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Common Dreams

Unions Rail Against Obama Proposal to Privatize "New Deal" Success Story

Jon Queally, staff writer

Created by Congress as part of FDR's 'New Deal' push in the 1930's, unions simply don't understand why the Obama administration proposes to privatize the Tennessee Valley Authority.

Tucked away in President Obama's 2014 budget proposal released early last week, say union critics, is a renewed proposal by the administration to destroy one of the last remaining success stories that resulted from Franklin Delano Roosevelt's "New Deal" more than 80 years ago.

According to reporting by The Hill on Tuesday, Obama's inclusion of a previously floated plan to privatize the Tennessee Valley Authority—created by FDR and Congress in 1933—have put unionized workers employed by the TVA on the "attack" against an idea they say will cost them their jobs and destroy a federal entity that has fulfilled its mission in every way.

From The Hill:

The president first announced the proposal in last year’s budget plan, saying the administration “intends to undertake a strategic review of options for addressing the TVA’s financial situation, including the possible divestiture of the TVA, in part or as a whole.”

In this year’s budget, the administration said it “continues to believe that reducing or eliminating the federal government’s role in programs such as the TVA, which have achieved their original objectives, can help mitigate risk to taxpayers.”

That language was included over the strenuous objections of labor unions, which approved a resolution at the AFL-CIO convention in September urging Washington to reject all efforts to privatize the TVA.


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Along with the engineers, the International Association of Machinists (IAM) and the International Brotherhood of Electrical Workers (IBEW) are all worried their members’ jobs could be at risk if the TVA goes private.

“That’s always a worry, whenever there’s a transition like this,” said Jim Spellane, an IBEW spokesman. “The first place they will look to take the costs out on is the backs of the workers.”

The TVA was created by the federal government and remains the nation's largest federally administered regional planning corporation. Even as it provides electricity for 9 million people in seven southeastern states, the non-profit TVA does so without taxpayer subsidy and at prices below the national average. 

Despite very real failures of the TVA—like its mismanagement of coal ash ponds that have repeatedly been criticized and led to a massive spill in 2008—in terms of proving its viability and efficiency as a public energy and economic development corporation it has fulfilled its mandate to improve services for and the economic livelihoods of those living within its reach.

As Greg Junemann, president of the International Federation of Professional and Technical Engineers (IFPTE), told The Hill, the idea that it should be privatized is not only counter-productive, but defies logic.

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


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