We are never going to get the federal government out of the utility business if we continue to let federal representatives lie about its history.
The latest excitement over the President’s Budget (PB) is the possibility of selling the Tennessee Valley Authority off to whomever the bureaucracy selects. In the first place, the PB is next to meaningless. It is nothing more than the Executive branch asking the Legislative branch for money to run the government, that the Congress can, and usually does, ignore. It is not much different than your children asking for things, and you have the final say in what the kids get. For some reason hardly anybody who writes about the federal budget has bothered to learn this basic fact. Indeed, the only reason I know about it is not from reading news about the budget, it is from a couple of decades working in Defense budgeting.
On page 51 of the PB the Executive states:
Given TVA’s debt constraints and the impact to the Federal deficit of its increasing capital expenditures, the Administration intends to undertake a strategic review of options for addressing TVA’s financial situation, including the possible divestiture of TVA, in part or as a whole.
I am not going to tease you with any fantasy about selling off TVA. The federal government went through a few illogical hoops to get this monument to socialism on its property book and it is going to stay there, especially if nobody is going to call the representatives of the bureaucracy on the falsehoods they forward in defending federal ownership of, well, everything.
Congressman Mo Brooks (R – AL) is a good case in point. In an interview with WHNT (channel 19) Huntsville, AL forwarded the false theory that Article 1, Section 8 of the Constitution prohibits TVA from being sold because of navigation issues. For good measure, he adds flood control too:
Article I, Section 8 of the United States Constitution grants the federal government control over America’s navigable waterways. The TVA’s principal function is to own and operate locks and dams to both protect Tennessee Valley citizens from floods and ensure that the Tennessee River is navigable for commercial and recreational boat traffic. I know of no circumstance that justifies President Obama forcing the TVA to abandon its flood control and navigable waterway roles that it has performed so admirably for more than seven decades.
The big problem with that argument is that the first dams in the TVA system were privately constructed and owned before TVA was proposed, like the Hales Bar dam, completed in 1913. The dam was licensed by the federal government in an area of questionable navigation on 27 April 1904. The dam and lock system are what helped make that area navigable, and the same process was required for the Great Falls dam.
After the formation of TVA, the federal government was challenged for entering the utility business, they defended their actions on the Article 1, Section 8 navigation power, and were granted their monopoly on that basis. Which still does not change the fact that all of the navigation and power generation functions could be done by private firms.
The Congress could retain federal control over the locks (the navigation part of the system) and the rest could be sold off, or the Congress could sell the whole thing with the same caveats the Tennessee Power Company had over a century ago.
The bottom line is, whenever a politician says the government can’t do something, the truth is that it can, even if it is the right thing.