One President, two federal governments? (TVA is the other one)
March 7, 2009
Unbelievably, for 75 years we have had parallel federal governments, one based on the U.S. Constitution and the other pulled from thin air in 1933 as part of FDR’s New Deal. Many of his programs were ruled unconstitutional; while there have been Supreme Court judgments on the Tennessee Valley Authority (TVA) none have ruled specifically on TVA’s constitutionality.
The TVA is one-of-a-kind in American history. Incredibly, it has been given the powers of the “main” federal government while receiving supra powers in its own legislation. For example, the TVA board of now seven part-time directors sets their own rules that cannot be changed by any other arm of government - state, federal or local - without an act of Congress.
It is an awesome federal agency that effectively controls 80,000 square-miles of sovereign land in seven Southeastern states. In this instance, it is the TVA tail wagging the economic back of the southern dog. There is no development in America without the need for electricity. No industry, private need, or public necessity, can be without electricity and TVA controls a large chunk of it.
I have been researching the TVA for a number of years and have discovered there are at least two major elements in TVA’s dominance; the Sword of Damocles over the heads of 10 million people in the form of eminent domain and their unbridled authority to set electricity rates and, secondly, the built-in greed factor contained in the TVA law itself.
TVA makes “payments-in-lieu-of-taxes” (I call them “bribes” in lieu of taxes) that are paid to the seven states in TVA’s territory calculated on 5% of gross TVA sales of electricity. The states, not individuals, where the most electricity is used get the most money back. It’s sort of like getting a tax refund from your own overpayment of taxes but the overpayment goes into bureaucratic hands for use in various ways. I refer to it as “free” money, a slush fund, because it costs nothing to be eligible for it. Just buy more electricity and in some vague way users get the “free” money benefit.
TVA has no effective incentives for users to reduce electricity they buy because that would fly in the face of TVA’s built-in disincentives to do so. Estimates are that TVA underpays 20 to 30 percent in taxes that normally would flow into local and state coffers.
TVA, until recently, has won just about every suit brought against it claiming sovereign immunity; after all, TVA is a federal agency. However, U.S. District Court Judge Lacy Thornburg dashed that theory when he ruled in favor of North Carolina in a precedent-setting trial. Now TVA must conform to a federal judge’s timetable for TVA to install costly and long overdue air cleaners in four of TVA’s coal-fired plants.
In a more recent instance, Tennessee’s governor has demanded that the TVA submit its plans to the state for approval of the clean up of the Kingston ash dam catastrophe. So far, the TVA in yet another precedent-setting move has complied.
An audit of the use of TVA’s VISA credit cards has nothing but more bad news for TVA management. The gory details are available from TVA’s own Office of the Inspector General (TVA OIG), a slow moving, overlooking the obvious, “independent”, investigative arm that is paid from TVA funds. Many of the $75 million in VISA card charges were illegal or improper. Clearly, there was a lack of management enforcement of controls that already were in place.
A letter from the Congressional Budget Office (CBO) to
Congressman Ron Kind, long-time Wisconsin Democrat, identifies federal assets “that could be sold, leased, licensed, or otherwise conveyed to raise revenue.”
While objecting to the thrust of CBO’s efforts to “raise revenue”, still, item four in their 10-point bulleted report bears a very close look.
· Sell a Portion of the Tennessee Valley Authority’s (TVA) Electric Power Assets
The CBO report says, in part, “…TVA would return to its original, more limited function of managing the region’s hydropower resources. TVA’s other power assets for which a commercial market exists – such as the agency’s fossil-fuel and nuclear power plants and its transmission lines – would be sold.”
The CBO then outlines its rationale for the sale of TVA assets and how billions of revenue dollars could be raised.
I have advocated going even further to get the TVA completely out of the power business. It is far too late for the TVA to reinvent itself back to its original charter. The entire culture of the TVA, which has developed like Topsy over generations, has turned into a power-grabbing behemoth, gobbling up other power generating systems as fast as it can.
I have suggested ways to dissolve the TVA “corporation” that is in fact a federal agency. I believe an Executive Order could accomplish it without enabling legislation. See http://norsworthyopinion.com/sevenreasonsTVAwillnotbeprivatized.aspx
Isn’t it time to stop the competing “parallel governments” and go about repairing the damage TVA has done to the U.S. Constitution and its resulting paternalistic effect on Southern culture?
Ernest Norsworthy
emnorsworthy@earthlink.net
http://norsworthyopinion.com