Privatization in Trump’s Budget

February 13, 2018

President Trump’s new budget for 2019 proposes privatizing federal assets such as airports, air traffic control, and electricity facilities.

The budget’s infrastructure section suggests that Congress “Authorize Federal Divestiture of Assets that Would Be Better Managed by State, Local, or Private Entities.”

It continues:

The Federal Government owns and operates certain infrastructure that would be more appropriately owned by State, local, or private entities.

For example, the vast majority of the Nation’s electricity needs are met through for-profit investor-owned utilities. Federal ownership of these assets can result in sub-optimal investment decisions and create risk for taxpayers.

Providing Federal agencies authority to divest of Federal assets where the agencies can demonstrate an increase in value from the sale would optimize the taxpayer value for Federal assets. To utilize this authority, an agency would delineate how proceeds would be spent and identify appropriate conditions under which sales would be made. An agency also would conduct a study or analysis to show the increase in value from divestiture. Examples of assets for potential divestiture include—

  • Southwestern Power Administration’s transmission assets;
  • Western Area Power Administration’s transmission assets;
  • Ronald Reagan Washington National and Dulles International Airports;
  • George Washington and Baltimore Washington Parkways;
  • Tennessee Valley Authority transmission assets;
  • Bonneville Power Administration’s transmission assets; and
  • Washington Aqueduct.

These reform ideas are straight out of Cato’s playbook. The administration also renews its call to privatize the air traffic control system. That is, “shift the air traffic control function of the Federal Aviation Administration to a non-governmental, independent air traffic services cooperative.”

These studies provide background to the proposed reforms:

The budget also proposes reforms to allow for the “disposition of federal real property,” and you can read about that topic in this detailed study of federal privatization.

So regarding all those “sub-optimal investment decisions,” I say enough! We should move assets into the private sector and unleash entrepreneurs on America’s transportation challenges.


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