Stimulus program to weatherize homes is falling short
We ended our last update on President Barack Obama's campaign pledge to weatherize 1 million homes per year by noting that we'd revisit the ruling should we find that the program fell short of its goals.
Over the last several weeks, multiple readers have e-mailed to ask if we're planning to revisit the promise, since reports were coming out that the Weatherization Assistance Program (WAP) wasn't living up to its expectations.
The most telling account of the program's progress is a report released by the U.S. Department of Energy in February 2010. The report provides two key conclusions. First, out of the $4.73 billion that the stimulus act provided for weatherization work, only $368.2 million had been spent. That's less than 8 percent. Second, of the 10 highest grant recipients, only two completed more than two percent of the planned units. Texas, for example, had planned to weatherize 33,908 units. As of Feb. 16, 2010, it had not weatherized any.
"In short," notes the report, "the Nation has not, to date, realized the potential economic benefits of the $5 billion in Recovery Act funds allocated to the Weatherization Program. The job creation impact of what was considered to be one of the Department's most 'shovel ready' projects has not materialized. And, modest income home residents have not enjoyed the significant reductions in energy consumption and improved living conditions promised as part of the massive Recovery Act weatherization effort."
What accounts for the slow start? The audit identified three categories of challenges.
First, because of a Depression-era law known as the Davis-Bacon Act, recipients of the weatherization funds had to pay the laborers a locally "prevailing wage." Problem was, very few states and counties actually knew what this prevailing wage was. In June 2009, the Secretary of Energy released a memo urging the fund recipients to begin the weatherization work anyway, while the Department of Labor was working out the wage determinants. If it turned out that the workers were underpaid, the state would pay them retroactively. Most states, however, "concerned with avoiding perceived administrative problems and burdens associated with retroactive adjustments to wages," chose not to begin the projects until the wage rates were formally established.
Second, the report notes that there were multiple state-level issues. In California, for example, furloughs created significant delays in implementing the weatherization program.
Finally, the Energy Department mandated that all of the project workers receive additional training. Again, budget shortfalls and furloughs caused significant delays.
The department said in February that it has cleared most of the hurdles and that the pace of weatherization should significantly improve. As of March 31, 2010, about 80,000 homes have been weatherized. That is 13 percent of the originally planned 593,000, according to the Government Accountability Office.
We'll keep watching how this unfolds, but for now, it's clear that the program has fallen short of its original goals. We are changing the rating to Compromise.
U.S. Department of Energy, Special Report: Progress in Implementing the Department of Energy's Weatherization Assistance Program Under the American Recovery and Reinvestment Act, Feb. 19, 2010
U.S. Government Accountability Office, GAO Releases Its Latest Report on the Recovery Act, accessed June 21, 2010
ABC News, Report: Stimulus Weatherization Program Bogged Down by Red Tape, by Jonathan Karl, Feb. 17, 2010
Obama keeps weatherization promise
Barack Obama started talking about wanting to weatherize more low-income homes long before the economic crisis. During the campaign, he mostly talked about it as a way to reduce the country's carbon footprint, reduce dependence on foreign oil and cut energy costs for low-income families. When the economy turned sour, he then emphasized that it also could create thousands of green jobs. That's how it got included in the economic stimulus package he signed on Feb. 17.
The weatherization program provides money to qualified homeowners for such things as insulation, smoke detectors and furnace and air conditioner repair or replacement. The Weatherization Assistance Program (WAP) estimates that residents save about $400 to $500 on energy costs in the first year after weatherization improvements.
Although Obama was criticized by some Republican leaders for including weatherization in the stimulus bill — House Republican Leader John Boehner said it had "no place in a bill designed to get our economy moving again" — the final $789 billion stimulus package included $5 billion to massively expand the WAP. The original House version of the stimulus bill included $6.2 billion for weatherization; the Senate version countered with $2.9 billion. House and Senate negotiators settled on $5 billion.
So is it enough to reach Obama's goal of one million homes a year?
"It'll get close," said Mark Wolfe of the National Energy Assistance Directors' Association, which represents state-run low-income energy assistance programs.
To give you some perspective, the WAP got $447 million from the federal government this year and expects to weatherize about 150,000 homes.
The agency that runs the program says it can, but it will take some time. According to a WAP estimate, the stimulus money will allow the program to reach 500,000 homes by the end of 2009; and then get to a capacity of 1 million homes a year by the end of 2010.
Provided Congress adequately funds the program beyond the stimulus package's two-year reach, the production could be maintained and increased for the next six years — averaging 1,250,000 homes for Years 3 through 8, the WAP report states. Those projections are predicated on the stimulus bill providing $4.5 billion in 2009, $9 billion in 2010 and $10.5 billion a year in subsequent years.
While the stimulus money falls below that, it should still allow the government to weatherize about 800,000 or 900,000 homes a year, Wolfe predicted.
"They stuck with it," Wolfe said. "The administration really pushed it. They could've taken $3 billion, but they didn't. The whole weatherization community was in amazement. This will really help people."
Although it's difficult to predict if the stimulus bill will fully translate to 1 million weatherized low-income homes a year, there's no question it will significantly expand the program and get in the range of 1 million, and it lays the foundation for meeting that benchmark in the future.
Should the program fall well short of its goals, or should Congress decide in future years not to continue funding the program at levels that will allow the weatherization of 1 million homes a year, we reserve the right to revisit our ruling. But for now, we're convinced Obama has held up his end of the bargain, so we're ruling this one Promise Kept.
Weatherization Assistance Program, Economic Stimulus Expansion Plan
AP, " Billions for weatherization in stimulus questioned ," by Andrew Miga, Feb. 14, 2009
U.S. Department of Energy, Weatherization Assistance Program
Weatherizing makes the stimulus bill
Certainly no one is happy that the U.S. economy is in such dire straits that policymakers are talking about a stimulus plan that could cost more than $500 billion. But an unintended benefit for Barack Obama is that the bill gives him a chance to make good on a number of his more expensive campaign promises.
Obama discussed the broad outline of his hopes for the bill in a speech at George Mason University on Jan. 8, 2009.
"It is not just another public-works program," Obama said. "It's a plan that recognizes both the paradox and the promise of this moment — the fact that there are millions of Americans trying to find work even as all around the country there's so much work to be done. That's why we'll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century."
Democrats in the U.S. House released a broad outline of what they hope to include in the 2009 stimulus bill and it contained many ideas Obama promised during the campaign, including $6 billion to weatherize "modest income" homes. Typically, weatherizing a home means improving its insulation and window seals so the home retains heat or air-conditioning better. This usually means utility bills drop.
Granted, this is still a proposal, and it's not clear how many homes will get the treatment. But it's concrete enough that we're moving the Obameter from No Action to In the Works.
New York Times, Barack Obama speech on the economy at George Mason University , Jan. 8, 2009