming climate challenge.
Martin Holladay’s previous blog: “Return to the Backyard Tape Test.”