Michigan Gov. Rick Snyder (R)

In a letter to a Senate subcommittee, Michigan Gov. Rick Snyder (R) warned that the deep cuts to a federal heating assistance program proposed by President Obama would have disastrous consequences for his state’s poorest residents:

Governor Rick Snyder, together with state utility companies and social service agencies, is warning that federal heating assistance cuts proposed by the Obama administration would have disastrous effects across Michigan.

Congress is now considering President Barack Obama’s proposal to cut funding for the Low Income Home Energy Assistance Program (LIHEAP) by 50 percent.

The block grant program is a major part of the safety net in Michigan and the proposed cut would leave the state with $120 million less to help subsidize heating costs for 1.2 million low income households.

The Coalition to Keep Michigan Warm noted that cuts to the program “will increase the home energy burden for the more than 600,000 households who annually benefit from LIHEAP.” Snyder reminded the senators that “winters in Michigan can be brutally cold” and that without federal funds to help families pay for heating, Michigan will either have to “reduce the number of eligible recipients, or reduce the level of assistance to a point that would not cover one month of heating for this coming winter.”

Chronically high unemployment in Michigan has forced more families to seek assistance from the program in recent years. Nationwide, 8.9 million households received federal help for heating or cooling this year compared to 5.8 million in 2008-09. Yet Michigan saw its federal funding plummet from $238 million to $38 million, and Obama wants to cut the program back to $2.5 billion for the entire country.

Jim Crisp, executive director of the Michigan Community Action Agency Association, which connects people with LIHEAP assistance, notes that Michigan’s social safety net is already developing gaping holes. “We’ve seen reduction of the Earned Income Credit. We are looking at the loss of [the state Low Income Energy Efficiency Program], and a 50 percent reduction in LIHEAP.” Even as he asks for federal assistance to aid low-income families, in his last budget, Gov. Snyder proposed eliminating the EITC altogether.

Will a Georgian innovation pave the way to helping America's unemployed?

The Wall Street Journal reported that the White House is strongly considering including a version of the “Georgia Works” unemployment program — where unemployed Georgians work at an employer for up to six weeks while getting unemployment benefits, with the possible promise of a paid job at the end — as a part of a major jobs package that it plans to introduce early next month.

One of the benefits of modeling a federal program on an existing state program is that you have a test case to analyze. Looking at the the results of Georgia Works, there are a number of successes that the program can claim:

— It Saves Employers Money: In a precarious economy, many employers are afraid to expend the funds necessary to hire new workers. An analysis of Georgia Works from the state Department of Labor presented in 2010 found that the average employer saved $4,590 in the “up to six weeks of pre-employment training” that they offered to jobless Georgians. Saving on these labor costs would create incentives for employers to provide the job training that workers need.

– It Has Helped Thousands Find Work: Since its inception in 2003, more than 4,000 Georgians have found new careers thanks to the job training offered by Georgia Works. The state’s labor commissioner in 2010 claimed that Georgia saved $6 million in the Unemployment Insurance Trust Fund thanks to unemployed Georgians finding work through the program.

– It Has Been Popular Enough To Rapidly Expand: In 2010, Georgia more than doubled the size program thanks to its popularity. Other states, including New Hampshire and Missouri, recently created “carbon copies” of the program within their own states.

But the program does have its critics. For instance, it has been lambasted for failing to get enough people back to work and undercutting full-time paid work:

– The Program Provides Little Guaranteed Additional Assistance To Participants: Sandra Gresham, who heads up a nonprofit called Arms of Love in Atlanta, noted that the transportation stipends provided to participants were insufficient and made it very difficult for them to work: “I’ve had five or six people from Georgia Works who wouldn’t do the job. It’s enough to barely pay bills or put gas in the tank. They can’t afford to do it.”

– The Program Could Be Abused To Undercut Full-Time Laborers: The National Employment Law Project (NELP) points out that Georgia Works often behaves more like an unpaid internship than job training. “We reviewed Georgia Works. It looks more like work than training,” said NELP’s Andrew Stettner. “You can’t try someone out and not pay them. It’s not allowed under our nation’s labor laws. If a lot of businesses can bring in a lot of people essentially working for free, somebody else [working full-time] isn’t getting an extra shift or extra work hours.”

– Most Employers Do Not Hire The People They Trained: The Pew Center On The States’ Stateline points out that only 38 percent of participants in the program were later hired for the job they were training for. However, 63 percent of those who were trained under the program did find work within 90 days at some employer.

In creating a program based on Georgia Works, policymakers should look at both what the program does right and what it does wrong to design the best possible program for the millions of Americans who remain unemployed.