Lost Horizons, New Horizons

A CONTINUING AND DEFINITE NEED

By the late 1940s, the majority of American farmers had electricity. Cooperatives then focused on more pressing issues. In 1949, Congress appropriated money for companies and cooperatives to set up rural telephone service. However, presidential support for REA and its programs ended in 1952 with the election of Dwight Eisenhower. A Republican, Eisenhower was eager to restrain government involvement in private enterprise. At the time, the Cold War was in full force so many politicians supported him and accused public agencies of being socialist or even communist. The Eisenhower administration slashed funding and vetoed pro-REA legislation such as the Humphrey-Price Bill, which would have given loan-making authority only to the REA administrator.

After President Eisenhower left office, both President Kennedy and President Johnson supported REA and did not interfere with cooperatives. However, REA once again faced budget cuts and political pressure with the election of President Nixon. On December 29, 1972, President Nixon issued an executive order that eliminated REA and replaced it with a 5% loan program from private resources to be insured by the government under a provision in the new Rural Development Act of 1972.

NRECA and rural cooperatives around the country mobilized immediately to counter Nixon's move. They lobbied their congressional representatives asking them to take action. When Congress returned to session, Senator Humphrey and Senator Aiken of Vermont introduced an amendment to the bill that affirmed Congress's power to appropriate REA funds and give authority to the REA administrator. President Nixon agreed not to veto the bill once cooperatives consented to abandon a compulsory provision directing REA to use the appropriated funds in its entirety. However, anticipating budget cuts and appropriation reductions, NRECA and other cooperative leaders had organized the National Rural Utilities Cooperative Finance Corporation in 1969 to supplement their funding.

Facing increased interest loans, government cutbacks, and increasing energy costs, NRECA and the cooperatives boosted self-sufficient power generation and financial independence from public and private entities through a variety of methods.