In 2016 the air traffic controllers association backed the Shuster legislation to move ATC to a nonprofit corporation.283 It may seem odd for a labor union to support such reforms, but the controllers are concerned that our ATC system is not receiving the steady funding and advanced technology that it needs. A self‐funded system would create more financial stability than the current system, which is buffeted by chaotic federal budget battles.
A 2009 report by Glen McDougall and Alasdair Roberts compared the FAA to 10 partly or fully “commercialized” (or privatized) ATC systems in other countries.284 They looked at performance and safety data and conducted hundreds of interviews with managers, workers, and users of the different systems. They found that, generally, service quality improved, safety improved, and costs were reduced with commercialization.285
A 2005 GAO study looked at the performance of commercial ATC systems in Australia, Canada, Germany, New Zealand, and the United Kingdom. It concluded that those systems had cut costs, invested in new technologies, and either maintained or increased safety.286 The United Kingdom privatized its ATC in 2001 as a for‐profit business, called NATS, with ownership shares split between private investors, NATS workers, and the government. The British government has announced that it will sell its remaining stake in NATS.287
In the United States, various studies and commissions since the 1970s have recommended ATC restructuring or privatization.288 In the 1990s, the Clinton administration proposed separating ATC from the FAA and setting it up as a self‐funded government corporation.289 In 1997, the National Civil Aviation Review Commission, chaired by Norman Mineta, also proposed a self‐funded ATC system.290
Today, the dominant reform model is the Canadian system, which inspired the 2016 House legislation of chairman Shuster. Privatization would give ATC leaders the flexibility, incentives, and funding they need to improve efficiency and innovate. New technologies are the key to reducing flight times, cutting fuel costs, and minimizing the environmental impact of aviation. Privatization would also encourage America’s ATC organization to develop technologies that it could sell globally.
In a recent interview, the head of Nav Canada, John Crichton, was blunt: “This business of ours has evolved long past the time when government should be in it. . . . Governments are not suited to run . . . dynamic, high‐tech, 24‐hour businesses.“291
The federal government owns 640 million acres of land, which is 28 percent of the land in the United States.292 It owns 61 percent of the land in Alaska and 47 percent in the 11 coterminous western states, but just 4 percent of the land in the other 38 states. The federal agencies with the largest land holdings are the U.S. Forest Service (USFS) in the Department of Agriculture and the Bureau of Land Management (BLM), National Park Service (NPS), and Fish and Wildlife Service in the Department of the Interior (DOI).
Americans generally support federal ownership of the major national parks, such as Yellowstone. But many westerners have grown frustrated with the top‐down controls on much of the federal land within their states. They want more local control because the economic and environmental decisions made in faraway Washington, D.C., often do not reflect their needs. Federal land and resource management has been bureaucratic, restrictive, and inefficient.
For more than a century after the nation’s founding, the federal government’s general policy was to sell or give away western lands to individuals, businesses, and state governments.293 The federal government privatized 792 million acres of land between 1781 and 1940.294 Some of those acres, for example, were privatized under Abraham Lincoln’s Homestead Act of 1862. In addition, the federal government has transferred 471 million acres of land to state governments. The federal government, for example, transferred huge tracts of land to “western” states such as Illinois and Missouri when they gained statehood in the 19th century. The federal share of land in those middle states went from about 90 percent to less than 4 percent. Yet states farther west, such as Utah and Nevada, did not gain substantial ownership of their lands; instead, those lands remain mainly in the hands of the federal government.
By the turn of the 20th century, federal policy came under sway of progressives, who favored retention of lands and increased federal control. That approach continues today. The federal government’s Land and Water Conservation Fund, for example, spends hundreds of millions of dollars a year on land purchases.295 In addition, the federal government has increasingly restricted the use of western lands by state residents through such actions as “national monument” designations. By 2015, President Obama had “established or expanded 19 national monuments for a total of more than 260 million acres of public lands and waters, more than any previous president.“296
Such designations generally reduce the use of lands for activities such as cattle grazing, logging, hunting, fishing, and off‐road recreational vehicles. A slew of federal environmental laws passed since the 1960s adds another layer of restrictions on land use. The overall effect is that westerners have less control over their lands, resources, tax base, and economic development than do easterners.297 Federal agencies are increasingly putting up roadblocks to longstanding uses of federal lands. Since the 1950s, for example, the amount of grazing on BLM’s 155 million acres of grazing lands has been cut roughly in half.298
Some recent land‐related protests against the federal government in the western states have attracted criticism because of the tactics that protestors used. But recent news articles have also captured the frustration of westerners about federal power grabs.299 The Wall Street Journal, for example, profiled a north Texas rancher whose family had been grazing cattle on 900 acres of its own land for more than 70 years; then, to their shock, the BLM swooped in and grabbed 650 of those acres, claiming that the land was actually federal.300
When the government does allow the use of its lands and resources, it often does not price them in a sound manner. It generally sets fees for grazing, water, recreational activities, mineral extraction, and other resources at below market levels, which encourages overconsumption. As a result, federal lands cost taxpayers billions of dollars a year for administration costs, rather than producing a net return. Economists Terry Anderson, Vernon Smith, and Emily Simmons noted, “It is remarkable that the federal government actually loses money in the course of managing federal land assets estimated to be worth billions. Moreover, the federal government has a poor record of ecological stewardship.“301
A 2015 study by the Property and Environment Research Center compared western land management by the BLM and the USFS with land management by four western state governments.302 It found that federal agencies generally lose money managing their lands and resources, while state governments earn a positive return. For example, the USFS generates just 32 cents for each dollar it spends on timber management, whereas state agencies earn an average $2.51 for each dollar they spend. On rangeland management, the BLM earns just 14 cents for each dollar it spends, whereas state agencies earn an average of $4.89 for each dollar they spend. The federal grazing fee in 2014 was just $1.35 per “animal unit month,” but the fees charged by the four state governments ranged from $2.78 to $11.41 per animal unit month.
In 2005 the GAO reported, “The grazing fees BLM and the Forest Service charge … [are] generally much lower than the fees charged by the other federal agencies, states, and private ranchers.“303 The auditors found that grazing fees collected by the BLM are only about one‐fifth the level needed for the agency to break even. The Congressional Budget Office came to similar conclusions: “The current formula appears to result in fees that are well below‐market rates and below the costs of administering the grazing program.“304
Federal grazing fees have remained at low levels in recent decades even though grazing fees on private lands have risen substantially in response to changing market supply and demand conditions.305 Another interesting factor is that, whereas the BLM sets its grazing fee annually for the entire western United States, private fees vary substantially in different locations, as one might expect in the marketplace.
Government pricing often causes distortions, and federal grazing fees are no exception. Artificially low federal grazing fees may encourage harmful overgrazing. However, the situation is complicated. Federal grazing permits are generally attached to particular parcels of private ranch lands, or base property.306 As such, low grazing fees are partly or fully capitalized in the value of those private lands. Therefore, current ranchers may not receive the benefits of the low federal grazing fees because they would have paid a premium when they purchased their private land.307
This economic feature of western lands is the source of a lot of tension. The long‐running battle between the BLM and Nevada rancher Cliven Bundy apparently stemmed from a 1993 BLM decision to cut back on his grazing on federal lands because of concerns about desert tortoises.308 Bundy and his family had long grazed the lands and had a valid permit to do so attached to his base private property. The tortoise decision imposed a large capital loss on Bundy’s base property because its value is directly related to the amount of grazing it can support.
In a recent study, Shawn Regan of the Property and Environment Research Center noted that similar battles are going on all over the western United States because the current grazing system “encourages conflict, not negotiation.“309 The BLM and USFS, under pressure from environmentalists, are imposing increasing restrictions on grazing lands, which is disrupting longstanding ranching activities and imposing capital losses on ranchers’ private property. Part of the solution, according to Regan, is to allow ranchers more secure and tradable property rights in their use of grazing lands and allow them to transfer those rights directly to environmental groups that want to protect sensitive areas. Under that system, rather than lobbying politicians and officials and filling the courts with litigation, the energy of environmentalists would be channeled into voluntary conservation efforts in the marketplace.
A more thorough reform would be to begin privatizing BLM and USFS grazing lands. Economist Steve Hanke pursued BLM land privatization as a member of President Reagan’s Council of Economic Advisers. He proposed that ranchers be offered the option to buy the grazing land that they currently rent from the government.310 The price would be set so that the ranchers were charged for only that portion of the BLM land value that has not already been paid for through private ranch land premiums.
Privatization would create the benefit of secure property rights. The fact that grazing lands are currently government‐owned makes ranchers insecure about their tenure, so they have an incentive to overstock grazing lands and a disincentive to make long‐term investments to improve the lands.311 Such counterproductive incentives have increased as the government has made grazing tenures more precarious in recent decades. Thus, an advantage of privatization would be to provide ranchers more incentives to plan their rangeland management for the long term.
It is true that the BLM, USFS, and other federal agencies have difficult tasks. They are supposed to optimally manage the use of vast rangelands, timberlands, minerals, wildlife, water, and other resources. But rather than trying to price the use of those resources to ensure efficient use, federal agencies — under sway of politicians — generally misprice and misallocate resources.
Now let us consider the National Park System. The NPS operates more than 400 parks, monuments, historic sites, and other areas. The total acreage of NPS holdings has quadrupled from 20 million in 1940 to 85 million today. That is far too large an inventory to manage efficiently, and many NPS sites suffer from deterioration. Visitor centers are aging, artifacts are being vandalized, and historic structures are getting damaged.312 About 60 percent of the 27,000 NPS historic structures need repairs.313 The NPS and other DOI agencies have accumulated somewhere between $14 billion and $20 billion in deferred maintenance.314
The primary blame lies with Congress because it keeps adding to NPS holdings without paying for the upkeep. In a report on the NPS, former U.S. Sen. Tom Coburn (R-OK) said, “Politicians would rather take credit for creating a new park in their community than caring for the parks that already exist.“315 As a result, we end up with NPS sites such as the Eugene O’Neill facility in California, which receives only eight visitors a day but has nine full‐time staff.316 Most of the least‐visited parks and sites were established in recent decades, and these facilities steer NPS resources away from the older “national jewels” such as Yellowstone.
Another problem is that NPS does not charge visitors in an efficient manner. Some NPS parks and sites charge users, but others do not. Great Smoky Mountains National Park is the most visited national park, yet it does not charge an entrance fee at all, even though a modest fee of just $2 would cover its operating costs.317 The overall average charge for almost 300 million annual NPS visitors in 2012 was just 63 cents.318 The study by the Property and Environment Research Center found a similar pattern of low fees that do not cover expenses for USFS and BLM recreation areas.
This discussion only scratches the surface of the complex issues surrounding federal land holdings. There are contentious issues regarding wildlife management, endangered species, wildfires, energy and mining activities, and allowable recreational activities. Many industries and jobs depend on the use of federal lands and resources, so legislative and regulatory restrictions on access affect state economies and many state residents.
As noted, there is great frustration about the heavy‐handed way that federal officials impose rigid regulations on western lands and resources.319 The core problem is that federal politicians and agency leaders are far removed from the costs and benefits of their decisions. They cannot fairly balance all the economic and environmental concerns within each state.
What the federal government essentially tries to do is centrally plan the interactions of millions of citizens with 640 million acres of land and resources. A recent example showing the difficulty of central planning is the government‐created overpopulation of wild horses on BLM lands.320 A 1971 statutory change sought to protect the horses; but the change eliminated all the population‐balancing mechanisms, so now there are far too many horses in some western states, and BLM has failed to find an administrative solution. A similar overpopulation problem with federally protected burros on BLM lands is playing out in Arizona.321
A final problem with federal land management is that federal land agencies are subject to all the usual bureaucratic failings. For example, DOI’s inspector general testified before Congress in 2006, “Simply stated, short of a crime, anything goes at the highest levels of the Department of the Interior.“322 He lambasted the ethics failures of DOI leaders and their “bureaucratic bungling” of oil and gas leases that cost billions of dollars in lost revenues. That case was typical of a “culture of managerial irresponsibility and lack of accountability” at DOI, he noted.323 Another example of DOI mismanagement was the negligent way that it mishandled billions of dollars of royalties that were supposed to be accumulating in Indian trust funds during the 20th‐century.324
The best reform for federal lands is the original one — transferring them to state governments and private owners. Many parks, grazing lands, historical sites, and other assets should be either privatized or transferred to state and local governments. Residents of the western states can better balance the competing needs of agriculture, ranching, industry, recreation, wildlife, and environmental stewardship than policymakers in Washington, D.C.
For many NPS parks and sites, most of the visitors live in state; thus, state ownership makes more sense than federal ownership. Alternatively, individual parks and sites could be transferred to private nonprofit organizations. Yet another option would be for state governments to retain ownership of lands but devolve operation and maintenance of parks to private concessionaires. For some parks, the USFS and numerous state governments currently use that sort of partial privatization.325
For environmentally sensitive lands, an important development is the growth of conservation land trusts. These organizations “have emerged in recent years as central actors in land conservation,” noted Resources for the Future in 2009.326 The number of land trusts in the nation soared from 400 in 1980 to more than 1,700 today.327 These organizations include well‐known groups such as the Nature Conservancy and Ducks Unlimited. Currently, 50 million acres are being conserved by land trusts through ownership, easements, or other means.328
Nonprofit groups offer a more efficient way to manage environmental resources than governments. One reason is that nonprofits usually benefit from extensive volunteer efforts. The Land Trust Alliance estimates that almost 350,000 volunteers nationwide take part in managing land trusts.329 The private, charitable sector is unique in the way it taps this vast workforce of low‐cost, flexible, and dedicated individuals.
New York City has numerous examples of volunteer park efforts. The Central Park Conservancy has managed Central Park since the 1990s.330 The group raises the bulk of funding for the park’s maintenance from donations, and it relies extensively on volunteers in its operations. Bryant Park, which was restored from dereliction in the 1980s by private efforts, is now managed and funded by a nonprofit corporation.331 And the very successful High Line Park was conceived by a private group and partly funded by $44 million in private donations.332
Privatizing federal parks would increase transparency. As already noted, Coburn’s study found that the NPS provides almost no detail to the public about how individual parks spend their money. By contrast, the private, nonprofit association that runs Mount Vernon, home of George Washington, publishes audited financial statements.333 Mount Vernon relies on private support and does not receive government funding.
In recent years, numerous western states have passed legislation calling for the transfer of federal lands to the states.334 At the federal level, the next administration should create a detailed inventory of land and resource holdings and identify those assets that can be moved to state and private ownership. Congress and the administration should then work with the states and begin paring back the vast federal estate.
Buildings and Structures
The federal government owns or leases 275,000 buildings, including offices, warehouses, and health facilities.335 The government also owns or leases 481,000 structures, such as parking lots and bridges. The annual operating costs for the buildings and structures is $30 billion.336 The replacement value of federal buildings and structures was estimated at $1.5 trillion in 2007.337
The federal government is a poor asset manager. The GAO has had federal real property on its “high risk” waste list for years and found that “many assets are in an alarming state of deterioration.“338 A House committee examining federal building mismanagement found that buildings in prime locations in some cities have been left empty for years.339 The committee also found that agencies grabbed excessive office space, wasted money by not coordinating with each other, and incurred excessive lease costs.
The GAO noted that the government has “many assets it does not need.“340 The Obama administration found that “agencies have accumulated properties in excess of what the government needs to effectively meet its mission. This has resulted in a large number of excess properties and underutilized or unutilized properties in the portfolio.“341 According to one estimate, the government has 77,000 buildings that are unused or underused.342
Excess federal buildings and structures should be sold. That would put them into more productive private uses, and boost overall efficiency in the economy. Selling assets would reap a short‐term revenue gain for the government, and it would broaden the property and income tax bases — to the benefit of all levels of government.
Unfortunately, there are bureaucratic hurdles to selling federal buildings. One problem is that the government does not know exactly what it owns. The GAO says that the federal government has a “lack of accurate and useful data to support decisionmaking” on its properties.343 The government’s property database held by the General Services Administration is riddled with inaccuracies, such as faulty data on building conditions, costs, and valuations.344 Oddly, the database is also apparently withheld from Congress because it is “proprietary.“345
Another problem is that the process of selling properties is lengthy, convoluted, and costly.346 Legally, properties must meet standards of repair and environmental remediation before sale, but agencies often do not have enough budgeted funds for that. Another hurdle is that all surplus property must be evaluated for possible use by homeless persons, and that evaluation — believe it or not — can take two years to complete.347
As a result of such hurdles, many agencies put little effort into selling unneeded assets. One solution would be for Congress to mandate that agencies sell a certain dollar value of assets by a specific date. To give agencies an added incentive, they would keep a modest portion of sale proceeds. That approach was proposed in a bill introduced by Rep. Jason Chaffetz (R-UT).348
There is hope for bipartisan reforms. President Obama issued a memorandum in June 2010 that encouraged agencies to identify excess assets and sell them.349 He argued that privatizing unneeded federal buildings would be good for both taxpayers and the environment. Obama noted, for example, that private data centers had become more energy efficient over time, but government data centers had not.
Obama administration official Jeffrey Zients said that hurdles to federal property sales include a culture of inertia, lack of funding in agency budgets for sales transactions, politicians who prefer ribbon‐cutting on new facilities over selling unneeded ones, and 20 different laws that govern federal sales.350 Nonetheless, the administration has reported some progress on property reforms, and in 2015, it released a “national strategy” to continue the progress.351
Those efforts are positive but too modest. With a general downsizing of the federal government, most federal buildings and structures could be sold. For example, the Department of Agriculture owns 21,000 buildings and 18,000 structures, which have a market value of $30 billion or more.352 If the government were to abolish farm subsidy programs and devolve the food stamp program to the states, most of that infrastructure could be sold. The government would also create savings in the department’s building operating costs, which are $600 million a year.353
In the United Kingdom, the government launched a Right to Contest initiative, under which citizens who think that particular plots of government land or buildings are not being used efficiently can ask for an official review.354 The government also created a website for citizens to examine the status of particular government properties across the nation.355 When those initiatives were launched in 2014, the official in charge said government “should not act as some kind of compulsive hoarder of land and property.“356 We need less “compulsive hoarding” by government on this side of the pond as well.
Other Privatization Opportunities
Power Marketing Administrations
The federal government owns the Bonneville Power Administration, the Southeastern Power Administration, the Southwestern Power Administration, and the Western Area Power Administration. These four utilities transmit wholesale electricity in 33 states. The power is mainly generated by the 130 hydroelectric plants owned by the Army Corps of Engineers and Bureau of Reclamation. Power Marketing Administrations (PMAs) account for 7 percent of U.S. electricity consumption.357
The PMAs sell most of their power at below‐market rates to “preference” customers, meaning utilities owned by local governments and more than 600 nonprofit rural electric cooperatives.358 The PMAs and utilities benefit from numerous subsidies. None of them pay federal or state income taxes.359 The local utilities issue tax‐exempt bonds. The PMAs can borrow from the U.S. Treasury at favorable rates, and PMA bonds have implicit federal backing. Finally, some of the PMAs receive direct subsidies from federal appropriations, which totaled $368 million in 2015.360
Those subsidies distort the economy; they also harm the environment because they result in artificially low prices, which encourage overconsumption.361 However, a portion of the subsidies are likely dissipated by government inefficiencies, rather than benefiting consumers. A Congressional Budget Office study in 1997 found that the “managerial structure of the federal power program … makes it hard to operate efficiently.“362 And it found “inadequate maintenance of power assets — a problem that applies to all of the federal power agencies — and low utilization rates of hydropower generating capacity.“363 Private hydro dams “produced an average of 20 percent more electricity per unit of capacity than did [federal] dams supplying the power marketing administrations.“364 In addition to these hydropower shortcomings, one PMA — Bonneville — also has a history of supporting boondoggle nuclear plants.365
The Congressional Budget Office has concluded that the reasons for federal ownership of electricity assets that “might have been appropriate in the 1930s are no longer valid.“366 That is true. There is no need for the government to be in the hydropower business today, especially since more than two‐thirds of U.S. hydropower plants are already owned privately.367
The PMAs and the generating plants owned by the Army Corps of Engineers and Bureau of Reclamation should be privatized. That would increase operating efficiency and allow prices to be set at market rates, thus ending incentives to overconsume power. For the government, privatization would reduce spending by ending subsidies, while raising revenue from the asset sales and taxation of the privatized entities.
President Reagan proposed privatizing the PMAs in his 1986 budget. President Clinton oversaw the sale of the Alaska Power Administration in 1996 but was unable to sell the other PMAs. Congress should dust off the Clinton reform plans and let the private sector run the electricity industry.
Army Corps of Engineers
The civilian part of the Army Corps of Engineers has more than 20,000 employees and annual net outlays of $7 billion. It constructs and maintains water infrastructure such as locks, waterways, and flood control structures. It owns and operates 75 hydropower plants, manages more than 4,000 recreational areas, and performs other engineering and construction activities, such as dredging seaports.
Although the Corps has built some impressive structures, it also has a history of scandals and failures, including the disastrous levee failures in New Orleans during Hurricane Katrina in 2005. Congress has long used the agency as a pork barrel spending machine, often directing funds to low‐value projects in the districts of important members of Congress.
The Corps does the analyses of proposed projects that it will build itself, creating a bias toward large and expensive projects. The Pentagon’s inspector general found that the Corps has a “systemic bias” toward major construction and has been known to do bogus studies to justify costly projects.368 A number of years ago, leaked internal memoranda by Corps leaders revealed a strategy to “get creative” in accounting in order to “get to yes as fast as possible” on proposed projects.369
The Corps has a poor environmental record because of its pro‐construction tilt. It has “channelized dozens of rivers for barges that never arrived.“370 And its navigation and flood‐control structures on the Mississippi and other rivers may have made flooding worse by forcing rivers into narrow channels, destroying wetlands, and encouraging the development of flood‐prone areas.371 In his classic 1993 book on federal water infrastructure, Cadillac Desert, Marc Reisner said that the Corps has “ruined more wetlands than anyone in history, except perhaps its counterpart in the Soviet Union.“372
A 1971 book by distinguished engineer Arthur Morgan, Dams and Other Disasters, castigated the Corps for its arrogance and mismanagement.373 It described how the agency underestimated the costs of projects, followed shoddy engineering practices, lied to the public, hid information, and pursued environmentally damaging projects. Former U.S. Senate majority leader Tom Daschle said the Corps is “one of the most incompetent and inept organizations in all the federal government.“374
Here is the good news: we do not need a federal agency to build civilian water infrastructure. The Corps is filling roles that private engineering and construction companies could fill. When the states need to construct and maintain levees, harbors, beaches, inland waterways, and recreational areas, they should hire private companies to do the work. The Army Corps of Engineers should be privatized and compete for such work.
Consider the Corps’ harbor maintenance activities, which are funded by a federal harbor maintenance tax collected from shippers on the basis of the value of cargo. The tax generates about $1.6 billion a year and is spent on projects chosen by Congress and the Corps. But the federal government is an unneeded middleman here — local seaport authorities could impose their own charges on shippers to fund their own dredging and maintenance activities. That way, seaports could respond directly to market demands, rather than having to lobby Washington for funding.
The Corps’ 75 hydropower plants should also be privatized. More than two‐thirds of U.S. hydropower plants are owned privately, and those plants produce more than one‐quarter of U.S. hydropower.375 While federal facilities dominate hydropower in the western United States, eastern states such as New York and North Carolina have substantial private hydropower. The private sector is entirely capable of owning and operating hydropower plants.
Bureau of Reclamation
The federal Bureau of Reclamation is at the center of water policy in the arid American West. For more than a century, the agency has built and operated dams, canals, and hydropower plants in the 17 western states. It owns 76 hydropower plants and is the largest wholesaler of water in the nation.376 It has 5,200 employees and net budget outlays of $1.5 billion annually.
Reclamation’s policies have created economic distortions and environmental damage. Numerous dams were not worth the cost of construction and only won approval because of pork barrel politics. About four‐fifths of the water that Reclamation supplies today goes to farmers, who receive it at a fraction of its market value. Subsidized irrigation water causes various environmental harms, including inefficient water use, high salinization levels in rivers, and damage to wetlands.
In the 19th century, irrigation was a state, local, and private concern. The Mormons, for example, arrived in Salt Lake Valley in 1847 and within a year had created an irrigation system covering 5,000 acres.377 But lobbying by western interests, such as the railroads, paid off with the Reclamation Act of 1902, which launched massive federal dam building. From the beginning, projects were chosen based on politics, not because they made sense on a cost–benefit basis.378
Despite Reclamation’s huge investments to increase supply, the western United States is in the midst of a serious water crisis today. Groundwater levels are falling and surface sources of water are tapped out. Major river systems in the west have been engineered by federal and state water infrastructure to maximize water consumption. But the drought of recent years has exposed longstanding failures in government policies.
The underlying problems of western water stem from misguided policies on water prices and water transfers. Governments have kept prices artificially low for so long that they have encouraged water use in low‐value activities. Water subsidies combined with federal farm subsidies have encouraged inefficient agricultural production.
Restrictions on water transfers between users add to the problems. Surface water in the western states is generally allocated by government rules, not by markets. Farmers who receive Reclamation water often do not have the option to resell it, so it gets locked into low‐value uses. Water shortages are often caused by restrictions on transfers, not overall supply problems. The solution is to end the subsidies and liberalize rules on transfers so that water prices reflect market supply and demand. That would promote efficiency and benefit the environment.
Water policy issues are hugely contentious in the western states. In the long run, they cannot be solved in Washington, nor should they be. Water policy should be handled by the states, which should control their own water infrastructure. Congress should transfer water infrastructure to state and local governments, who in turn should consider privatizing it. The single largest Reclamation project is the Central Valley Project; its huge facilities are all located in California and should be transferred to that state.
In the 1990s, efforts were made to devolve Reclamation facilities. Under its “reinventing government” initiative, the Clinton administration sold federal water projects to local irrigation districts.379 About 19 Reclamation projects were transferred to nonfederal owners.380 Experience has shown that local control of water infrastructure increases efficiency as a result of lower labor costs, less paperwork, and faster decisionmaking.381
Congress should privatize the 76 hydropower plants owned by Reclamation. That reform should be combined with privatizing the PMAs that transmit the power produced in Reclamation dams.
In a 2015 book, former commissioner of the Bureau of Reclamation Daniel Beard describes how the agency “destroyed hundreds of miles of free‐flowing rivers, promoted excessive water use, and sent billions of dollars in subsidies to a small number of people.“382 With decades of expertise on water issues under his belt, Beard called for abolishing the Bureau of Reclamation, and Congress should heed his advice.
Transportation Security Administration
The government nationalized airline security screening in 2001 with the creation of the Transportation Security Administration (TSA). Today, TSA operates screening at about 450 commercial airports. It has 59,000 employees and net annual outlays of about $5 billion.
The government takeover of airport screening was a mistake. Federal auditors have found that TSA’s screening performance has been no better, and possibly worse, than private screening. TSA has become known for mismanagement, dubious investments, and security failures.
A House committee reported in 2012 that TSA’s operations are “costly, counterintuitive, and poorly executed.“383 A House report in 2011 said that TSA “suffers from bureaucratic morass and mismanagement.“384 And former TSA chief Kip Hawley said that the agency is “hopelessly bureaucratic.“385
In undercover tests in 2015, investigators slipped guns and fake bombs past TSA screeners at numerous airports a remarkable 95 percent of the times they tested. That result prompted a former TSA chief to comment, “[I]t’s just completely unacceptable to have such a high failure rate.“386
The government conducts annual surveys on employee satisfaction in more than 200 federal agencies, and TSA is usually ranked one of the worst.387 TSA has high workforce turnover, and there are frequent reports of employee misconduct.388 A House committee report described the agency as “an enormous, inflexible and distracted bureaucracy” that has “lost its focus on transportation security.“389
TSA misallocates its investment. It spends more than $200 million a year on the Screening of Passengers by Observation Techniques (SPOT) program, which tries to catch terrorists by their suspicious behaviors in airports. According to the GAO, TSA deployed SPOT nationwide before validating the science behind it. The GAO found little, if any, evidence that SPOT works and recommended that it be canceled, but the program continues to receive funding.390
TSA spent hundreds of millions of dollars on poorly performing full‐body scanners from 2009 to 2013. These were the backscatter radiation machines that caused a civil liberties backlash because of the nude images they showed. After the machines were withdrawn from airports, a team of outside experts tested them. They reported in 2014 that terrorists carrying various types of weapons and explosives could have easily fooled the machines.391
The problem is that TSA is a secretive near monopoly. It is difficult for policymakers and the public to judge the agency’s performance and hold it accountable for results. The solution is to devolve airport screening operations to the nation’s airports. Airports would then be able to contract security operations to expert private firms. That would allow diversity and innovation in security techniques and management, and allow open comparisons of performance across airports.
Congress has allowed more than a dozen U.S. airports to use private screeners, which makes possible some comparisons. Over the past decade, numerous studies have found that private screeners perform on security at least as well as, if not better than, government screeners.392 Private screeners at San Francisco International Airport, for example, have been found to perform better than federal screeners at Los Angeles International Airport.
Devolving all screening operations to the nation’s airports would end the conflict of interest stemming from TSA’s roles as both overseer and operator of screening. Under a restructured system, the federal government would retain its role in aviation oversight and security intelligence. But airports would hire aviation security firms to screen; if those firms did not achieve high‐quality results, airports could fire them. Private firms have incentives to invest in procedures that add security in the most efficient manner.
Most other high‐income nations use private airport screening. More than 80 percent of Europe’s commercial airports use private screening, including those in the United Kingdom, France, Germany, and Spain. Canada uses private screening at all its major airports. After 9/11, Canada created an oversight agency for aviation security, but the screening itself is done by private firms, which compete for contracts to handle different airports. Private businesses make mistakes, but unlike government bureaucracies, they are more likely to improve their performance over time, especially when they face competition.
Veterans Health Administration
The Veterans Health Administration (VHA) will spend $68 billion this year on its system of 150 medical centers, 1,400 clinics, and numerous other facilities for veterans.393 The VHA owns the facilities and employs about 320,000 doctors, nurses, and administrators to operate the system.394 The VHA is an outlier in American health care, as even the giant Medicare and Medicaid programs rely on services provided through privately owned and operated health facilities. The VHA system serves about 8 million veterans each year.395
The VHA suffers from the usual problems of government monopolies, such as the misallocation of resources, excessive bureaucracy, congestion, and a lack of transparency. VHA’s facilities, for example, are overcrowded in the states where the population of veterans is growing, but they have excess capacity in other states. Allocation of resources is based partly on political factors, not market demands.
The VHA has a huge backlog of about 900,000 pending applications from veterans, and many veterans face long waits for doctor appointments.396 VHA capital investment is inefficient, and often results in large cost overruns. GAO studied the four largest VHA hospital construction projects in 2013 and found that the combined costs of the projects had doubled.397 GAO pinned the blame on “weaknesses in VA’s construction management processes.“398
A major scandal erupted in 2014 regarding waiting lists for VHA services. Investigators found that many veterans face excessively long waits, with some veterans dying before their scheduled appointments. VHA administrators were found to routinely falsify data to hide the long wait times. The scandal initially focused on the Phoenix VHA hospital, but investigators found that improper and fraudulent scheduling practices were a “nationwide systemic problem.“399 A September 2015 report from the VA’s Inspector General found that the agency’s system for tracking patient enrollments was a mess.400
A 2014 report from the Obama White House lambasted the VHA, saying it suffered from “significant and chronic system failures.“401 The system has a “corrosive culture of distrust,” “acts with little accountability or transparency,” and “encourages discontent and backlash against employees.” The White House report also said that the VHA has unresponsive leadership and its insularity has impeded innovation and change.
Even Sen. Bernie Sanders (D-VT) chimed in: “No organization the size of VA can operate effectively without a high level of transparency and accountability. . . . Clearly, that is not the case now at the VA.“402 But the mistake Sanders and others make is to think that simple management reforms can fix such problems. They do not realize that these sorts of problems are endemic and systemic in large federal bureaucracies, particularly monopolies such as VHA.
Fundamental reforms are needed in the direction of privatizing veterans’ care. In response to the crisis, Congress passed a law in 2014 that included a Choice Card allowing some veterans to go to private health facilities if they were not able to get an appointment within 30 days or if they lived more than 40 miles from a VHA facility.403 But Congress should take further steps in the direction of individual choice in veterans’ health care. Ultimately, veterans’ health facilities should be privatized, and all veterans should receive vouchers to access care at private facilities of their choice.404
Government as Purchaser
The main focus of this study has been activities that the federal government should get out of completely, such as the electric power business. There are other activities that the government will continue to fund but could be partly privatized, such as veterans’ health care. The Office of Management and Budget (OMB) found that about 850,000 federal workers have been “identified as performing commercial activities.“405 Generally, such activities can be purchased from contractors, and OMB Circular A-76 describes a process to determine when that makes economic sense.406 The Clinton and Bush administrations, as noted, successfully privatized 187,000 units of military housing. That initiative improved housing quality, reduced housing costs about 10 percent, and cut energy use.407 The next president should expand such efforts.
Government as Seller
The federal government not only purchases products from the private sector, it also sells them to the private sector. But that often puts the government in competition with private firms.408 The USPS, for example, delivers packages in competition with FedEx and UPS. The government sells many other products as well, including maps, pest eradication services, and laboratory work.409 Allowing the government to sell items that the private sector can or does sell makes no sense. Congress should privatize such activities, and bar federal agencies from entering activities that private businesses perform.
This study has described an array of federal businesses and assets that should be privatized. But there are many others. The government should sell financial assets and businesses, such as its portfolio of student loans and the mortgage giants Fannie Mae and Freddie Mac. It should sell some of the 260 million ounces of gold that it holds at Fort Knox and elsewhere.410 At a price of about $1,200 an ounce, the gold stockpile is worth more than $300 billion.
The government should sell its stockpile of about 700 million barrels of crude oil in the Strategic Petroleum Reserve (SPR).411 Our oil security rests on market forces and a diversity of supplies in the global economy, not the SPR.412 At about $40 a barrel, the SPR is worth roughly $28 billion. Taxpayers would also save annual SPR operating costs of more than $200 million.
Congress should also remove federal barriers to state and local privatization. State and local governments own highways, bridges, seaports, airports, and other infrastructure. Much of that infrastructure can be financed, built, and operated by the private sector. It can be fully privatized in some cases, or partly privatized through public‐private partnerships.413 Such partnerships shift elements of building, financing, management, operations, and project risks to the private sector.
The United States lags countries such as Australia, the United Kingdom, and Canada on infrastructure privatization and public‐private partnerships. One reason is that the federal income tax exemption for state and local bond interest allows governments to finance infrastructure at a lower cost than private businesses can. Congress should repeal this tax break and level the playing field between government and private infrastructure projects.
Federal spending subsidies also stack the deck against state and local privatization. The federal government provides grants for government‐owned airports and urban transit but not private airports and urban transit. Those federal subsidies should be repealed. Also, federal rules that require state and local governments to repay past aid if facilities are privatized should be repealed. Politicians love to tout the economic benefits of public infrastructure, but if they leveled the playing field, the private sector would provide much more of it.
A study by Jonathan Karpoff provided a unique comparison between government and private enterprise. He looked at 92 missions of discovery to the Arctic and the North Pole during the 19th century, some of which were private and some government.414 Karpoff found that the private missions, on average, performed substantially better than the government ones, even though the latter were better funded. Private missions made more discoveries, and they lost fewer expedition members and ships. The study illustrated the importance of institutional structures on incentives. Unlike governments, private entrepreneurs face strong incentives to generate value, pursue innovations, and achieve their stated goals.
Margaret Thatcher believed that the 20th‐century takeover of industries by governments was a mistake and that decentralized efforts by private businesses are superior to state efforts. The results of three decades of privatization around the world have proven her right. Thousands of government businesses have been privatized, and very few have been renationalized. The revolution begun by Thatcher has been sustained because leaders of all political stripes have recognized that privatization simply works.
Privatization increases economic efficiency, spurs entrepreneurship, creates greater transparency, and benefits the environment. Private‐sector organizations make many mistakes, but they are also constantly fixing them. They have to innovate to keep up with the changing needs of society. By contrast, federal organizations, such as Amtrak, the USPS, and the FAA, follow failed and obsolete approaches decade after decade.
The next president should work with Congress to line up the best candidates for privatization, explain the benefits of reform to the public, and move ahead with legislation. With many activities, such as postal services and air traffic control, we can look to the extensive experience from abroad about how to structure reforms.
It is true that reforms would face political hurdles, as interest groups defended the status quo. A British expert noted that “nearly every U.K. privatization was a struggle.“415 But the world is always changing, and that creates fresh opportunities for reform‐minded leaders. Margaret Thatcher dared not privatize the Royal Mail, but current Prime Minister David Cameron recently did so because it had become clear that a snail‐mail monopoly has no place in an email world.
America is still the dominant economy in the world, but the privatization revolution shows that we have a lot to learn about economic reforms from abroad. In many countries, politicians have let entrepreneurs take a crack at long‐sheltered government fiefdoms. American leaders should show the same boldness and let entrepreneurs replace federal bureaucracies wherever they can.
1. Worldwide privatization proceeds between 1988 and August 2015 were $3.26 trillion. See William L. Megginson, “Privatization Trends and Major Deals in 2014 and Two‐Thirds 2015,” in “The PB Report 2014/2015,” Privatization Barometer, www.privatizationbarometer.net. This amount does not include the privatizations done through distribution of free vouchers, which was common in Eastern Europe in the 1990s.
2. Peter F. Drucker, “The Sickness of Government,” The Public Interest 14 (Winter 1969): 4.
3. The word privatization was used occasionally in the mid–20th century, but it was Thatcher’s government that popularized it. See Germa Bel, “The Coining of ‘Privatization’ and Germany’s National Socialist Party,” Journal of Economic Perspectives 20, no. 3 (Summer 2006): 187–94. Initially, Thatcher did not like the word privatization, but other terms had shortcomings as well, and so she began using it publicly in 1981. See Charles Moore, Margaret Thatcher: At Her Zenith in London, Washington and Moscow (New York: Alfred Knopf, 2016), pp. 34, 39. Meanwhile, in the United States, economist Steve Hanke was helping popularize the word. See Dan Balz, “Once Riding High, Sagebrush Rebels Turn in Midstream,” Washington Post, April 10, 1982.
4. Organisation for Economic Co‐operation and Development (OECD), Privatising State‐Owned Enterprises (Paris: OECD, 2003), p. 21.
5. Chris Aulich and Janine L. O’Flynn, “From Public to Private: The Australian Experience of Privatisation,” Asia Pacific Journal of Public Administration 29, no. 2 (December 2007): 161. About $160 billion in federal and state privatization in Australian dollars is more than $100 billion in U.S. dollars.
6. William L. Megginson, The Financial Economics of Privatization (Oxford, U.K.: Oxford University Press, 2005), p. 17.
7. Dieter Brauninger, “Privatisation in the Euro Area: Differing Attitudes towards Public Assets,” Research Briefing, Deutsche Bank, August 20, 2013, p. 4. See also Dieter Brauninger, “Privatisation in the Euro Area: Governments Should Grasp Opportunities,” Research Briefing, Deutsche Bank, July 31, 2015, p. 5.
8. Alberto Chong and Florencio López‐de‐Silanes, “Privatization in Mexico,” Inter‐American Development Bank, August 2004, p. 8.
9. Julia Borrmann, et al., “The Privatisation Goldmine,” New Direction Foundation (Brussels), June 2013, p. 18.
10. The Labour government in the United Kingdom, the Liberal government in Canada, the Socialist government in France, the Labour government in New Zealand, and the Labor government in Australia all privatized.
11. Megginson, The Financial Economics of Privatization, p. 4.
13. William L. Megginson, “Privatization and Finance,” Annual Review of Financial Economics 2 (December 2010): 145–74.
14. Worldwide privatization proceeds between 1988 and August 2015 were $3.26 trillion. See Megginson, “Privatization Trends.”
15. The privatized Royal Mail delivers letters and packages. The government retained what is now called the Post Office, which is a retail chain providing postal and other services.
16. OECD, Privatising State‐Owned Enterprises,” p. 9.
17. William L. Megginson and Jeffry M. Netter, “From State to Market: A Survey of Empirical Studies on Privatization,” Journal of Economic Literature 39, no. 2 (June 2001): 25.
18. Robert Poole, “Ronald Reagan and the Privatization Revolution,” Reason Foundation, June 8, 2004.
19. The USEC sold uranium to nuclear utilities. The company filed for bankruptcy protection in 2014 in the wake of falling demand. It was restructured and adopted the name Centrus Energy. Intelsat was owned by a consortium of countries and was privatized by the Orbit Act of 2000.
20. Thatcher began using the word privatization publicly in 1981. See Moore, Margaret Thatcher: At Her Zenith, pp. 34, 39.
21. U.K. Department for Communities and Local Government, English Housing Survey: Headline Report 2014–2015 (London: U.K. Government, February 2016), Annex Table 1.1. A Guardian story said the drop was from 42 percent to 8 percent: John Harris, “The End of Council Housing,” The Guardian, January 4, 2016.
22. Margaret Thatcher, The Downing Street Years (New York: HarperCollins, 1993), p. 676.
24. Mark Milke, “The Iron Lady for a New Generation: Why Margaret Thatcher Mattered,” Fraser Forum, Fraser Institute, March/April 2012. Walters was in close contact with the Canadian Fraser Institute and was familiar with the institute’s book: Theodore M. Ohashi and T. P. Roth, eds., Privatization: Theory and Practice (Vancouver, British Columbia: The Fraser Institute, 1980). The book described privatization of the British Columbia Resources Investment Corporation, which was the largest Canadian share offering to that date.
25. Ohashi and Roth, Privatization: Theory and Practice.
26. For a discussion of privatization methods, see Organisation for Economic Co‐operation and Development, Privatisation in the 21st Century: Recent Experiences of OECD Countries (Paris: OECD, 2009).
27. Thatcher, The Downing Street Years, p. 680.
28. Megginson, The Financial Economics of Privatization, p. 15.
29. OECD, Privatising State‐Owned Enterprises, p. 24.
30. Moore, Margaret Thatcher: At Her Zenith, p. 211.
31. However, there was tension in some privatizations, such as with British Gas, between increasing industry competition and maximizing the sale value by privatizing companies as a single unit rather than splitting them up.
32. For example, see David Parker, “The UK’s Privatisation Experiment,” CESifo (Munich) Working Paper no. 1126, February 2004, p. 12.
33. Ibid., p. 22.
34. The table is based on various sources. One good source is Chris Rhodes, David Hough, and Louise Butcher, “Privatisation,” Research Paper 14/61, British House of Commons Library, November 20, 2014. Another is Megginson, The Financial Economics of Privatization, app. 1.
35. Peter Lloyd and Anne‐Mari Nevala, The Employment Impact of the Opening of Electricity and Gas Markets (Brussels: European Commission, March 2007), p. 14. See also Parker, “The UK’s Privatisation Experiment,” p. 12. Parker cites a smaller employment drop for gas.
36. Ryan Bourne and Tim Knox, “What Did Privatisation Do for Us?” Centre for Policy Studies Growth Bulletin no. 28, April 11, 2013. See also Stuart Holder, National Economic Research Associates, “Privatisation and Competition: The Evidence from Utility and Infrastructure Privatisation in the UK” (paper presented at 12th plenary session of OECD Advisory Group on Privatisation, Helsinki, September 1998).
37. Moore, Margaret Thatcher: At Her Zenith, p. 39.
38. Her Majesty’s Treasury, Implementing Privatisation: The UK Experience (London: HM Treasury, 1997), table 4.
39. Parker, “The U.K.‘s Privatisation Experiment,” pp. 15, 16, 41.
40. David M. Newbery and Michael G. Pollitt, “The Restructuring and Privatization of the U.K. Electricity Supply — Was It Worth It?” World Bank Viewpoint Note no. 124, September 1997.
41. Her Majesty’s Treasury, Implementing Privatisation, p. 14.
42. Parker, “The U.K.‘s Privatisation Experiment,” p. 16.
43. Holder, “Privatisation and Competition,” p. 20.
44. John Blundell, “The Miracle of Privatization,” The Freeman, September 1, 2000. See also Daniel Yergin and Joseph Stanislaw, The Commanding Heights (New York: Free Press, 1998), p. 101.
45. Bourne and Knox, “What Did Privatisation Do for Us?”
46. Yergin and Stanislaw, Commanding Heights, p. 97.
47. Emma Simon, “Thatcher’s Legacy: How Has Privatisation Fared?” Telegraph, April 12, 2013. See also Her Majesty’s Treasury, Implementing Privatization, p. 20.
48. Parker, “The U.K.‘s Privatisation Experiment,” p. 42.
49. Rhodes, Hough, and Butcher, “Privatisation,” chap. 10.
50. For a detailed examination, see John Hibbs et al., The Railways, the Market and the Government (London: Institute of Economic Affairs, 2006).
51. For example, see Richard Wellings, “The Privatisation of the U.K. Railway Industry,” Economic Affairs 34, no. 2 (June 2014): 255–66. See also the discussion in Hibbs et al., The Railways.
52. For a brief history, see John Hibbs, “Railways and the Power of Emotion: From Private to Public Ownership,” in Hibbs et al., The Railways.
53. Association of Train Operating Companies, Growth and Prosperity: How Franchising Helped Transform the Railway into a British Success Story (London: Association of Train Operating Companies, July 2013). See also the data set that goes with the report at
54. For the recent trip data, see U.K. Department of Trade and Investment, The U.K. Rail Industry: A Showcase of Excellence (London: U.K. Government, 2014). See the “Overall Passenger Growth” chart.
55. See historical data in Joseph Vranich, End of the Line: The Failure of Amtrak Reform and the Future of America’s Passenger Trains (Washington: American Enterprise Institute, 2004), p. 144.
56. Rico Merkert and Chris Nash, “The Restructuring of the Rail System in Britain,” in Hibbs et al., The Railways, pp. 81, 82. More recent data are at www.networkrail.co.uk/about/performance.
57. Paul Ormerod, “Evolutionary Approaches to Privatisation,” Economic Affairs 34, no. 2 (June 2014): 159.
58. Merkert and Nash, “Restructuring of the Rail System,” p. 83. See also Wellings, “Privatisation of the U.K. Railway Industry,” p. 259.
59. See the European Commission study discussed in Department of Trade and Investment, UK Rail Industry.
60. John Campbell, The Iron Lady (New York: The Penguin Group, 2009), p. 402.
61. U.K. National Audit Office, The Economic Regulation of the Water Sector (London: National Audit Office, October 14, 2015), p. 7.
62. Ofwat, The Development of the Water Industry in England and Wales (Birmingham, U.K.: Office of Water Services, January 2006). See also George Day, “An Insider’s View of U.K. Privatization,” Global Water Intelligence 3, no. 1 (January 2012); U.K. National Audit Office, The Economic Regulation of the Water Sector, p. 23; and Ofwat, “Leakage,”
63. Worldwide privatization proceeds between 1988 and August 2015 were $3.26 trillion. See Megginson, “Privatization Trends.”
64. William L. Megginson, Robert C. Nash, and Matthias Van Randerborgh, “The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis,” Journal of Finance 49, no. 2 (June 1994): 403–52.
65. Juliet D’Souza and William L. Megginson, “The Financial and Operating Performance of Privatized Firms during the 1990s,” Journal of Finance 54, no. 4 (August 1999): abstract.
67. Bernardo Bortolotti, Marcella Fantini, Domenico Siniscalco, “Privatisation around the World: Evidence from Panel Data,” Journal of Public Economics 88 (2003): 306.
68. Chong and López‐de‐Silanes, “Privatization in Mexico,” p. 5.
69. Ibid., abstract.
70. Anthony E. Boardman and Aidan R. Vining, “A Review and Assessment of Privatization in Canada,” School of Public Policy, University of Calgary, January 2012, summary.
71. Ibid., p. 21.
72. John Nellis, “The International Experience with Privatization: Its Rapid Rise, Partial Fall, and Uncertain Future,” School of Public Policy, University of Calgary, Alberta, Canada, January 2012, p. 13.
73. John Nellis, “Privatization: A Summary Assessment,” Center for Global Development Working Paper no. 87, March 2006, abstract.
74. Megginson and Netter, “From State to Market,” p. 25.
75. Ibid., p. 48.
76. Megginson, The Financial Economics of Privatization, p. 52.
77. Ibid., p. 66.
78. Economist Douglass North used the phrase adaptive efficiency to describe institutions that learn, adjust, take risks, are creative, and resolve bottlenecks. Adaptive efficiency relies on decentralized decisionmaking and the exploration of alternatives. See Douglass C. North, “Privatization, Incentives, and Economic Performance,” in The Privatization Process: A Worldwide Perspective (New York: Rowman & Littlefield, 1996), p. 26.
79. Drucker, “Sickness of Government,” p. 12.
80. Ibid., p. 21.
81. Andrei Shleifer, “State versus Private Ownership,” Journal of Economic Perspectives 12, no. 4 (Autumn 1998): 135.
82. Organisation for Economic Co‐operation and Development, Privatisation in the 21st Century: Recent Experiences of OECD Countries (Brussels: OECD, January 2009), p. 52.
83. Sunita Kikeri, “Privatization and Labor: What Happens to Workers When Governments Divest?” World Bank Technical Paper no. 396, 1997, p. 3.
84. OECD, Privatising State‐Owned Enterprises, endnote 11.
85. Nellis, “International Experience with Privatization,” p. 16.
86. R. Richard Geddes, “Reform of the U.S. Postal Service,” Journal of Economic Perspectives 19, no. 3 (Summer 2005): 226. See also Vincent Geloso and Youri Chassin, “Canada Post: Opening Up to Competition,” Montreal Economic Institute, May 2011.
87. Allison Padova, Federal Commercialization in Canada (Ottawa, ON: Library of Parliament, Government of Canada, December 20, 2005), p. 7.
88. D’Souza and Megginson, “Financial and Operating Performance,” pp. 1397–438.
89. Dorothy Robyn, “Alternative Governance Models for the Air Traffic Control System,” Brookings Institution, April 6, 2015.
90. U.K. Department of Energy and Climate Change, U.K. Energy Sector Indicators (London: U.K. Government, 2012), p. 12. More recently, there are concerns that increasing subsidies and regulations are reversing productivity gains in the U.K. energy industry. See Rupert Darwall, “United Kingdom’s Energy Market Is Back under State Control,”
CAPX.co, April 8, 2015, http://capx.co/britains-energy-market-is-back-under-state-control/.
91. U.K. Department of Trade and Investment, U.K. Rail Industry.
92. Stephen Smith, “Republicans Can Privatize Amtrak If They Want To,” Bloomberg View, September 26, 2012.
93. Fumitoshi Mizutani and Kiyoshi Nakamura, “The Japanese Experience with Railway Restructuring,” in Governance, Regulation, and Privatization in the Asia‐Pacific Region, National Bureau of Economic Research East Asia Seminar on Economics, vol. 12, ed. Takatoshi Ito and Anne O. Krueger (Chicago: University of Chicago Press, January 2004), table 12.3, www.nber.org/chapters/c10195.
94. Megginson and Netter, “From State to Market,” p. 27.
95. Sunita Kikeri, “Privatization and Labor: What Happens to Workers When Governments Divest?” World Bank Technical Paper no. 396, 1997, p. 10.
96. Chong and López‐de‐Silanes, “Privatization in Mexico,” p. 13.
97. Megginson, The Financial Economics of Privatization, p. 396.
98. Boardman and Vining, “Review and Assessment,” summary.
99. Ibid., p. 17.
100. Moore, Margaret Thatcher: At Her Zenith, pp. 189, 190.
101. Vranich, End of the Line, p. 5.
102. Randal O’Toole, “Stopping the Runaway Train: The Case for Privatizing Amtrak,” Cato Institute Policy Analysis no. 712, November 13, 2012.
103. Blundell, “The Miracle of Privatization.”
104. David R. Myddelton, “The British Approach to Privatisation,” Economic Affairs 34, no. 2 (June 2014): 134.
105. Thatcher, The Downing Street Years, p. 685.
106. Yergin and Stanislaw, Commanding Heights, p. 100. See also Moore, Margaret Thatcher: At Her Zenith, p. 38.
107. Moore, Margaret Thatcher: At Her Zenith, pp. 199, 201.
108. Office of U.S. Senator Tom Coburn, “Parked! How Congress’ Misplaced Priorities Are Trashing Our National Treasures,” October 2013.
109. Financial statements for Mount Vernon are available at
110. Michael A. Schuyler, “Troubles at the Postal Service,” Tax Foundation Fiscal Fact no. 481, September 2015. See also Michael A. Schuyler, “The Postal Service’s Market Grab,” in Mail @ the Millennium, ed. Edward L. Hudgins (Washington: Cato Institute, 2000).
111. Robert J. Shapiro, How the U.S. Postal Service Uses Its Monopoly Revenues and Special Privileges to Subsidize Its Competitive Operations (Washington: Sonecon, October 2015).
112. Ronald D. Utt, “President Obama Sees Amtrak as Key to America’s Transportation,” Heritage Foundation WebMemo no. 3206, March 28, 2011.
113. Vranich, End of the Line, pp. 2, 3, 12–35, 171.
114. Environmental Integrity Project, Outside the Law: Restoring Accountability to the Tennessee Valley Authority (Washington: Environmental Integrity Project, December 2009). See also Douglas A. Houston, “Privatization of the Tennessee Valley Authority,” Reason Foundation Policy Insight no. 106, October 7, 1988.
115. Environmental Integrity Project, Outside the Law, p. 2
116. Tennessee Valley Authority, Office of the Inspector General, Review of the Kingston Fossil Plant Ash Spill Root Cause Study and Observations about Ash Management, Inspection Report no. 2008–12283-02 (Knoxville, TN: TVA, July 23, 2009).
117. Ibid., p. 4.
118. Moore, Margaret Thatcher: At Her Zenith, p. 196.
119. Ofwat, “Leakage.”
120. John Samples and Emily Ekins, “Public Attitudes toward Federalism,” Cato Institute Policy Analysis no. 759, September 23, 2014, fig. 27.
121. American Customer Satisfaction Index, CS Federal Government Report 2014: Citizen Satisfaction with Federal Government Services Declines for Second Year (Ann Arbor, MI: ACSI, January 27, 2015),
122. Her Majesty’s Treasury, Implementing Privatisation, p. 14.
123. Yergin and Stanislaw, Commanding Heights, p. 101.
124. Merkert and Nash, pp. 81, 82. See also Ormerod, “Evolutionary Approaches,” p. 159.
125. Mizutani and Nakamura, “The Japanese Experience with Railway Restructuring,” table 12.3.
126. Ofwat, “The Development of the Water Industry in England and Wales,” January 2006. See also George Day, “An Insider’s View of U.K. Privatization,” Global Water Intelligence 3, no. 1 (January 2012); and U.K. National Audit Office, The Economic Regulation of the Water Sector.
127. Shleifer, “State versus Private Ownership,” p. 144.
128. Myddelton, “The British Approach to Privatisation,” p. 131.
129. Shleifer, “State versus Private Ownership,” p. 142.
130. U.S. Postal Service, “Our Plan to Preserve Rural Post Offices,” May 9, 2012.
131. Robert W. Poole, Jr., Organization and Innovation in Air Traffic Control (Washington: Hudson Institute, 2013), p. 39.
132. Ibid., p. 41.
133. Alan Levin, “Zombie Towers Live as Taxpayers Fund Flightless Skies,” Bloomberg Business, November 13, 2012.
134. OECD, Privatising State‐Owned Enterprises, figs. 1.8A and 1.8B.
135. Megginson, The Financial Economics of Privatization, p. 286.
136. Quoted in Gillian Tan, “Privatization Raises Billions in Australia, New Zealand,” Wall Street Journal, November 5, 2013.
137. Brauninger, “Privatisation in the Euro Area: Governments Should Grasp Opportunities,” p. 2.
138. Moya Greene is the chief executive officer of Royal Mail Group.
139. Poole, Organization and Innovation in Air Traffic Control, p. 46.
140. The business is part of General Dynamics’ Ordnance and Tactical Systems (Canada) group. See General Dynamics Corporation, www.gd-otscanada.com/about-us.
141. See Canadian Bank Note Company, www.cbnco.com.
142. OECD, Privatising State‐Owned Enterprises, p. 37.
143. Megginson, “Privatization and Finance.”
144. Megginson, The Financial Economics of Privatization, p. 232.
145. William L. Megginson and Maria K. Boutchkova, “The Impact of Privatisation on Capital Market Development and Individual Share Ownership” (paper presented at the Federation of International Stock Exchanges’ Third Global Emerging Markets Conference and Exhibition, Istanbul, Turkey, April 8, 2000). See also Megginson, The Financial Economics of Privatization, p. 232.
146. Megginson, The Financial Economics of Privatization, p. 234.
147. Simon, “Thatcher’s Legacy.” See also Her Majesty’s Treasury, Implementing Privatization, p. 20.
148. Megginson, The Financial Economics of Privatization, p. 293.
149. Ibid., pp. 232, 396.
150. Reagan said, “As recent experience in Great Britain shows, privatization also increases the public participation in the market system: By selling government‐owned enterprises, the number of families owning stock increased dramatically.” President Ronald Reagan, “Statement on the President’s Commission on Privatization,” September 3, 1987.
151. President’s Commission on Privatization, “Privatization: Toward More Effective Government,” (Washington: President’s Commission on Privatization, March 1988),
http://pdf.usaid.gov/pdf_docs/PNABB472.pdf. Some Reagan commission proposals were acted on in later administrations, including selling the Elk Hills oil reserves, substituting housing vouchers for public housing, and contracting out government services.
152. The law to privatize Conrail was passed in 1986, and the stock offering was in 1987. Congress had created the National Consumer Cooperative Bank in 1978.
153. Executive Order 12803, “Infrastructure Privatization,” April 30, 1992.
154. Steven Overly, “For USEC, a New Name, Centrus Energy, and Financial Footing,” Washington Post, September 20, 2014. The USEC sold uranium to nuclear utilities. The company filed for bankruptcy protection in 2014 in the wake of falling demand. It was restructured and renamed Centrus Energy.
155. This was the Orbit Act of 2000.
156. Adam Summers and Anthony Randazzo, Annual Privatization Report 2010: Federal Government Privatization, ed. Leonard Gilroy (Los Angeles, CA: Reason Foundation, February 2011), p. 23.
157. Geddes, “Reform of the U.S. Postal Service,” p. 219.
158. Robert J. Shapiro, The Basis and Extent of the Monopoly Rights and Subsidies Claimed by the United States Postal Service (Washington: Sonecon, March 2015).
159. Schuyler, “Troubles at the Postal Service.”
160. USPS, “Plan to Preserve Rural Post Offices.”
161. Shapiro, Basis and Extent of Monopoly Rights, p. 14.
162. U.S. Postal Service, “First‐Class Mail Volume Since 1926,” February 2016, https://about.usps.com/who-we-are/postal-history/first-class-mail-since….
163. The requirement was passed in the Postal Accountability and Enhancement Act of 2006.
164. See Consumer Postal Council, “Index of Postal Freedom” (Arlington, VA: Consumer Postal Council, 2012), www.postalconsumers.org.
165. The other 21 percent is held by a government‐owned bank.
166. The privatized Royal Mail delivers letters and packages. The government retained the “Post Office,” which operates a retail chain providing postal and other services.
167. Geloso and Chassin, “Canada Post.” See also Geddes, “Reform of the U.S. Postal Service.”
168. Robert D. Atkinson, “Postal Reform for the Digital Age,” Information Technology and Innovation Foundation, June 2013, p. 13.
169. Shapiro, “How the U.S. Postal Service Uses Its Monopoly.”
170. Ibid., p. 4.
172. Atkinson, “Postal Reform for the Digital Age.”
173. Elaine Kamarck, “Delaying the Inevitable: Political Stalemate and the U.S. Postal Service,” Brookings Institution, September 18, 2015.
174. Geddes, “Reform of the U.S. Postal Service,” p. 224.
175. Robert Carbaugh and Thomas Tenerelli, “Restructuring the U.S. Postal Service,” Cato Journal 31, no. 1 (Winter 2011): 140.
176. Don Soifer, Universal Postal Service in Major Economies (Arlington, VA: Consumer Postal Council, June 2015).
177. John Mazzone and Samie Rehman, The Household Diary Study in FY 2012 (Washington: USPS, May 2013), tables E.2. and 3.1. See also the discussion in James L. Gattuso, “Can the Postal Service Have a Future,” Heritage Foundation Backgrounder no. 2848, October 10, 2013.
178. Janet Granger, “How Americans Use the Postal Service: By the Numbers,” Pitney Bowes, blog entry, August 26, 2015, http://blogs.pb.com/mail-solutions/2015/08/26/postal-service-study/.
179. Email statistic from The Radicati Group, “Email Statistics Report, 2015–2019,” press release, March 2, 2015, www.radicati.com/?p=12964.
180. William J. Henderson, “End of the Route: I Ran the Postal Service — It Should Be Privatized,” Washington Post, September 2, 2001.
181. O’Toole, “Stopping the Runaway Train,” pp. 10–14.
182. Ernst & Young LLP, Amtrak, Consolidated Financial Statements, Years Ended September 30, 2014 and 2013, with Report of Independent Auditors, (McLean, VA: Ernst & Young LLP, October 1, 2015).
183. Jessica Chasmar, “Amtrak Loses Millions in Free Food, Alcohol for Weary Travelers: Report,” Washington Times, November 14, 2013.
184. Paul Nussbaum, “Amtrak’s On‐Time Performance Runs off the Rails,” Philly.com, August 1, 2014.
185. Author’s calculation based on data in Ernst & Young, Amtrak, Consolidated Financial Statements. In 2014 total employee wages and benefits were $2.1 billion, and the number of employees was about 20,000.
186. Diana Stancy, “Amtrak Paid $200m in Overtime to Employees in 2014,” Daily Signal, June 23, 2015.
187. Ernst & Young, Amtrak, Consolidated Financial Statements, p. 43.
188. Smith, “Republicans Can Privatize Amtrak.”
189. For example, see Government Accountability Office, Amtrak Management: Systemic Problems Require Actions to Improve Efficiency, Effectiveness, and Accountability, GAO-06–145 (Washington: GAO, October 2005).
190. Jim McElhatton, “Amtrak Misled Congress on Finances,” Washington Times, May 31, 2010.
191. See the Pew Charitable Trusts, “Subsidyscope — Transportation Sector,” November 24, 2009, www.pewtrusts.org/en/research-and-analysis.
192. O’Toole, “Stopping the Runaway Train,” table 2.
193. Pew, “Subsidyscope — Transportation.”
194. Government Accountability Office, Intercity Passenger Rail: National Policy and Strategies Needed to Maximize Public Benefits from Federal Expenditures, GAO-07–15 (Washington: GAO, November 2006), p. 4.
195. Vranich, End of the Line, pp. 139–40.
196. Ibid., pp. 195–202.
197. Ibid., p. 147.
198. U.K. Department of Trade and Investment, U.K. Rail Industry. See the “Overall Passenger Growth” chart.
199. Mizutani and Nakamura, “The Japanese Experience,” p. 335.
200. Vranich, End of the Line, p. 153. See also Mizutani and Nakamura, “The Japanese Experience.”
201. Mizutani and Nakamura, “The Japanese Experience,” table 12.3.
202. Ibid., p. 334
203. Vranich, End of the Line, p. 153.
204. O’Toole, “Stopping the Runaway Train,” fig. 6.
www.rockymountaineer.com/en_US/about_us/awards_accolades and www.rockymountaineer.com/en_US/about_us/our_history.
206. Vranich, End of the Line, p. 15.
207. Randal O’Toole, Gridlock: Why We’re Stuck in Traffic and What to Do About It (Washington: Cato Institute, 2009), p. 20.
208. Quoted in Vranich, End of the Line, p. 10.
209. Brian Hansen, “Future of Amtrak,” CQ Researcher, October 18, 2002, p. 845.
210. Ken Notis, Federal Subsidies to Passenger Transportation, (Washington: Department of Transportation, Bureau of Transportation Statistics, December 2004), table 3. See also Wendell Cox and Ronald Utt, “Federal Transportation Programs Shortchange Motorists: Update of USDOT Study,” Heritage Foundation Backgrounder no. 2283, June 8, 2009.
211. O’Toole, “Stopping the Runaway Train,” fig. 1.
212. Ibid., p. 10.
213. Cited in David Randall Peterman, John Frittelli, and Williams J. Mallett, “The Development of High Speed Rail in the United States,” Congressional Research Service Report no. R42584, December 20, 2013, p. 20.
214. Richard D. Obenshain, “Public Power and the TVA,” The Freeman, September 1, 1959.
215. Jim Powell, FDR’s Folly (New York: Crown Forum, 2003), chap. 11.
216. Tennessee Valley Authority, Form 10-K filed with the Securities and Exchange Commission, Fiscal Year Ended September 30, 2015, p. 13.
217. The Energy Policy Act of 1982 also created an “anti–cherry picking” rule that exempts the TVA from Federal Energy Regulatory Commission orders requiring utilities to provide transmission access to other companies.
218. Ken G. Glozer, “Time for the Sun to Set on the Tennessee Valley Authority,” Heritage Foundation Backgrounder no. 2904, May 6, 2014, p. 6.
219. TVA, Form 10-K, FY Ended September 30, 2015, p. 10.
220. Stephen Labaton, “Tennessee Valley Authority Generates Woes with Nuclear Power Program,” Washington Post, August 3, 1985.
221. Brian Dumaine, “Nuclear Scandal Shakes the TVA,” Fortune, October 27, 1986.
222. Tennessee Valley Authority, Office of the Inspector General, Navigating Risk: Semiannual Report, October 1, 2012 to March 31, 2013 (Knoxville, TN: TVA, 2013), p. 8. See also “T.V.A. Cancels 4 Reactors,” Associated Press, August 30, 1984.
223. Quoted in Powell, FDR’s Folly, p. 257.
224. Rebecca Smith, “U.S. Clears First New Reactor in Years,” Wall Street Journal, October 22, 2015. See also “TVA: Watts Bar 2 Cost Overruns Soar by $2B; Operation Delayed to 2015,” Power News, April 12, 2012, www.powermag.com.
225. Duane Gang, “6 Things to Know about TVA and Nuclear Power,” The Tennessean, August 29, 2014.
226. Lazard Frères & Co., “Strategic Assessment of the Tennessee Valley Authority, Form 8-K Current Report,” (Knoxville, TN: TVA, June 4, 2014), p. 38.
227. Chris Edwards and Nicole Kaeding, “Federal Government Cost Overruns,” Cato Institute Tax and Budget Bulletin no. 72, September 15, 2015.
228. Julie Johnsson and Mark Chediak, “Roosevelt’s TVA Seen as Hard Sell,” Bloomberg.com, April 15, 2013. See also Glozer, “Time for the Sun to Set,” table 6.
229. Tennessee Valley Authority, TVA Performance Report: Budget Proposal and Management Agenda for the Fiscal Year Ending September 30, 2016 (Knoxville, TN: TVA, February 2015), p. 10.
230. Daniel M. Pitts, “TVA Falls through Cracks as Plan Funding Deteriorates,” Pensions and Investments, May 26, 2014.
231. Duane W. Gang, “5 Years after Coal Ash Spill, Little Has Changed,” USA Today, December 23, 2013.
232. Environmental Integrity Project, Outside the Law, p. 2.
233. Gang, “5 Years after Coal Ash Spill.”
234. Environmental Integrity Project, Outside the Law, p. 15.
235. Ibid., p. 21.
236. Ibid., p. 16.
237. Ibid., p. vi.
238. Ibid., p. vii.
239. Ibid., p. 5
241. TVA, Review of the Kingston Fossil Plant.
242. Ibid., p. 4.
243. Ibid., p. 31.
244. Glozer, “Time for the Sun to Set,” p. 8.
245. Ibid. But Lazard Frères found that TVA retail rates are near the median of utilities in its region: Lazard Frères, “Strategic Assessment,” p. 34.
246. Glozer, “Time for the Sun to Set,” p. 8.
247. Lazard Frères, “Strategic Assessment,” p. 36.
248. Dave Flessner, “Top TVA Directors, Employees Given Millions in Bonuses,” Chattanooga Times Free Press, November 21, 2015.
250. “Public Government Salaries,” Right 2 Know Project, Chattanooga Times Free Press, 2012.
251. Flessner, “Top TVA Directors.”
252. Budget of the U.S. Government, Fiscal Year 2014 (Washington: Government Printing Office, 2013), p. 51.
253. In 1996 TVA established a $5 million executive retirement plan that neither Congress nor TVA’s inspector general knew about. In the late 1990s, the Chattanooga Times reported on hundreds of perhaps dubious nonbid contracts handed out by top managers. See Richard Munson, executive director, Northeast‐Midwest Institute, Testimony before the Senate Environment and Public Works Committee, 106th Cong., 1st Sess., October 6, 1999.
254. Johnsson and Chediak, “Roosevelt’s TVA Seen as Hard Sell.”
255. Glozer, “Time for the Sun to Set,” p. 14.
256. William Newman, “Obama and Reagan Agree: Divest the Tennessee Valley Authority,” Reason Foundation, October 8, 2013.
257. William Newman discusses TVA privatization options in Newman, “Obama and Reagan Agree.”
258. Dave Flessner, “Obama Softens Stance on Selling TVA,” Chattanooga Times Free Press, February 2, 2015.
259. “TVA Privatization Would Benefit All,” editorial, Chattanooga Times Free Press, April 14, 2013.
260. Federal Aviation Administration, Budget Estimates, Fiscal Year 2016 (Washington.: Department of Transportation, 2015), pp. 4, 10.
261. Poole, Organization and Innovation.
262. Ibid., p. 3.
263. Dorothy Robyn, “Air Support: Creating a Safer and More Reliable Air Traffic Control System,” Brookings Institution, July 2008, p. 2. See also Dorothy Robyn, “It’s Time to Corporatize Air Traffic Control (the Right Way),” Brookings Institution, September 28, 2015.
264. Robyn, “Air Support,” p. 16.
265. Ibid., pp. 6, 17.
266. Department of Transportation, Office of Inspector General, report discussed in “Cost Increases, Delays Cited in FAA Programs,” Washington Post, June 1, 2005.
267. Government Accountability Office, National Airspace System: FAA Has Made Progress but Continues to Face Challenges in Acquiring Major Air Traffic Control Systems, GAO-05–331 (Washington: GAO, June 2005), p. 1.
268. Government Accountability Office, Air Traffic Control Modernization: Management Challenges Associated with Program Costs and Schedules Could Hinder NextGen Implementation, GAO-12–223 (Washington: GAO, February 2012).
269. Department of Transportation, Office of Inspector General, FAA Reforms Have Not Achieved Expected Cost, Efficiency, and Modernization Outcomes, Audit Report no. AV-2016–015, (Washington: Department of Transportation, January 15, 2016), p. 10.
270. Ibid., p. 5.
271. Joan Lowy, “Watchdog: Too Few Air Traffic Controllers Where Needed Most,” Associated Press, January 26, 2016.
272. Cambridge Systematics, Inc., “Thanksgiving in the Skies: A Look at the Future of Air Travel in America,” (Washington: U.S. Travel Association, November 4, 2014), p. 5.
273. Eno Center for Transportation, Addressing Future Capacity Needs in the U.S. Aviation System (Washington: Eno, November 2013), p. 30.
274. U.S. House Transportation and Infrastructure Committee, “Summary of the Aviation Innovation, Reform, and Reauthorization Act of 2016,” http://transportation.house.gov/airr-act.
275. Nav Canada, “About Us,” www.navcanada.ca/en/about-us/Pages/default.aspx.
276. International Air Transport Association, “IATA Announces 2011 Eagle Awards,” press release, June 6, 2011.
277. Robyn, “Air Support,” pp. 19, 20.
278. Nav Canada, “Overview of Service Charges,” January 2015, www.navcanada.ca/EN/products-and-services/Documents/Service%20Charges-E….
279. Robyn, “Alternative Governance Models.”
280. Edward H. Stevens, “Time for a Paradigm Shift to Privatization and User Fees in the U.S.” The Journal of Air Traffic Control (Winter 2013): 36–39.
281. Nicholas Geer, Chairman of the Board, Nav Canada, Address at Annual General Meeting, Ottawa, Canada, February 7, 2013.
282. Paul Rinaldi, president, National Air Traffic Controllers Association, Testimony on Air Traffic Control Modernization before the U.S. Senate Committee on Commerce, Science, and Transportation, 114th Cong., 1st Sess., May 19, 2015.
283. National Air Traffic Controllers Association, “NATCA Announces Position on Air Traffic Control Reform Proposal,” press release, February 3, 2016.
284. Glen McDougall and Alasdair S. Roberts, “Commercializing Air Traffic Control: Have the Reforms Worked?” Suffolk University Law School Research Paper no. 09–11, February 17, 2009.
285. Ibid., p. 3.
286. Government Accountability Office, Air Traffic Control: Preliminary Observations on Commercialized Air Navigation Service Providers, GAO-05–542T (Washington: GAO, April 20, 2005).
287. James Salmon, “Britain’s Skies Up for Grabs as Government Resurrects Controversial Plan to Sell Its Stake in Air Traffic Control Provider,” ThisIsMoney.co.uk, November 25, 2015.
288. Bart Elias, “Air Traffic Inc.: Considerations Regarding the Corporatization of Air Traffic Control,” Congressional Research Service Report no. R43844, January 5, 2015.
289. The new entity would have been called the U.S. Air Traffic Services Corporation.
290. National Civil Aviation Review Commission, Avoiding Aviation Gridlock and Reducing the Accident Rate: A Consensus for Change, Final Report (Washington: National Civil Aviation Review Commission, December 1997), www.library.unt.edu/gpo/NCARC/index.htm.
291. Susan Carey, “Nav Canada Draws Interest in U.S.,” Wall Street Journal, October 18, 2015.
292. Carol Hardy Vincent, Laura A. Hanson, and Jerome P. Bjelopera, “Federal Land Ownership: Overview and Data,” Congressional Research Service Report no. R42346, December 29, 2014.
293. For further discussion, see Chris Edwards and Randal O’Toole, “Reforming Federal Land Management,” DownsizingGovernment.org, Cato Institute, February 1, 2012.
294. Vincent et al., “Federal Land Ownership.”
295. Shawn Regan, research fellow, Property and Environment Research Center, Testimony on Federal Land Acquisition and Its Impacts on Communities and the Environment before the Subcommittee on Federal Lands, House Committee on Natural Resources, 114th Cong., 1st Sess., April 15, 2015. See also Margaret Walls, “Federal Funding for Conservation and Recreation,” Resources for the Future Backgrounder, January 2009.
296. Juliet Eilperin, “In Massive Expansion of Lands Legacy, Obama Creates Three New National Monuments,” Washington Post, July 10, 2015.
297. Leonard Gilroy, “Pursuing Fiscal Self‐Reliance in Utah: Interview with Utah State Representative Ken Ivory,” Reason Foundation, November 27, 2013.
298. Grazing on public lands declined from 18.2 million “animal unit months” in 1954 to just 8.4 million by 2014. See Bureau of Land Management, “Fact Sheet on the BLM’s Management of Livestock Grazing,” January 11, 2016, www.blm.gov/wo/st/en/prog/grazing.html.
299. For example, see Carissa Wolf, Mark Berman, and Kevin Sullivan, “Oregon Ranchers Say Federal Rules Imperil Their Livelihoods,” Washington Post, January 5, 2016.
300. Jim Carlton and Dan Frosch, “Roots of Land Dispute Stretch Back Decades,” Wall Street Journal, January 6, 2016.
301. Terry L. Anderson, Vernon L. Smith, and Emily Simmons, “How and Why to Privatize Federal Lands,” Cato Institute Policy Analysis no. 363, November 9, 1999, p. 2.
302. Holly Fretwell and Shawn Regan, Divided Lands: State vs. Federal Management in the West (Bozeman, MT: Property and Environment Research Center, March 2015).
303. Government Accountability Office, “Highlights,” Livestock Grazing: Federal Expenditures and Receipts Vary, Depending on the Agency and the Purpose of the Fee Charged, GAO-05–869 (Washington: GAO, September 2005).
304. Congressional Budget Office, “Budget Options: Volume 2,” August 2009, p. 63.
305. Christine Glaser, Chuck Romaniello, and Karyn Moskowitz, Costs and Consequences: The Real Price of Livestock Grazing on America’s Public Lands (Tucson, AZ: Center for Biological Diversity, January 2015), fig. 5.
306. For background on grazing lands, see Bureau of Land Management, “Fact Sheet on the BLM’s Management of Livestock Grazing.”
307. B. Delworth Gardner, “Some Implications of Federal Grazing, Timber, Irrigation, and Recreation Subsidies,” Choices 12, no. 3 (Third Quarter 1997).
308. Shawn Regan, “Managing Conflicts over U.S. Federal Rangelands,” Property and Environment Research Center, January 8, 2016.
310. Steve H. Hanke, “The Privatization Debate: An Insider’s View,” Cato Journal 2, no. 3 (Winter 1982).
311. Regan, “Managing Conflicts.”
312. For example, see Paul C. Barton, “California National Parks among Those Threatened by Funding, Staffing Shortages,” Gannett, September 1, 2011.
313. Coburn, “Parked!” p. 22.
314. Government Accountability Office, Federal Real Property: Improved Transparency Could Help Efforts to Manage Agencies’ Maintenance and Repair Backlogs, GAO-14–188 (Washington: GAO, January 2014), table 1.
315. Coburn, “Parked!” p. 1.
316. Ibid., p. 10.
317. Ibid., p. 79.
319. John M. Glionna, “BLM, Local Law Enforcement Tensions Near Breaking Point in the West,” Los Angeles Times, August 4, 2014.
320. Lenny Bernstein and Brady Dennis, “A Horse‐Management Policy Gone Wild,” Washington Post, January 27, 2014.
321. Karin Brulliard, “Arizona Has a Wild Burro Problem,” Washington Post, March 4, 2016.
322. Edmund L. Andrews, “Interior Official Assails Agency for Ethics Slide,” New York Times, September 14, 2006.
324. Chris Edwards, “Indian Lands, Indian Subsidies, and the Bureau of Indian Affairs,” DownsizingGovernment.org, Cato Institute, February 2012.
325. Leonard Gilroy, Harris Kenny, and Julian Morris, “Parks 2.0: Operating State Parks through Public‐Private Partnerships,” Reason Foundation Policy Study no. 419, November 2013.
326. Margaret Walls, Sarah Darley, and Juha Siikamäki, The State of the Great Outdoors (Washington: Resources for the Future, September 2009), p. 33.
327. Katie Chang, 2010 National Land Trust Census Report (Washington: Land Trust Alliance, November 2011), p. 5. See also Walls et al., The State of the Great Outdoors.
328. Land Trust Alliance, 2014 Annual Report (Washington: Land Trust Alliance, 2014). See also Chang, 2010 National Land Trust Census Report.
329. Chang, 2010 National Land Trust Census Report, p. 8.
334. Brian Seasholes, “Socialized Land Ownership in a Democracy,” Daily Caller, December 9, 2015. See also Gilroy, “Pursuing Fiscal Self‐Reliance in Utah”; and www.AmericanLandsCouncil.org.
335. General Services Administration, “Federal Real Property Report, Fiscal Year 2014,” April 30, 2015. Data set is available at www.gsa.gov/portal/content/102880.
337. Federal Real Property Council, FY 2007 Federal Real Property Report (Washington: General Services Administration, May 2008), www.gsa.gov/graphics/ogp/FRPP_FY07.pdf. The government stopped including the total value estimate after this report.
338. Government Accountability Office, High‐Risk Series: An Update, GAO-05–207 (Washington: GAO, January 2005).
339. House Committee on Transportation and Infrastructure, Republican Staff, “Sitting on Our Assets: The Federal Government’s Misuse of Taxpayer‐Owned Assets,” 111th Cong., October 2010.
340. Government Accountability Office, High‐Risk Series.
341. Office of Management and Budget, “National Strategy for the Efficient Use of Real Property: 2015–2020,” March 25, 2015, p. 2.
342. Garrett Hatch, “Disposal of Unneeded Federal Buildings: Legislative Proposals in the 113th Congress,” Congressional Research Service Report no. R43247, September 27, 2013, p. 1.
343. Government Accountability Office, Federal Real Property: Improved Standards Needed to Ensure That Agencies’ Reported Cost Savings Are Reliable and Transparent, GAO-14–12 (Washington: GAO, October 2013), p. 4.
344. Government Accountability Office, Federal Real Property: National Strategy and Better Data Needed to Improve Management of Excess and Underutilized Property, GAO-12–645 (Washington: GAO, June 2012).
345. Hatch, “Disposal of Unneeded Federal Buildings.”
346. Government Accountability Office, Federal Real Property: National Strategy, p. 8.
347. Hatch, “Disposal of Unneeded Federal Buildings.”
348. Adam Summers and Anthony Randazzo, Annual Privatization Report 2011: Federal Government Privatization, ed. Leonard Gilroy and Harris Kenny (Los Angeles, CA: Reason Foundation, April 2012), p. 19.
349. President Barack Obama, “Presidential Memorandum: Disposing of Unneeded Federal Real Estate,” June 10, 2010.
350. Gregory Korte, “White House Identifies Unneeded Government Property,” USA Today, May 4, 2011.
351. Office of Management and Budget, “National Strategy.” See also Office of Management and Budget, “Manage Real Property Efficiently,” www.performance.gov/initiative/manage-property/home. The GAO is skeptical of the administration’s claimed savings. See Government Accountability Office, “Managing Federal Real Property,” High‐Risk Series: An Update, GAO-15–290 (Washington: GAO, February 2015), p. 139.
352. General Service Administration, “Federal Real Property Report, Fiscal Year 2014,” April 30, 2015. Data set is available at www.gsa.gov/portal/content/102880. Valuation data are from Federal Real Property Council, FY 2007 Federal Real Property.
353. General Services Administration, “Federal Real Property Report, Fiscal Year 2014,” April 30, 2015. Data set is available at www.gsa.gov/portal/content/102880.
356. HM Treasury, “Right to Contest: New Plan to Speed Up Sale of Public Land and Property,” news release, January 8, 2014, www.gov.uk.
357. U.S. Energy Information Administration, “Federal Power Marketing Administrations Operate across Much of the United States,” Today in Energy, June 12, 2013.
358. National Rural Electric Cooperative Association, “Power Marketing Administrations (PMAs) & the Federal Power Program,” Fast Facts, February 2013.
359. Government Accountability Office, Power Marketing Administrations: Their Ratesetting Practices Compared with Those of Nonfederal Utilities, GAO/AIMD-00–114 (Washington: GAO, March 2000), p. 37.
360. Budget of the U.S. Government, Fiscal Year 2016, Analytical Perspectives (Washington: Government Printing Office, 2015), table 29–1.
361. For background on PMA pricing, see Kyna Powers, “Power Marketing Administrations: Proposals for Market‐Based Rates,” Congressional Research Service Report no. RL32798, March 11, 2005. See also Congressional Budget Office, Budget Options (Washington: Government Printing Office, February 2005). The Congressional Budget Office says that increasing PMA rates to market levels would raise $220 million a year for the government.
362. Congressional Budget Office, Should the Federal Government Sell Electricity? (Washington: Government Printing Office, November 1997), p. xiii.
364. Ibid., p. 21.
365. Bonneville was a major player in a project of the Washington Public Power Supply System (WPPSS) to build five nuclear plants in the 1970s. Only one of the five was completed, and WPPSS defaulted on the related bonds.
366. Congressional Budget Office, Should the Federal Government Sell Electricity?, p. 13.
367. Douglas G. Hall and Kelly S. Reeves, A Study of United States Hydroelectric Plant Ownership (Idaho Falls, ID: Idaho National Laboratory, June 2006), p. 2.
368. Cited in Chris Edwards, “Cutting the Army Corps of Engineers,” DownsizingGovernment.org, Cato Institute, March 2012.
369. Michael Grunwald, “An Agency of Unchecked Clout,” Washington Post, September 10, 2000.
371. Michael Grunwald, “The Floods: A Man‐Made Disaster?” Time, June 25, 2008.
372. Marc Reisner, Cadillac Desert (New York: Penguin, 1993), p. 172.
373. Arthur E. Morgan, Dams and Other Disasters: A Century of the Army Corps of Engineers in Civil Works (Boston: Porter Sargent, 1971).
374. David Hosansky, “Reforming the Corps,” Congressional Quarterly, May 30, 2003.
375. Hall and Reeves, Hydroelectric Plant Ownership, p. 2.
376. The Bureau of Reclamation owns 76 hydroelectric power plants, but 23 are operated by nonfederal entities. See www.usbr.gov/power/who/who.html.
377. Richard W. Wahl, Markets for Federal Water Subsidies: Subsidies, Property Rights, and the Bureau of Reclamation (Washington: Resources for the Future, 1989), p. 13.
378. Chris Edwards and Peter J. Hill, “Cutting the Bureau of Reclamation and Reforming Water Markets,” DownsizingGovernment.org, Cato Institute, February 2012.
379. William H. Holmes, “Dams for Sale: The Ins and Outs of Federal Facility Transfers,” Annual Institute Proceedings, vol. 43 (Westminster, CO: Rocky Mountain Mineral Law Foundation, 1997).
380. Terry L. Anderson, Brandon Scarborough, and Reed Watson, Tapping Water Markets (Washington: Resources for the Future Press, 2012), p. 364. That was the number as of 2006.
381. Senate testimony cited in Holmes, “Dams for Sale.” See also Dan Keppen, executive director, Family Farm Alliance, Testimony before the House Committee on Natural Resources, Subcommittee on Water and Power, 110th Cong., 2nd Sess., September 25, 2008.
382. Daniel P. Beard, Deadbeat Dams (Boulder, CO: Johnson Books, 2015), p. 1.
383. House Committee on Homeland Security, Subcommittee on Transportation Security, Majority Staff Report, Rebuilding TSA into a Smarter, Leaner Organization (Washington: Government Printing Office, September 2012), p. 1.
384. House Committee on Transportation and Infrastructure and House Committee on Oversight and Government Reform, Joint Majority Staff Report, A Decade Later: A Call for TSA Reform (Washington: Government Printing Office, November 16, 2011), pp. 2, 18.
385. Kip Hawley, “Why Airport Security Is Broken and How to Fix It,” Wall Street Journal, April 15, 2012. Hawley was TSA administrator from 2005 to 2009.
386. Ashley Halsey III, “Why the TSA Catches Your Water Bottle, but Guns and Bombs Get Through,” Washington Post, June 3, 2015.
387. Cited in Keith Laing, “Napolitano Worried about TSA Job Morale,” The Hill, July 19, 2012.
388. See a summary of the report General Accountability Office, Transportation Security: TSA Could Strengthen Monitoring of Allegations of Employee Misconduct, GAO-13–624 (Washington: GAO, July 30, 2013), in Ruth Tam, “TSA to Reform Misconduct Review Policy,” Washington Post, August 1, 2013. See also Caitlin O’Neil, “400 TSA Employees Fired for Stealing from Passengers from 2002 to 2011,” WCPO.com, October 24, 2012.
389. House Committee on Transportation and Infrastructure and House Committee on Oversight and Government Reform, “A Decade Later,” p. 2.
390. Discussed in Chris Edwards, “TSA Wastes $1 Billion on SPOT,” Cato at Liberty, November 14, 2013, www.cato.org/blog/tsa-wastes-1-billion-spot.
391. Discussed in Chris Edwards, “The Naked Truth about TSA Spending,” Cato at Liberty, September 11, 2014, www.cato.org/blog/naked-truth-about-tsa-spending.
392. Discussed in Chris Edwards, “Privatizing the Transportation Security Administration,” Cato Institute Policy Analysis no. 742, November 19, 2013.
393. Budget of the U.S. Government, Fiscal Year 2016, table 29–1.
394. Employment numbers from Office of Personnel Management, “Employment Cubes,” FedScope: Federal Human Resources Data, www.fedscope.opm.gov/employment.asp.
396. Department of Veterans Affairs, Office of Inspector General, Veterans Health Administration: Review of Alleged Mismanagement at the Health Eligibility Center, 14–01792-510 (Washington: Department of Veterans Affairs, September 2, 2015), www.va.gov/oig/pubs/VAOIG-14–01792-510.pdf.
397. Government Accountability Office, VA Construction: Additional Actions Needed to Decrease Delays and Lower Costs of Major Medical‐Facility Projects, GAO-13–556T (Washington: GAO, May 7, 2013), table 1.
398. Ibid., p. 6.
399. Department of Veterans Affairs, Office of Inspector General, Veterans Health Administration: Review of Alleged Patient Deaths, Patient Wait Times, and Scheduling Practices at the Phoenix VA Health Care System, 14–02603-267 (Washington: Department of Veterans Affairs, August 26, 2014).
400. Department of Veterans Affairs, Review of Alleged Mismanagement.
401. Rob Nabors, Deputy White House Chief of Staff, “Issues Impacting Access to Timely Care at VA Medical Facilities,” June 27, 2014, www.whitehouse.gov/sites/default/files/docs/va_review.pdf.
402. Jim Kuhnhenn, “VA Review Finds Significant and Chronic Failures,” Associated Press, June 28, 2014.
403. The 2014 law was the Veterans Access, Choice and Accountability Act.
404. Michael F. Cannon and Christopher A. Preble, “The Other Veterans Scandal,” op‐ed, New York Times, June 15, 2014.
405. Office of Management and Budget, “Proposed Revision to Office of Management and Budget Circular no. A-76,” Federal Register, vol. 67, no. 223 (November 19, 2002), p. 69771.
406. Federal outsourcing policy is guided by OMB Circular A-76 as well as the Federal Activities Inventory Reform Act of 1998.
407. Summers and Randazzo, Annual Privatization Report 2010, p. 23. See also www.acq.osd.mil/housing.
408. A group that focuses on this issue is the Business Coalition for Fair Competition, www.governmentcompetition.org.
409. John Palatiello, Annual Privatization Report 2014: Federal Government Privatization, ed. Leonard Gilroy (Los Angeles, CA: Reason Foundation, June 2014). See also John Palatiello, Annual Privatization Report: Federal Government Privatization, ed. Leonard Gilroy (Los Angeles, CA: Reason Foundation, May 2015).
410. Department of the Treasury, “Status Report of U.S. Government Gold Reserve,” December 31, 2015,
411. The SPR inventory is listed at www.spr.doe.gov/dir/dir.html.
412. For background, see Jerry Taylor and Peter Van Doren, “The Case against the Strategic Petroleum Reserve,” Cato Institute Policy Analysis no. 555, November 21, 2005.
413. Chris Edwards, “Infrastructure Investment,” DownsizingGovernment.org, Cato Institute, August 1, 2013.
414. Jonathan M. Karpoff, “Public versus Private Initiative in Arctic Exploration: The Effects of Incentives and Organizational Structure,” Journal of Political Economy 109, no. 1 (2001).
415. Myddelton, “The British Approach to Privatisation,” p. 137.