The Pew Charitable Trusts

Photo courtesy of the Weatherization Assistance Program Technical Assistance Center Weatherization workers learn how to insulate windows at a Boston area training center. States are setting up more centers like this to prepare for a major expansion of a 30-year-old low-income weatherization assistance program that just got a major boost in funding under the economic stimulus package.

When Obama administration officials selected economic stimulus projects, expanding a little-known home insulation program for low-income families was at the top of the list: It would help more needy families, cut pollution and foreign oil consumption and create thousands of new jobs.

What the White House didn't expect was the firestorm of criticism the $5 billion Weatherization Assistance Program has gotten from taxpayer groups and members of Congress who say it won't create jobs quickly enough and is susceptible to fraud and bureaucratic budget padding.

"It's just more of the same kind of wasteful spending that we have seen in the past," said U.S. Rep. John Boehner, (R-Ohio), Jan. 15, on PBS NewsHour.

Started in the wake of the 1973 OPEC oil embargo, the U.S. Department of Energy's weatherization program helps low-income families reduce energy costs by plugging air leaks, installing insulation and purchasing fuel-efficient furnaces. Last year, the federal government gave states $227 million, and states supplemented the program with $770 million more in state money, energy company fees and non-profit contributions.

Generally considered cost-effective - even receiving a seal of approval from the U.S. Office of Management and Budget in 2006 - the state-run program has improved energy efficiency by more than 20 percent in some 6.2 million homes since its inception. Last year, the program created at least 21,000 new jobs weatherizing 140,000 homes at a savings of $400 per household, according to Economic Opportunity Studies , which supports the local agencies that administer the program.

But the Obama administration wants to make the program bigger, weatherizing at least 1 million homes each year starting in 2012, and that has some worried that states won't be able to hire and train weatherization workers quickly enough.

This year, funding jumps to $450 million, and starting next month, states will get the first installment of an additional $5 billion in stimulus funds to be spent over the next three years - a nearly eight-fold increase in annual federal funding.

The program is expected to create 60,000 new jobs - 20,000 weatherizing homes and another 40,000 in industries that supply equipment and other materials. In addition, low-income families are expected to immediately spend the money they save on utility bills, further boosting the economy.

Taxpayer watchdog groups say, however, that $5 billion is too much money for states to spend that quickly and still maintain quality control and oversight. "There's all kinds of opportunities for mischief, both in eligibility and contracting fraud," said Leslie Page, spokesperson for Citizens Against Government Waste .

But weatherization officials say the 30-year-old program has built-in auditing and oversight and established contracting procedures.

"Sure there will be a few incidents of a worker fixing up his grandmother's home when she doesn't meet the income requirements and some contractors will do shoddy work, but that's why states are hiring more auditors to monitor those things," said Meg Power, Senior Policy Advisor with the National Community Action Foundation , which advocates for the local agencies that administer the program.

State officials readily admit that spending the avalanche of new money will be a challenge, but they say they are up to the task.

"It's a tall order, but states are taking a deep breath and gearing up to get it going," Power said. Nearly every state has a waiting list of thousands of eligible low-income homeowners who want the energy-saving improvements, so they're already starting to line up workers and order supplies.

Louisiana has purchased a dozen new trucks. Alaska is ordering insulation and other materials so they can start shipping them to remote villages as soon as the ice melts in May. And Wisconsin last week launched a weatherization "boot camp" to train out-of-work construction laborers and others to caulk, seal and perform high-tech energy audits. Other states are making similar preparations.

Alaska weatherization officials say they're not worried about how they'll use the $18 million in stimulus funding. Last year, when oil prices shot up, the energy-producing state got a windfall in oil revenues, part of which Republican Gov. Sarah Palin gave to citizens to defray higher fuel costs. In addition, the surplus energy revenue boosted low-income weatherization funding from $5 million to $200 million over a five-year period, and provided $160 million in rebates for mid- to upper-income homeowners who make the improvements on their own.

As a result, Alaska is well on its way to more than doubling the number of homes it weatherizes and the stimulus money - if lawmakers override Palin's recent decision to reject it - would require only minor changes in the production schedule, state officials said.

Similarly, Wisconsin's weatherization program is not likely to experience growing pains from its $142 million infusion of federal money, said Bob Jones, policy director for the Wisconsin Community Action Program Association . Starting in 2000, the state's weatherization budget rocketed from $12 million to more than $70 million in just a few years because deregulated electric utilities were required to start making hefty contributions to the program. Now Wisconsin has the largest per capita federal, state and private weatherization funding in the nation - making expansion under the stimulus program a relatively easy task, Jones said.

But for some Southern states, the ramp-up will be steep. Under the Energy Department's allocation formula, cold-weather states get more money than warmer states until federal funding levels reach $234 million. After that, federal allocations are mostly based on the size of the low-income population.  As a result, states with warm climates and a high percentage of people at or near the federal poverty level will see a bigger percentage increase in federal funding than many Northeastern and Midwestern states.

At Florida's Department of Community Affairs , the agency charged with handing out the stimulus money and coordinating the 29 local agencies that do the work, the administrative staff "is absolutely bamboozled with work," said department spokesman, James Miller. In a state that has operated its weatherization program purely on federal money at about $5 million per year, shifting gears to spend another $175 million over the next three years will be a challenge, he said.

So far, Florida has not begun hiring, but when it does, state officials said they expect to tap into the legions of unemployed construction workers in the state who are among the hardest hit by the housing crisis.

The Department of Energy has created a Web page , linking prospective workers to weatherization agencies in all 50 states, many of which already are hiring.

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