Obsolete Federal Agency Spends Your Tax Dollar On Power, And Pollution

Last week, a trio of environmental organizations filed suit challenging a federally subsidized loan for a coal-fired power plant near Great Falls, Montana.

Few should be surprised that Uncle Sugar often uses taxpayers' money in dumb ways, but even cynics may be surprised that there is a federal program that, in effect, pays utilities to emit greenhouse gases.

Let's take a tour down Alice in Wonderland Lane and explore how this came to be.

First, take a trip back in time to the mid-1930s and plant yourself in a farmhouse in some backwater county.

You keep food in an icebox. You cook it on a wood stove. You do dishes and laundry by hand. And you read by candlelight.

Life is hard. So, it's no wonder that you cheer the arrival of the New Deal's Rural Electrification Administration and its promises to bring light to the country darkness.

That, however, was 70 years ago. Rural America is electrified. The REA, now known as the Rural Utilities Service (RUS), should be thanked for a job well done and closed down.

Instead, an obsolete agency in search of immortality hangs on, peddling subsidized power plant loans to rural electric co-ops. Now, you could make a case for such financing in order to help new energy technology get a leg up in the marketplace.

But that's not what is happening here. The enviros' lawsuit lists RUS plans to subsidize eight power plants, with a total capacity of nearly 3,000 megawatts, that would burn pulverized coal, the cheap and dowdy incumbent of power plant technology. Once up and running, those plants will let loose millions of tons of greenhouse gas emissions.

In their dash for federal cash, leaders of co-ops proposing the plants may have overlooked the broader public interest. Perhaps they'd like to know that global warming might not be kind to farm country. Think desiccated soils and heat stress on temperature-sensitive crops.

Challenges to RUS loan subsidies have come from good-government groups across the spectrum, from the Cato Institute on the right to Public Citizen on the left. President Bush's proposed 2008 budget calls for canning the program.

Such broad-based opposition may be no match, however, for the iron triangle of interest groups, congressmen, and bureaucracies. Rural electric co-ops are politically powerful. Earlier this year, 3,000 co-op supporters swooped through congressional offices in a lobbying onslaught organized by the National Rural Electric Cooperative Association.

There is nothing new about beneficiaries of government largesse predicting the demise of all that is good and true if their chow line is closed down. But subsidizing conventional coal plants is much more than a pork-barrel gimme that pokes taxpayers in the eye. Considering the risks that climate change poses to human society, it is nothing less than government malfeasance.