Private Matters

Prospects for federal privatization

Rep. Dana Rohrabacher (R-Calif.) has been trying to privatize the U.S. Postal Service ever since he was elected to Congress in 1988. But despite ever-increasing post-office horror stories of delays, lost or destroyed mail, and a dissatisfied work force, he has had little success.

Until recently, discussion of privatization at the national level was limited to think tanks and a handful of maverick congressmen such as Rohrabacher. But now with a Republican Congress and a president who is rediscovering 1992 campaign themes just in time for 1996, senior leaders at both ends of Pennsylvania Avenue are endorsing privatization of federal assets and services.

This year, the House Budget Committee under Rep. John Kasich (R-Ohio) will produce an ambitious privatization package that has a reasonable chance at passing. The budget is expected to include a proposal to privatize the air-traffic control system and make it wholly user-fee funded, to end subsidies for the Corporation for Public Broadcasting, and to sell off at least one of the five regional power marketing authorities–holding companies of dams and other electrical power plants–which would probably generate several billion dollars. Amtrak's subsidies also are likely to be reduced.

The Republican effort is greatly helped by Clinton's support for a number of privatization schemes. Before the 1994 elections, the administration proposed turning the air-traffic control system into a government corporation and has signaled recently that it is open to a fully private corporation. The Department of Energy plans to sell four of the power marketing authorities and convert the fifth into a government corporation. The DOE also is exploring the option of selling off the Naval Petroleum Reserve.

In fact, the most serious obstacle to passing privatization measures could be Republican members of Congress who are concerned about protecting government programs in their districts and committee chairmen worried about defending their new turf. Such misgivings over privatization and other budget cuts were behind the House Budget Committee's decision to delay the original late-January release date for its budget.

Rohrabacher believes that privatization supporters can't afford to scale back or slow down privatization plans: "If we think and act like revolutionaries, we will succeed. If we act like cautious reformers, we will fail."