- The Washington Times - Wednesday, March 22, 2000

In the name of rural development, taxpayers now subsidize projects that help bring telephone service and electricity to the countryside. At least that's what's supposed to happen. Two new reports have found that about all that's expanding are the bank accounts of the companies that are supposed to be doing the work.

Under the existing statute, the Rural Utilities Service (read: taxpayers) guarantees loans to telephone companies and electric utilities who expand or maintain service to rural areas by, for example, laying new lines or replacing old ones. With the guarantee in hand, the companies can then go to banks and insist on getting lower loan rates on their projects.

Instead of using the loans for service expansion, however, many of the electric utility recipients turned around and invested in government securities, stocks, bonds, real estate and other non-rural investments. Out of $1.1 billion in loans, according to the audit, just 0.5 percent actually went to local business projects or rural infrastructure. Meanwhile a February inspector general's report found that the bulk of telephone loans went to companies that didn't need federal assistance. Some 90 percent had net worth of more than $1 million.

Now comes word that Congress is considering a new loan guarantee program to help bring local television signals to rural areas all in the name of the "have-nots" of course. Please. These programs only help the "haves" get even more. Congress should pull the plug on utility loan programs like these.

• CLARIFICATION: In Monday's editorial "Taiwan's way of the future," conventional spelling of the name of the prime minister of the People's Republic of China was not used. According to the Chinese embassy, the preferred spelling is Zhu Rongji.

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