published Sunday, April 14th, 2013

TVA privatization would benefit all: GOP should follow Obama's lead

President Barack Obama has a good idea.

That's a sentence that has never been written on this editorial page and, barring miraculous circumstances, will not again.

Obama, who, by any historical definition is a socialist, has endorsed one of the most free market policy stances in recent memory. In fact, his idea is so rooted in limited government that the Right's beloved freedom fighter, Barry Goldwater, was the first to propose it.

Obama's grand plan? Privatizing the Tennessee Valley Authority.

The president's 2014 budget, which was submitted to Congress on Wednesday, declares: "Reducing or eliminating the Federal Government's role in programs such as TVA, which have achieved their original objectives and no longer require federal participation, can help put the nation on a sustainable fiscal path."

There is little doubt that TVA's "original objectives" of providing "navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley" were achieved long ago.

More to the point, TVA succeeded in its underlying goal of bringing electricity to poor rural areas in the South, while improving farming practices and eliminating malaria. Now electricity is cheap and easily available and malaria is, thankfully, a distant memory in our region.

There is also little doubt that, given TVA's crippling debt load, the possibility of a sizable profit from privatization and the agency's ability to avoid paying taxes, the divestiture of TVA would certainly "help put the nation on a sustainable fiscal path."

While aging Southerners, who grew up revering collectivist New Deal schemes, and TVA employees, who have a vested self-interest in protecting the clumsy, inefficient government-owned utility monopoly, may scowl in opposition, privatizing TVA is the right move.

The advantages of selling off the federal government's energy company are numerous, including:

• Safety and accountability -- TVA is exempt from nearly 140 federal laws, such as workplace safety and hydroelectric licensing. Private electric companies are required to follow much more stringent regulations, some of which may have prevented the 2008 spill of a billion gallons of wet coal ash that that polluted 300 acres around Kingston, Tenn.

• Environmental benefits -- TVA's artificially low power rates cause over-consumption and stall the pursuit of inventive energy solutions. Additionally, the government-run authority has little economic incentive to improve efficiency in operations or through new capital investment. Changing that model could dramatically reduce electricity usage.

• Increased tax revenues -- While the feds stopped giving TVA direct taxpayer-funded handouts to help bankroll its operations in the late-1990s, the agency still receives significant subsidies. That's because TVA pays no taxes, only small payments in lieu of taxes. The federal, state and local taxes that private businesses pay don't apply to TVA.

• Remove taxpayer liabilities -- Currently, TVA's debt is nearly $25 billion. With only $60 million in net income off of $11.2 billion in revenues, the agency is barely breaking even and is incapable of paying down its debt. Add to that the fact that billions are needed to modernize power plants and improve infrastructure and TVA will likely soon need to exceed its debt cap of $30 billion. TVA's finances aren't viable in the long term and when the bills come due, American taxpayers may be on the hook.

The downsides of privatizing the TVA are much harder to find. The only real argument for keeping the TVA's assets in government hands are weak arguments like, "people like the TVA how it is" and "that's how we've always done it." Sadly, that stale mindset has overtaken area Republican lawmakers who claim to oppose government control and socialist programs.

In a written statement, U.S. Sen. Bob Corker, R-Tenn., admitted TVA is riddled with problems, but remained cold to the White House's talk of privatization. U.S. Rep. John J. Duncan Jr., of Knoxville, called the proposal "a very bad idea." Mo Brooks, a Republican congressman from Northern Alabama, said he was "skeptical" of Obama's idea to sell off TVA.

U.S. Sen. Lamar Alexander, R-Tenn., told the Times Free Press, "There is today no federal taxpayer subsidy for TVA, period." Alexander is right, but only if you don't count the millions and millions in taxes the TVA doesn't have to pay. The senator continued, "There is by law no federal taxpayer liability for TVA debt." Again Alexander is right, as long as the TVA can pay its bills. If the agency can't, taxpayers may end up picking up the tab.

Jess Brown, a policy analyst for WHNT News 19 in Huntsville, pointed out that even though TVA is "clearly an element of socialism [that put] the government directly into the economic development, the regional development [and the] electricity producing business," conservative lawmakers in TVA areas "might not be so quick to dismantle socialism in their home districts."

Judging by the mindset of our Republican senators and congressmen, a huge government-owned energy authority is socialist if it's in someone else's district, but it's a proper function of government if we benefit from it here at home. The hypocrisy is laughable.

With so much benefit -- and so little downside -- to privatizing TVA, let's hope that Republican lawmakers who claim to defend free markets and encourage privatization actually have the courage to go through with the idea.

It would be a shame to look back and realize that President Obama was actually more committed to the free market principles when it came to privatizing the services provided by the TVA than a bunch of supposedly limited-government conservatives.

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carlB said...

Gee, what is happening here? The voters in TN must have forgotten what the conditions were and what happened in 1935 when TVA was part of FDR's "New Deal"? Why have the TN voters changed over to elect the "leaders" both on the State and National level who would be against the US Government taking on any role to help the workers and the people needing help?
Where were the private enterprises in the 1929 great depression and also now during this 2007 deep recession? What would have happened in September 2008 and after President Obama took office in 2009, if the Government and the FEDS had not done something to stabilize the US economy that was on the verge of another great depression? The private utilities have been "wishing" to take over the TVA for many years. But now all of the Republicans are apparently changing their opinions after they found another "negative" to put on President Obama.

April 12, 2013 at 11:26 a.m.
carlB said...

TVA privatization would benefit all? I have been at the opinion that TVA has benefitted everybody from it's development 1935. Why did the private utilities not invest in a plan similar plan before four years passed and FDR was President ion 1933?

April 12, 2013 at 11:48 a.m.
DJHBRAINERD said...

Environmental benefits -- TVA's artificially low power rates cause over-consumption and stall the pursuit of inventive energy solutions........Am I reading the wrong side of the paper? It may or may not be a good idea and it is definatly above my paygrade but the above sounds like a back handed endorsment of cap and trade. Raise rate on the consumers in order to have them buy less does not sound like an arguement that will "benifit us all".

April 14, 2013 at 1:39 a.m.
gjuster said...

CarlB -

There are many of us who believe that the government caused the 1929 great depression to linger on for a long time because of what they did. The same for the "great recession" we have had going on since the Bush years. Check out the great depression of 1920 - it didn't last very long because the government stood back and let the law of economics happen without futilely trying to change them. Perhaps that's why no one has heard of the 1020 depression.

April 14, 2013 at 6:47 a.m.
Lr103 said...

If America conquered the depression of 1920 so successfully, then another one shouldn't have happened only 9 short years later.

April 14, 2013 at 9:24 a.m.
Plato said...

Once again Mr. Johnson's robotics thinking process - Private Sector Good, Government Bad - lacks facts and substance.

First it is factually incorrect that TVA received appropriated funds from congress for power generation programs. Appropriated funds have always been used for non-power projects such as the Chemical Development Center and management of parks and recreational areas - projects that have by and large gone by the wayside. Power related projects including maintenance and overhead are paid for 100% by power revenues.

Second to say TVA has some of the lowest rates in the country because it doesn't have a tax liability is beyond absurd. TVA has been a model of efficiency and innovation in the industry and has simply done a better job than most private sector utilities.

Rather or not TVA can continue to be the industry leader as it has in the past as a privately owned utility is a question for debate, but it's not likely IMO that rates would stay at their current levels, and low power rates are one of the things that attracts businesses to our region.

This is just one more salvo in Mr. Johnson's relentless attack against EPB, TVA the US Post Office and any other organization that doesn't have "Inc" after it's name.

April 14, 2013 at 10:51 a.m.
carlB said...

DJHBRAINERD said... Environmental benefits -- TVA's artificially low power rates cause over-consumption and stall the pursuit of inventive energy solutions

REPLY:=== DJHBRAINERD, YES, there can be a difference in the thinking with manipulations from the people who have different objectives in their minds on what they want for the people and for the good of this Republic. There is a lot more involved here than how much electric power we use and what the costs are.

April 14, 2013 at 12:39 p.m.
carlB said...

gjuster said... CarlB - There are many of us who believe that the government caused the 1929 great depression to linger on for a long time because of what they did. The same for the "great recession" we have had going on since the Bush years.


====== Reply:gjuster, why do you not discuss the causes and reasons of how the 1929 great depression and the 2007 deep recession? after all if these economical crisis did not or had not occurred, then we would not have to blame anyone for not getting this Republic out of these conditions? When studying the history of the 1929 great depression, Did the depression get better or worse during the four years before FDR took office? What were the reasons that the 1929 great depression did not "BECOME STABILIZED" before FDR's New Deal WENT INTO AFFECT? Do you see any similarities between what the attitude between the "parties" then and now?

April 14, 2013 at 1:06 p.m.
carlB said...

After President Obama took office in January 2009 the Republican's actions have been of disavowal and despicable in the House and Senate to publicly announce their objective was to cause President Obama's failure. Therefore preventing and obstructing the recovery of the 2007 recession. This action should be called a "TRAITOROUS" act against this Republic and the people. After the arrogance shown by these "enemies" of President Obama and of this country, it causes me to be opposed to anybody who tries to "lie to the voters that President Obama has been a complete failure after having tried to cause him to be a failure.

April 14, 2013 at 1:12 p.m.
Lr103 said...

What people have to understand is the private sector has and will always be bias in its hiring practices. They have a long history of denying jobs to women, blacks and veterans. Government jobs, such as the U.S. Postal Service, TVA etc. gave veterans returning to civilian life from such conflicts as late as Vietnam job opportunities the private practice refused them. With women blacks and as well as veterans, it took the government promising all kinds of trinkets, goodies and breaks before they would even consider hiring from those groups. Then even when they did hire, promotions were rare and salaries were unequal. Firings and being let go for no reason or made up ones were the norm. There was no job protection for women, blacks and veterans. Without government jobs, oversight and interference the private sector will return to its old bias habits. You can be sure of that.

Also, there's no guarantee power will be cheaper if TVA is privatized. In fact, the average power bill is far more likely to be much higher. All it takes is a look at the problems California has had for decades with private power companies. Then they're likely to resort to cheap, unskilled labor which is very dangerous.

April 14, 2013 at 2:10 p.m.
acerigger said...

I cringe at the thought of TVA's nuclear program being in the hand of "private enterprise". Compare TVA's safety record against any privately (for profit) run nuclear entity and it's easy to see where the corner-cutting and cost-reduction by "for profit" companies put us in danger. Having worked as a contractor with TVA in the past,I can vouch for the fact that they DO NOT cut corners!

April 14, 2013 at 2:24 p.m.
gjuster said...

carlB - Sorry, I am not going to write a dissertation on the great depression. I do not believe that FDR was a great President. In my opinion, his actions caused the depression to last longer than it should have, hurt the constitution through Wicker v Filburn, did nothing to save Jewish and gypsy lives in Nazi Germany (even though he could have), and was a terrible negotiator against Stalin causing millions of Eastern Europeans to suffer or die. As for hoping Obama fails - if I believe that a President's (or any elected official's) policies are ruinous - I will do what I can to help stop them. This has been going on between Republicans and Democrats from long before Obama became President - it isn't anything new. FYI - I don't think much of the Republican policies either and have worked to stop them too.

April 14, 2013 at 2:28 p.m.
carlB said...

gjuster said... carlB - Sorry, I am not going to write a dissertation on the great depression.


REPLY: gjuster, I do not believe anybody is saying that FDR was a perfect President, I am not. Nor am I saying that any President has BEEN or is PERFECT. I did not expect you to write a book on the similarites of how the Republicans policies and their actions were in the 1929 great as compared to how they have acted after President Obama got elected in 2008. Yet, you continue to expound on how bad FDR foreign policies were.

April 14, 2013 at 4:26 p.m.
gjuster said...

caelB

We agree no President has ever been perfect, for most, they have only been less bad than others. I look at their philosophy, what they believe in as a start. Do I agree with their beliefs. Unfortunately, they seldom live up to their beliefs.

We kind of got off topic - the TVA. The point I agree with Drew points to my last paragraph. Republicans supposedly believe in the free market and private business - except when it's their district that will be affected.

And lastly - thank you for having a discussion with me without the name calling and degradation that lives on both sides.

April 14, 2013 at 7:50 p.m.
RightKlik said...

"Obama, who, by any historical definition is a socialist..."

We should be skeptical about any "privatization" plan that comes from a socialist. What's the goal?

"TVA's artificially low power rates cause over-consumption ... Changing that model could dramatically reduce electricity usage."

Okay, there it is. Remember this quote from Obama: "Under my plan ... electricity rates would necessarily skyrocket."

Where better to try to launch electricity prices skyward (and reduce energy usage and economic growth) than in a Red State that's chock full of Obama's political enemies?

Taking a boondoggle created by the federal government and dumping the heavily regulated burden on local governments is no tip of the hat to the free market. But it could serve as a way to punish taxpayers in a conservative state while ostensibly hoisting Republicans by their own "private enterprise" petard.

April 14, 2013 at 10:13 p.m.
carlB said...

RightKlik said... "Obama, who, by any historical definition is a socialist..."


REply: RightKlik, your use of "socialist" and "boondoggle created by the federal government" gives me pause because you have not done your "home work" to back up your biased opinions. We have to start asking the correct questions to find out and counter act the reasons why the voters want to fall back under the failed policies of the Republicans?

Are the "enemies" of this Republic and the enemies who are opposed to President Obama winning a second term, aware that the realistic and the sensible voters have gotten wise to their obstructionism and the stalemate caused by them? Thereby getting rid of the biased, deliberately created stalemate in the House while gaining in the control of the Senate, by voting Obama in for a second term and to vote for the other true Democratic candidates to give him the help that he needs to "Move Forward" in helping create the needed private sector jobs. What happens if the private corporations do not recreate the lost jobs here? Will we have another great depression since the private global corporations will not do the proper thing by reinvesting here in the USA without subsidies and incentives?

April 15, 2013 at 12:17 a.m.
acerigger said...

carlB said."Will we have another great depression since the private global corporations will not do the proper thing by reinvesting here in the USA without subsidies and incentives?"

I think you're on to something there carl.

April 15, 2013 at 12:49 a.m.
fairmon said...

TVA is not an efficient operation and privatization is the right thing to do. However, there are many operations across the country that should be included in this Obama administration initiative. It should include Amtrac and high speed rail in California where millions are being spent on a rail system that starts in the boon docks and will never be profitable. These are only two of thousands of examples. It should include parks and recreation centers across the country that should be supported by users and private owners. Governments role is to legislate and regulate not to operate.

The 25 billion debt of the TVA causes the wonderment why the $12,000 per employee bonus money wasn't applied to the debt? What is the plan and process for paying the debt? If interested the high compensation level of too many staff people can be viewed on line. The country club management style of the TVA is not efficient and not in the best interest of communities served. The TVA should not be singled out by the Obama administration as a red state punishment but as a small part of a nation wide initiative to privatize all federal government owned and operated entities.

April 15, 2013 at 7:21 a.m.
jjmez said...

And lastly - thank you for having a discussion with me without the name calling and degradation that lives on both sides.

Don't be fooled CarlB. He just has a slew of diehard followers who do the name calling by proxy on his behalf. That way, he can always come out appearing the concious intellectual. Reminds me of the kid who convinces the puny little neighborhood boys to throw a rocks at the old lady's window, then run and tell on them when they break glass, and comes out looking like the good little innocent.

April 15, 2013 at 10:59 a.m.
carlB said...

fairmon said...TVA is not an efficient operation and privatization is the right thing to do. However, there are many operations across the country that should be included in this Obama administration initiative. It should include Amtrac and high speed rail in California where millions are being spent on a rail system that starts in the boon docks and will never be profitable $12,000 per employee bonus money wasn't applied to the debt?


======REPLY: fairmon, In other wortds, you do not want the US Government having any ROLE?
The well known objectives of the Republican Party of working with the corporations for the of taking away the Governments' role in helping the "Masses" after the private enterprise (Capitalist) policies have forced the working conditions, as in the unfair "free trade agreements" (global economy) and the fraud involved causing the 2007 deep recession. All of which have played a part in decreasing of the middle class workers. ===== Forget about the workers having any unions or representation for the workers or help for the people who cannot find a job, the Republicans have said that they would leave these people to fend for themselves and will be at the "mercy" of employers. How many of the voters would go along with being; repressed, regressed, oppressed, depressed, digressed or suppressed with new morality laws? If this ` where the people who think as you want to be taken, then these are the unbalanced conditions that the Republicans will give them. Move the 99% of the Masses back into the "stone age" if they get back into control. I would not work!

April 15, 2013 at 12:21 p.m.
carlB said...

acerigger said... carlB said."Will we have another great depression since the private global corporations will not do the proper thing by reinvesting here in the USA without subsidies and incentives?" I think you're on to something there carl.


===== acerigger, How are you doing? Have we met somewhere? lol Are you one of my "diehard followers"?

I always try to get the facts before forming an opinion and usually speak for myself. Sometimes it is hard to get the facts. An example would be; the facts are that President Obama was elected in in November 2008 as the President and has had to overcome the actions of his enemies to cause his failure without any concern of what economic damage and their obstructism was causing to this Republic. Yet, in spite of the Republican's actions of lies, obstruction, and misinformation, the voters did not get bought off or "fooled" the first time or the second time, electing Obama again in November 2012. The facts are; This Republic is not in another great depression regardless of the disappointment of the enemies of the REAL Democratic believers. The missing facts are; what would have been the conditions if the voters had elected McCain and Palin in 2008?

jjmez said...Don't be fooled CarlB. He just has a slew of diehard followers who do the name calling by proxy on his behalf. That way, he can always come out appearing the concious intellectual. Reminds me of the kid who convinces the puny little neighborhood boys to throw a rocks at the old lady's window, then run and tell on them when they break glass, and comes out looking like the good little innocent.

April 15, 2013 at 1:37 p.m.
mhbraganza said...

@fairmon, if you think TVA salaries and benefits are inflated, you'll be in for a nasty shock when you see those of its new owners should TVA be broken up and sold-off to private, for profit, businesses. Just compare those at TVA with our closest investor-owned utilities like Duke and Southern Company. Of course there is also nothing to stop TVA being sold off to foreign companies. Your future power bills may go to pay owners and stockholders as far away as China.

Also, since you clearly subscribe to the popular opinion that anything run by the government must be bad (as in the sheep-like "Goverment Baaaaaad"), why stop at divestiture of TVA and the other items you mention? If "Governments role is only to legislate and regulate not to operate", why not divest the Feds from all its other operational responsibilities that you evidently see as failures - like the US military, NASA, the Corps of Engineers, Homeland Security etc.

April 15, 2013 at 1:47 p.m.
Leaf said...

Be careful what you wish for. History has shown that privately held monopolies rarely make good masters.

April 15, 2013 at 2:47 p.m.
jjmez said...

*carlB said...

jjmez said...Don't be fooled CarlB. He just has a slew of diehard followers who do the name calling by proxy on his behalf. That way, he can always come out appearing the concious intellectual. Reminds me of the kid who convinces the puny little neighborhood boys to throw a rocks at the old lady's window, then run and tell on them when they break glass, and comes out looking like the good little innocent. *

You misread my post CarlB. I warning you not to be fooled by the poster that thanked you for not resorting to name calling. They're not the poster children for politeness.

April 15, 2013 at 3:31 p.m.
acerigger said...

carlB,I don't know that I could be called one of your "diehard followers",LOL. I just admire your posts always being well-researched and to the point without being trollish or name calling. Also, I happen to agree with you 99.9% of the time.

btw, I'm pretty sure we've never met.

April 15, 2013 at 3:52 p.m.
carlB said...

jjmez said...You misread my post CarlB

====== REPLY; jjmez, yes, it appears that I did misread your comment. I apologize for my error. I appreciate you calling/reminding me. Thank you.

April 15, 2013 at 4:08 p.m.
gjuster said...

jmez -

It would be good if you knew what you were saying before you post it for all to see. I don't name call, and I respect other opinions. And no one ever posts for me. I happen to think that CarlB is completely wrong in what he says in the above post - but I understand that he and I view things differently and respect that. It's up to me to change his mind if I can, or vice versa. Unlike 99% of the people that post here - I use my name - perhaps if others would quit hiding behind a false name, these discussions would be more fruitful and less antagonistic. People tend to be very tough when no one knows who they are and they can't be reached.

April 15, 2013 at 5:43 p.m.
jjmez said...

Hope the image change is sincere and ..... lasting. Guess only time will tell?

jjmez is a real name.

April 15, 2013 at 6:16 p.m.
gjuster said...

Jjmez - Good that you use your name - not sure about the image change - mine's been the same for over 50 years

April 15, 2013 at 6:48 p.m.
carlB said...

gjuster said... jmez - It would be good if you knew what you were saying before you post it for all to see. I don't name call, and I respect other opinions. And no one ever posts for me. I happen to think that CarlB is completely wrong in what he says in the above post - but I understand that he and I view things differently =======


REPLY; gjuster,you should be more specific on what you really disagree with me on instead of referring to the post above.

Do the Republicans and the Capitalist think they have a winning combination by putting this Republic on the verge of another great depression, with the National financial weakness of the country, caused by the fraud and the global economy/free trade agreements? Do the Republicans and the Capitalist believe they have the voters in the "right" frame of mind for hating the unions, hating the workers who have health care and retirement plans and the "big government" that FDR's policies created? Now it is President Obama's policies placing the controls on the private financial systems, for helping the people by creating private sector jobs here We have already had a "dose" of the elected Congress looking out for themselves and the Capitalist instead of our citizen workers. We, the US consumers, also need to help reduce our trade deficit with the global corporations, forcing them to reinvest in more manufacturing plants here, creating jobs making the goods that are now imported. The KEY to recovery is the creation of middle class manufacturing jobs and the decrease in the cost of living expenses while decreasing the "wage gap," with sacrifices made by everybody. Not the depressing of the middle classes and not forcing an increase in the number of people living in Poverty.

April 16, 2013 at 12:44 a.m.
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