Full Title: If It Ain't Broke, Don't Fix It! Potential Impacts of Privatizing the Tennessee Valley Authority
Author(s): Joel Yudken
Publisher(s): Economic Policy Institute
Publication Date: June 1, 2015
Full Text: Download Resource
Description (excerpt):
The Obama administration is considering whether to divest all or part of the federally owned Tennessee Valley Authority (TVA) as a means to pay down the U.S. debt. The selling off of all or part of the TVA to private ownership would have far-reaching consequences, especially for the 9 million people in the 80,000-square-mile region—encompassing parts of Tennessee, northern Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia—to whom the TVA provides electricity and other services.
The proposal has sparked a debate about the benefits and problems that divestiture might bring. Conservatives have long opposed the TVA on the grounds that it is an illegitimate government intrusion into the marketplace. The Obama administration’s fiscal year (FY) 2014, 2015, and 2016 budget proposals have called for reducing or eliminating the federal government’s role in programs such as the TVA “which have achieved their original objectives or no longer require Federal participation.” Worried that the TVA’s bond debt, then at $26 billion, could exceed its $30 billion statutory cap and thus impact the federal debt, the administration has suggested ending federal ties in order to “help mitigate risk to taxpayers” and “put the Nation on a sustainable fiscal path”.