NCPA - National Center for Policy Analysis

Waste Always Has A Constituency

August 21, 1995

Why do federal programs like rural electrification, the helium program and the strategic petroleum reserve continue to exist? Because the employees form special interest groups that become powerful lobbies for their particular waste. The Rural Electrification Administration (REA) shows how self interest applies:

  • The REA completed its New Deal mission of wiring the countryside by the 1950s, but continued as a subsidized loan agency for less impoverished and rural locales, like Hilton Head, SC.
  • Reborn last year as the Rural Utilities Service (RUS) and slated for a $165 million increase in loan authority to $1.1 billion, its mission now is to build an on-ramp to the information superhighway in rural America.
  • The RUS-subsidized loans cost taxpayers $89 million annually, but the National Rural Electric Cooperative Association has an annual budget of $43 million to lobby and reward politicians who vote for rural development.

Source: Rob Norton, "Why Federal Programs Won't Die," Fortune, August 21, 1995.


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