WASHINGTON-GOP congressional leaders and the Clinton administration agreed on another short-term funding bill late last week to avert a third shutdown and an unprecedented government default, a looming prospect that could make credit more expensive for firms building capital-intensive digital pocket telephone systems.
Meanwhile, Republicans apparently have given up trying to reach a seven-year balanced budget deal with the White House and offered instead a modest package of spending and tax cuts as a “down payment” toward that goal. Budget issues the two sides cannot agree on will be put aside until after the November election.
“Barring a dramatic change of heart on President Clinton’s part, I don’t expect us to get a seven-year balanced budget while President Clinton is in office,” said Newt Gingrich (R-Ga.), speaker of the House.
That means expanded spectrum auction authority sought by Congress, the administration and the Federal Communications Commission is dead, unless it gets a new legislative boost.
The collapse of budget talks also is a huge blow to the FCC because lawmakers are apt to fund it at 75 percent of last year’s $186 million budget, or $138 million. A House-Senate appropriations panel settled on $175.7 million for the FCC this year, below the $225 million asked for by the agency.
FCC Chairman Reed Hunt said the agency cannot implement telecommunications reform legislation or relocate to the new Portals facility under tight fiscal constraints.
The agency currently is auctioning nearly 500 other wireless telephone licenses, and will sell more later this year.
Meanwhile, interest payments due Feb. 15 require the $4.9 trillion debt ceiling to be raised. A default could set off a financial crisis leading to a recession. The White House urged the Republican-led Congress to increase the debt ceiling and GOP leaders are willing to do so, but only as part of a stop-gap funding bill with some strings attached Clinton may not like.
A government default would raise interest rates for PCS firms needing to borrow money to acquire and build systems, which can run into the hundreds of millions-even billions-of dollars.
Treasury Secretary Robert Ruben has been able to avoid a default by tapping into civil service pension funds, but says no such options are left.
Congressional and administration negotiators faced a midnight Friday deadline to come up with money to keep many federal agencies without appropriations, like the FCC, running through March 15. Eliminating the Commerce Department, which houses the National Telecommunications and Information Administration, is one condition that was proposed but appears to have been taken off the table.
President Clinton, in Tuesday’s State of the Union Address, challenged Congress to pass a straightforward extension of the debt limit and to not shut down the federal government again.
