Privatize the TVA

April 15, 2013

Perhaps President Obama has been reading about Margaret Thatcher’s policy successes. He is apparently considering selling off the federal government’s Tennessee Valley Authority. This is a great idea. As this story notes, it would allow the struggling electric utility more flexibility in dealing with the many challenges it faces.

While Democrats are often more socialistic on economic policy than Republicans, Democratic President Bill Clinton was a modest privatizer. He proposed selling off four federal electric utilities in his 1996 budget (see page 149), and he did manage to complete the sale of the Alaska Power Administration. And, as I note in this essay, he also privatized the federal helium reserve in 1996, the Elk Hills Petroleum Reserve in 1997, and the U.S. Enrichment Corporation in 1998.

This time around, Democratic President Obama may run into opposition from socialistic Republicans. Sen. Lamar Alexander has already griped that Obama’s TVA plan is “one more bad idea in a budget full of bad ideas.” But I’d suggest that the president push ahead and outflank the supposedly free-market GOP but proposing sell-offs of the Postal ServiceAmtrakWestern power dams, and the Army Corps of Engineers.   

David Boaz reminds me that former Cato chairman Bill Niskanen was barred by Congress for even looking into TVA reform when he was on President Reagan’s CEA. So this is a sensitive issue, and it will be interesting to see how far Obama’s efforts get before the Lamar Alexanders in Congress block him.



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