WASHINGTON -- President Reagan will urge the sale to private industry of more federal functions and property than any president when he submits his 1987 budget Feb. 4.
What has been dubbed the 'selling of the government' to save tax dollars and comply with the deficit-slashing provisions of the new Gramm-Rudman law reportedly will include the sale of two federally owned airports, a railroad, four regional power agencies and their electricity-generating dams and weather satellites.
The 'privatization' proposals the president will place before Congress when he submits his budget for fiscal year 1987 -- which begins Oct. 1 -- are but a fraction of the dozens of suggestions made by cost-cutting study panels and by business and conservative groups such as the Heritage Foundation.
These groups want private industry to replace Uncle Sam as the owner or manager of the space shuttle program, military commisaries, Veterans Administration hospitals, national parks, the Federal Housing Administration, the Postal Service, Amtrak passenger rail service, Coast Guard search and rescue operations and the legal services system.
While Reagan may philosophically embrace such goals, his 'privatization' agenda in the 1987 budget apparently will be far less ambitious.
But based on budget details that have surfaced so far, Reagan will make more privatization proposals than any president has ever recommended.
'It's going to be the greatest effort to return the provision of goods and services to the private sector that we've seen in this century,' Richard Fink, president of Citizens for a Sound Economy, a pro-privatization group, said.
But what Reagan proposes and what Congress approves may be very different.
There is strong opposition to selling off government functions, as seen in the public and congressional uproar in Reagan's first term when he proposed selling off the government's weather satellites as well as thousands of acres of public land. Both proposals failed.
Many government programs and services have rigid regional or special interest support as well as powerfully entrenched defenders on Capitol Hill.
Asked last week about the anticipated privatization efforts, House Speaker Thomas O'Neill, D-Mass., said such moves are 'a sign of tremendous weakness' in the government.
'It's an admission that you're in pretty bad shape when you have to sell the garage to pay the mortgage on the house,' said O'Neill.
Among Reagan's major privatization proposals are the sales of:
-Conrail, the federally owned freight rail system created by the government in 1976 after the Penn Central railroad's bankruptcy. Reagan has already asked Congress to approve a $1.2 billion sale to Norfolk Southern Corp., a major Eastern railroad. But a higher bid of $1.4 billion by the Morgan Stanley investment banking firm has slowed the effort.
Critics claim the Norfolk Southern offer is too low,given the government's $7 billion investment in Conrail. They also say the government would lose an estiamted $400 million in taxes over five years when Norfolk Southern absorbs Conrail's tax advantages and the merger of the two giant rail systems would create anti-trust problems by severely curtailing competition in the Northeast and Midwest for the transport of coal, grain and other bulk items.
Privatization advocates believe the Conrail sale will be a bellwether for other efforts to transfer government functions or services to private industry.
'If we were not able to succeed on Conrail, it would be difficult on other issues,' said Jack Albertine, head of a group called the Coalition of Americans for Privatization, which was formed in support of the Conrail sale but which also has a longer agenda.
-Washington National and Dulles International airports for $47 million -- paid over 35 years -- to a regional government authority of officials from Virginia, Maryland and the District of Columbia. The transfer would save the government up to $300 million in badly needed airport improvements.
'I think those are definitely on the Reagan agenda,' said Fink.
-Four regional power agencies that produce and transmit electricity at reduced federally subsidized rates to millions of Americans who live in Western and Southern states.
The agencies Reagan reportedly wants to sell are the Bonneville Power Administration in Washington state, which sells electricity in the Pacific Northwest; the Southeastern Power Administration, which generates and sells power in 10 states from West Virginia to Florida; the Southwestern Power Administration, which serves several South Central States such as Oklahoma; and the Western Area Power Administration, based in Denver, which serves 5 million customers in 15 Western states.
In addition, Reagan is expected to try again to sell government weather satellites and he will probably urge that a variety of federal services be contracted out to private firms.
