What does "Reduced Power, Traction Fault" mean?

GM's power strategy will reduce power if it doesn't see proper charging. It does this to conserve battery power by shutting off non-essential electrical accessories. It can also mean that the traction control system is reducing engine power to avoid a skid. The traction control system gets input data from the wheel speed sensors to figure out if you're entering a skid or the wheels are locking up. One way to get you out of the skid is to reduce engine power or pump your ABS brakes. In your case you should get the trouble codes read. An ABS or traction code code could be a C, U or B code which can't be seen by a cheap scan tool or the tools they use at auto parts stores. GM had major problems with the ABS wheel speed sensors built into the wheel bearing hubs in these vehicles. The fix involved replacing the hub. So get the codes read by a pro scanner to find out which wheel sensor is setting the code. Then do the fix. Also, the P0128 is usually caused by a bad thermostat. Fix that first, because if the engine doesn't get up to operating temperature, the computer can limit some features.
Read these posts for more trouble code information
http://ricksfreeautorepairadvice.com/p0128/
http://ricksfreeautorepairadvice.com/abstcs-light/