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updated 2/10/2011 8:57:06 AM ET 2011-02-10T13:57:06

President Barack Obama wants to cut $2.5 billion from a $5 billion home heating aid program for the poor, two people familiar with his 2012 budget proposal said Wednesday, halving the popular fund as he looks for places to rein in federal spending.

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The proposal would cut the Low-Income Home Energy Assistance Program to its 2008 level of about $2.5 billion.

The individuals, including a congressional aide who was briefed on the proposal, discussed the details on condition of anonymity because Obama's spending plan has not been issued. It was being released on Monday, and covers the budget year beginning Oct. 1.

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Separately, House Republicans on Wednesday outlined a plan for $35 billion in immediate spending cuts that would practically eliminate the program's contingency fund, cutting it by $400 million. The fund totaled $490 million, according to the program's website.

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Sen. Kerry urges president not to cut
Sen. John Kerry, D-Mass., urged Obama not to cut the funding. He said more than 3 million families would lose assistance.

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"I've always supported serious efforts to restore fiscal sanity, but in the middle of a brutal, even historic, New England winter, home heating assistance is more critical than ever to the health and welfare of millions of Americans, especially senior citizens," Kerry said.

Obama has said tough choices must be made about how to spend scarce federal dollars to rein in spending and reduce the budget deficit and the nation's mounting debt.

The spending proposal was first reported by National Journal.

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The association of state officials who administer the heating program says the number of households needing help paying energy bills is expected to hit a record high this year for the third straight year.

The National Energy Assistance Directors' Association opposes any program cuts. It says the number is expected to climb to 8.9 million households, up from 8.3 million last year and 7.7 million the year before. The association blames the increases on the weak economy and continued high energy prices.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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