Republicans Blast Obama's Plan to Sell New Deal Icon

obama budget sell tva gop republicans new deal program
Dave Martin/APTechnicians monitor the refueling process on a reactor at the Browns Ferry nuclear plant in Athens, Ala., in March 2011. Republicans are blasting a plan by President Obama to consider selling the Tennessee Valley Authority, a New Deal-era agency.
By MATTHEW DALY

WASHINGTON -- In a political role reversal, Republicans are blasting President Barack Obama's plan to consider selling the Tennessee Valley Authority, an icon of the New Deal long targeted by conservatives as an example of government overreach.

Obama's 2014 budget proposal calls for a strategic review of the TVA, the nation's largest public utility with 9 million customers in seven states from Virginia to Mississippi.

Selling the U.S.-owned power company could reduce the federal deficit by at least $25 billion and "help put the nation on a sustainable fiscal path," Obama says in a budget document.

Not so fast, say GOP lawmakers in the region.

"It's one more bad idea in a budget full of bad ideas," said Sen. Lamar Alexander, R-Tenn., a longtime TVA champion.

"There is no assurance that selling TVA to a profit-making entity would reduce electric bills in the Tennessee Valley, and it could lead to higher electricity rates" for customers in Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee and Virginia, Alexander said.

Sen. Richard Shelby, R-Ala., vowed to "carefully study any proposals to restructure TVA" to ensure it continues to deliver affordable electricity throughout the region.

Privatizing TVA has been proposed before "and been determined to be a very bad idea," added Rep. John Duncan, R-Tenn.

Administration officials emphasized that privatization was just one option being considered. Sale of the agency has been discussed by prior administrations, but nothing has happened.


Indeed, proposals to sell TVA date back to soon after the agency was created in 1933 to reduce the risk of flooding in the region and bring electricity to rural communities in poor areas of Appalachia. It was a key part of President Franklin D. Roosevelt's New Deal program, which used government spending to help the nation recover from the Great Depression.

President Dwight Eisenhower called TVA "creeping socialism," while President Ronald Reagan criticized it as an example of big government. Republicans from Barry Goldwater to Newt Gingrich have pointed to the TVA as an example of where the private sector could provide services more cheaply and effectively than bureaucrats.

Republican antipathy for the TVA led many in the Southeast to assume that any proposal to sell TVA would come from the GOP -- not a Democratic president fresh off winning a second term.

The privatization proposal "is making our heads spin here in Tennessee," said Stephen Smith, executive director of the Southern Alliance for Clean Energy, a nonprofit group that promotes alternative energy throughout the region.

"For the first time that I'm aware of, you've got a Democratic administration proposing the sale of TVA and simultaneously you've got significant, conservative federal representatives in the House and Senate defending their local socialist project," Smith said. "There's a lot irony in it and little bit of humor actually."

A White House spokesman referred questions to the budget office. A spokeswoman said the plan was part of an effort to modernize and reform the federal government, and to address the financing of energy infrastructure.

"TVA has significant capital financing constraints which are difficult to address in the current fiscal environment," she said.

Rep. Jim Cooper, D-Tenn., called sale of the TVA an "extremely remote possibility" and said the authority's large debts make it unattractive to potential buyers. The TVA also provides a range of services besides power generation, including flood control and recreation, that would shift to other agencies or be dropped if the TVA is sold.

TVA, which owns 29 hydropower plants, 11 coal plants and three nuclear plants, has been plagued by cost overruns in recent years, particularly for its nuclear fleet. The agency plans $25 billion in capital expenditures over the next 10 years, much of it to expand its nuclear capacity and modernize older, coal-fired plants, but faces a statutory debt cap of $30 billion.

John Thomas, the TVA's chief financial officer, said the agency receives no money from the federal government and its bonds aren't a federal obligation. Even so, TVA debts are considered part of the federal deficit.

One possible solution is federal legislation to change how the TVA's debt is calculated for federal purposes, Thomas and others said.

The authority will cooperate with the strategic review, but will operate as usual in the meantime, Thomas said.

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Follow Matthew Daly's energy coverage on Twitter: https://twitter.com/MatthewDalyWDC


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108 Comments

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iynaroc03

Republicans are full of ironies. It makes sense that TVA's debt is a stand-alone debt and not part of federal deficit

April 17 2013 at 1:24 AM Report abuse rate up rate down Reply
jcajunque

TVA has been an integral part of the south since int's inception. If there are cost over-runs, they need to be addressed. If it does not get federal funds for it's operations, it shouldn't be considered part of the national debt. They do the same thing to social security. Try to make it part of the federal debt. Only if the fed owes money to the fund. BUt that's not social security's fault. These programs probably need fixed but not to be thrown out. How about they sell TVA to the people who use it?

April 17 2013 at 1:06 AM Report abuse rate up rate down Reply
John Perry

Hey obama how about acting like the boss you were hired to be and ordering GSA to sell the empty, unused Federal buildings that we pay to maintain all year long.
How about ordering Agencys in leased offices or buildings to move into unused federal buildings?
There are so many unused buildings no one even has a complete inventory.

Act like a boss and do something that eliminates waste and makes sense for a change.

April 17 2013 at 12:21 AM Report abuse +1 rate up rate down Reply
omgnojobs

the muslim clown called the bombings a act of terror ,but opened up all american borders for the illegal immigrants terrorists to "break" in n bomb americans. ! this will be the norm for the next 4 years of crap nonsense . !

April 17 2013 at 12:01 AM Report abuse +1 rate up rate down Reply
1 reply to omgnojobs's comment
himedi

I started to read your comment and then I noticed your racism and bigotry, so I discounted the entire comment...

April 17 2013 at 1:20 AM Report abuse rate up rate down Reply
Dennis Chrisinger

the feds give more money to forgine countries that hate america this is a insulte 16 trilian dollars just this tear alone a debt that cant be REPAID
25 billion and "help put the nation on a sustainable fiscal path," Obama says in a budget YOU HAVE TO BE JOKING ME 1.8 Billion to the muslin brotherhood 200 M1A1 tanks 20 F-16s does anyone understand that the debt uses american land as collateral there selling the country FOOLS and that aill the taxes stollen by the goverment all year dosnt even go throwds the national debt
A NATION OF SHEEP just change the channel evrything will be ok

April 16 2013 at 11:50 PM Report abuse +1 rate up rate down Reply
1 reply to Dennis Chrisinger's comment
omgnojobs

cut the muslim clowns "out of control spending~~cut the size of guberment~~cut all americans taxes. !

April 17 2013 at 12:03 AM Report abuse +1 rate up rate down Reply
viroman1

I'm a conservative to the core! Sell it for what you can get out of it or let someone take over for what is owed. As long as the debt gets off our books and it we don't have to pay anyone to take it get rid of it. It provides electricity so someone will buy it. There are customers there so if the rates go up get solar panels. We can't afford more givernment subsidized upgrading of coal fired power plants to meet clean air quality standards and the nuclear plants are gonna continue to rise in cost to maintain. This is a problem those politicians have known about for a very long time and been side stepping so now a democrat finally agrees so sell it.

April 16 2013 at 11:25 PM Report abuse +1 rate up rate down Reply
nldr

You just can't please a Republican

April 16 2013 at 11:20 PM Report abuse +1 rate up rate down Reply
Joseph

hmmmm the TVA pays nothing to the Federal Government but its debts are considered part of the Federal Deficit? Why does that sound like more red state free-loading to me? No guarantee that a private company could run it any better? Rates might go up? DUH. Well Mr Alexander how about we use this to prove your parties privatization theories?

April 16 2013 at 11:16 PM Report abuse +1 rate up rate down Reply
johnprupb

Now they want the rest of the country to subsidize their cheap electricity with this 'big government' fixture? They rail against 'big government' and demand privatization until the scheme comes home. Then the hypocrites sing a different tune. Give these red state voters what they clamor for, a retreat of government from their livers and a restoration of private enterprise.

April 16 2013 at 10:57 PM Report abuse +2 rate up rate down Reply
RonRuthNik

Now, if there was a Prez Romney, and he suggested it, they'd be all for it!

April 16 2013 at 10:48 PM Report abuse +3 rate up rate down Reply
1 reply to RonRuthNik's comment
omgnojobs

IF THERE WAS AN PREZ ROMNEY ,THERE WOULD HAVE BEEN ANY ILLEGAL IMMIGRANT TERRORIST BOMBING ,CAUSE HE WOULD HAVE BOOTED THOSE A~HOLES OUT OF THE COUNTRY ALREADY , BUT WE WILL HAVE 4 MORE YEARS OF THIS MUSLIM CLOWNS CRAP NONSENSE. !

April 16 2013 at 11:43 PM Report abuse +1 rate up rate down Reply