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-   -   Economics Role Reversal: GOP Blasts Obama Plan to Sell TVA (http://www.chiefsplanet.com/BB/showthread.php?t=272169)

Pitt Gorilla 04-16-2013 04:14 PM

Role Reversal: GOP Blasts Obama Plan to Sell TVA
 
I thought this was interesting.

http://news.yahoo.com/role-reversal-...71020134.html?

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 are not 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.

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

NewChief 04-16-2013 04:16 PM

That's pretty awesome. Follow the money trail.

loochy 04-16-2013 04:16 PM

at first glance, i have no problem with that

BucEyedPea 04-16-2013 04:17 PM

Quote:

Originally Posted by NewChief (Post 9592734)
That's pretty awesome. Follow the money trail.

Koch Brothers?

Amnorix 04-16-2013 04:20 PM

I'd be shocked, shocked I say if there was a substantial number of patronage jobs at the TVA from all those Republican (and no doubt Democrat) lawmakers from those states...

NewChief 04-16-2013 04:23 PM

Let's see if the fiscal conservative upstarts in the republican party can actually stand up and break ranks... or if it's just more of the same bullshit lipservice from conservatives.

They love their entitlements and government spending... they just want to make sure it's THEIR entitlements.

KC_Lee 04-16-2013 04:25 PM

Living in TN for the last 10 years I can say that this is one of the most corrupt, crony capitalism states in the Union.

This stinks of political back-scratching.

cosmo20002 04-16-2013 04:31 PM

Quote:

Originally Posted by Pitt Gorilla (Post 9592729)
Role Reversal: GOP Blasts Obama Plan to Sell TVA


http://news.yahoo.com/role-reversal-...71020134.html?

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.

So, Rs are against something Obama proposed, even if it is normally something they would support. Doesn't sound like a role-reveral at all, it is standard operating procedure.

Donger 04-16-2013 04:35 PM

TVA has a bunch of debt, right? If so, it sounds like the TN GOP members are just trying to protect their constituents from rate increases that would happen if it were sold.

BucEyedPea 04-16-2013 04:43 PM

I don't have trouble with privatization, if it evolves out of market forces unlike this. This reeks of cronyism and gives monopoly power. Of course, since monopolies are created by govt not the market. Looks like the mercantilist/corporatists own Obama too.


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