Venezuelan Heating Aid to U.S. Poor Restored

Venezuela's Budget Crisis

The falling price of oil has hurt Venezuela's budget.

The government said it has been calculating its budget on $60 a barrel, according to John Carey, a Dartmouth College government professor. Carey believes the budget is actually based on a $70 to $80 a barrel price.

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Either way, with Venezuelan crude selling for less than $40 a barrel now, Chavez is facing a budget crunch. The country's oil is harder to refine than oil from the Middle East and therefore sells for less.

Chavez has also been giving away oil to Cuba, Nicaragua and Honduras. Carey said it makes sense that the U.S. program was cut.

"The U.S. is the first to go and Cuba will be the last to go," he said.

So could that lead to the downfall of Chavez? Not at all, Carey said.

"For a guy who's been in office for almost 10 years now, his public approval ratings and his electoral pull is still pretty impressive," Carey said.

And will this have any impact on America's relations with Venezuela?

Falcoff, from the American Enterprise Institute, said he never understood why Chavez was giving away oil and said he doesn't expect any change. He said that there is no American embargo against Venezuela and that besides some rhetoric the United States has normal trade relations with the country. Each month, the United States imports 35 million to 40 million barrels of oil from Venezuela.

"It's been a mystery to me," Falcoff said, "except that it's an attempt to demonstrate to the world that Venezuela is a rich country and the United States is a poor country."