Reagan signs Omnibus Budget Reconciliation Act replacing LIEAP with LIHEAP

President Reagan signs the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35), establishing the Low Income Home Energy Assistance Program (LIHEAP) as Title XXVI of the law. LIHEAP replaces the predecessor LIEAP with a block grant structure that gives states more flexibility. The program is authorized at $1.875 billion for FY1982 through FY1984. Unlike LIEAP, LIHEAP allows funds to cover cooling costs without medical necessity and sets income eligibility at the higher of 150% of the poverty line or 60% of state median income. The bill also makes sweeping domestic budget cuts across dozens of social programs.