News Release

Obama Budget Plans Privatizing Major New Deal Institution; Republicans Object


GAR ALPEROVITZ, via John Duda, jduda at
Alperovitz is professor of political economy at the University of Maryland and co-founder of the Democracy Collaborative. His new book is What Then Must We Do? Straight Talk about the Next American Revolution.

Alperovitz recently co-wrote “Shocker: Republicans Fight Obama Plan to Privatize the Hugely Popular, Cheap Energy Source of the TVA,” which states: “Buried within the fine print of the 2014 Obama budget is a startling bit of history-changing policy. The government, the administration says, should consider selling off the Tennessee Valley Authority, one of the nation’s largest publicly operated — that is, ‘socialist’ — institutions, and the largest public power provider in the country.

“The TVA is a non-profit, free-standing public authority established by the Roosevelt administration during the Depression — a very large utility, if you like. It provides 165 billion kilowatt hours of power to 9 million Americans, has $11.2 billion in sales revenue, employs more than 12,500 people, and provides other educational, training and related services (such as navigation and land management, flood control, and economic development) to the people in the states and region around the Tennessee river basin.

“Strikingly, it’s the free-market Republicans who object to this proposed privatization. Senator Lamar Alexander, a Tennessee Republican who has vehemently opposed government tax credits and subsidies for renewable energy, calls the proposal ‘one more bad idea in a budget full of bad ideas,’ and fears that privatization would lead to higher energy costs for his constituents. …

“The basic problem is that this ‘socialist’ institution is immensely popular. It has given the people of the region good service for roughly eight decades, and its prices are lower than those of many private corporations. … Even among environmental groups — which often criticize the TVA for, among other things, its continued use of coal and nuclear power plants — there is little appetite for privatization. The Tennessee chapter of the Sierra Club holds that privatization would be a mistake, potentially allowing new private corporate owners to ‘liquidate its assets by selling off TVA’s public lands along the Tennessee River and tributaries.’ …

“Most Americans do not realize that public ownership like that involved in the TVA, and a cornerstone of much decried ‘socialism,’ can be found in communities in every state in the nation. For one thing, there are more than 2,000 public electric utilities — many in conservative rural areas — and, like the TVA, they are popular among local residents and politicians. Successful public ownership of vital transportation facilities (such as roads, ports and airports) is also common. And, of course, roughly a third of the nation’s total land surface (and the minerals beneath and forests above) is owned and managed by the government.”