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United in Rare Admin Opposition, Tea Party GOP and Labor Unions Shout Down TVA Privatization

Old photos of the TVA are awesome.

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An item in President Obama’s budget proposal which spells p-r-i-v-a-t-i-z-a-t-i-o-n to the Tennessee Valley Authority (TVA) has brought about criticism from a broad range of political actors.  A shining example of FDR’s New Deal, the TVA provides power to 9 million customers across Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee, and Virginia and provides a rare example of southern Republicans and labor unions agreeing wholeheartedly on the value of something.

In response, administration officials have been backing off the concept when questioned by the press.   

The language of the President’s budget proposal reads:

“Reducing or eliminating the Federal Government’s role in programs such as TVA, which have achieved their original objectives and no longer require Federal participation, can help put the Nation on a sustainable fiscal path,”

With a trio of powerful unions (IFPTE, IBEW, and IAM) lobbying Capitol Hill against possible TVA privatization, and with GOP stalwarts such as Sen. Lamar Alexander and Sen. Thad Cochran coming out on the same side of the debate, the White House is softening its tone. One official went as far as saying that there is “no current plan for the federal government to divest in the TVA”:

“The administration is not proposing to divest of the Tennessee Valley Authority at this time. The administration supports the TVA’s ongoing operating and financial initiatives and intends to closely monitor the TVA’s performance,”

At stake for unions are thousands of jobs supported by the TVA.  IFPTE President Greg Junemann argued that privatization is unnecessary and would cost many current workers their jobs.

“Right now, the Tennessee Valley Authority now provides the most reliable, low-cost source of energy across the South.  There’s no reason to do this, unless it’s forming some sort of political partnership that no one can quite figure out.”  

Junemann said 2,500 IFPTE members work for the TVA, and said he worries privatizing the company could see them tossed out of work.
“They will lose their jobs,” Junemann said. “We know what happens. Some private company comes in and says HR will give you a call on Monday and you’re out.”

In a written statement the AFL-CIO’s Building and Construction Trades Department President, Sean McGarvey, praised the longstanding success of the TVA:

“TVA has proven to be immensely popular. It has provided tens of millions of people throughout the Valley with consistently good service for roughly eight decades. Its prices are lower than those of many private corporations.  And it has been a fantastic community partner in providing jobs and career training opportunities.  

In light of these facts, we challenge the administration to present a case as to why this is nothing more than a poorly crafted, poorly intended, never to be realized, budget gimmick that won’t save money, but will cost jobs.”

It seems obvious that the affected unions would stand up to protect their membership, but traditionally anti-union Republicans opposing privatization is the more surprising side of the scenario.  Sen Lamar Alexander labeled the plan “one more bad idea in a budget full of bad ideas,” presumably taking any chance to jab at GOP Kryptonite himself, President Obama.  Rep. Duncan took the criticism further:

“This proposal is part of a Presidential budget that has received very bad reviews and is not likely to go anywhere,” Duncan said in a statement. “It is also something that has been proposed in the past and been determined to be a very bad idea.”

For Obama, plans to change the course of the TVA seem based in promises of debt relief.  The TVA is projected to generate $10.8 billion in fiscal year 2015 but some in the administration worry about its long term economic impact.  The authority currently holds nearly $25 billion in outstanding debt, close to it’s $30 billion cap.  As noted by The Hill’s Kevin Bogardus, however, given that TVA bonds are not backed by the “full faith and credit of the US Government”  these debts do not count against the national debt limit.  This means any attempt to sell off the TVA can be considered a profit-seeking exercise, one that comes at the expense of the jobs of workers.  

Thanks to the cross-aisle outcry, privatization of the TVA now looks unlikely for the upcoming fiscal year. The novelty of the rare pairing of organized labor and the extreme GOP was not lost on Stephen Smith, executive director of the Southern Alliance for Clean Energy. “I truly believe that Obama put this in there just to show that government has an important role to play,” he said. “If Ron Paul were president and this was in his budget, I would be worried. I got a real laugh seeing our conservative stalwarts defending their local socialist project.”


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