President
Ronald Reagan started a discussion on federal privatization in the 1980s. His administration
explored privatizing the postal service, railroads, electric utilities, the air
traffic control system, and federal land. A Reagan-appointed commission issued
a major report in 1988 proposing various privatization options, but the
administration's efforts mainly stalled. The administration did oversee
the privatization of the National Consumer Cooperative Bank in 1981 and the
freight railroad, Conrail, in 1987 for $1.7 billion. Following Reagan,
President George H. W. Bush issued an executive order supporting privatization,
but he made little progress on reforms.
President
Bill Clinton had more success. During his administration, the Alaska Power
Administration was sold in 1996 for $87 million; the Elk Hills Naval Petroleum
Reserve was sold in 1998 for $3.7 billion; and the U.S. Enrichment Corporation
was sold in 1998 for $3.1 billion. In 2000, Congress passed legislation putting
Intelsat (owned by a consortium of governments) on the road to privatization.
The
George W. Bush administration proposed partly privatizing the Social Security
retirement system, but that effort was blocked in Congress. On the other side
of the ledger, Bush signed into law a bill nationalizing security screening at
U.S. airports.
President
Barack Obama's budget for 2014 proposed privatizing the Tennessee Valley
Authority. The administration has also pursued the sale of excess federal
buildings.
Recent
decades have seen more of a focus on partial privatization. Under Presidents
Bill Clinton and George W. Bush, for example, the Pentagon moved a large number
of military families to 187,000 private housing units. That program has been
very successful: housing quality has improved and costs are down.
Also,
recent administrations have encouraged private involvement in the U.S. space
program, and a number of firms have won contracts to resupply the International
Space Station.
Privatization
will likely be on the agenda in coming years. Budget deficits are here to stay,
so policymakers will be looking for ways to reduce spending and raise revenues.
Policymakers will also be looking for ways to boost America's sluggish economic
growth. As time passes, policymakers will be able to draw on ever more foreign
privatization successes. We know that postal services, air traffic control,
passenger railroads, and other activities can be successfully moved to the
private sector because other countries have now done it.
Any
activity that can be supported by customer charges, advertising, voluntary
contributions, or other sorts of private support can be privatized. Government
activities may be privatized as either for-profit businesses or nonprofit
organizations, depending on the circumstances. The important thing is to move
activities to the private sector, where they can grow, change, and be an
organic part of society connected to the actual needs of citizens.
The
following six sections look in detail at privatizing the USPS, Amtrak, TVA, air
traffic control, land, and buildings. Following those discussions are shorter
discussions of additional businesses and assets that the federal government
should privatize.
Norb
Leahy, Dunwoody GA Tea Party Leader
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