There’s a virtual reality about government spending these days. Just ask Rep. David Obey (D-Wis.), ranking minority member of the House Appropriations Committee.
Faced with GOP cuts in Clinton-proposed budgets for the Federal Communications Commission, the Commerce Department and other agencies in fiscal 2001, Obey observed, “To me, the issue is do we get real early or get real later.”
Obey’s blunt remark, delivered during subcommittee markup of the House Commerce appropriations bill last Tuesday evening, goes to the heart of new budget surplus politics and the rejuvenated role of spectrum auctions.
Strict spending limits imposed by Congress in 1997 were premised on the expectation that erasing the budget deficit would happen later rather than sooner. Just the opposite happened.
As such, the debate has shifted to how excess government cash should be spent. Republicans are hot for tax cuts; Democrats want pet social programs funded. Whether core government activities are adequately financed is an afterthought.
Obey, for example, warned that benefits promised by the U.S.-China trade deal are unlikely to materialize without money to monitor and enforce the agreement. Obey said experts tell him China won’t play by the rules on its own.
A major reason spectrum auctions were such a big hit with Congress and the Clinton administration in the mid-1990s is they raised billions of dollars at a time when policy-makers were struggling to erase the budget deficit.
Logic suggests spectrum auctions might be de-emphasized with the arrival of budget surpluses. Not so. Congressional appropriators, strapped by ’97 spending caps and given little leeway by the budget gods, are forced to operate in deficit-like conditions. That means there’s as much-if not more-pressure to find sources of revenue today than there was in budget-deficit days of yore.
Perhaps that explains why the Kennard FCC-backed by key Senate lawmakers-stubbornly insists on taking NextWave Telecom Inc.’s licenses (via prolonged litigation and/or legislation) and re-auctioning them rather than pocketing the $5.5 billion offered by the firm.
It is, of course, about the money. More money. Why else would the FCC delay the introduction of new broadband wireless services to the market? No doubt budgeteers have taken note of the $35 billion generated by the U.K. spectrum auction last month.
Some make no secret that it’s about the money.
Rep. Hal Rogers (R-Ky.), chairman of the House Commerce appropriations subcommittee, lamented that-unlike the Senate-he could not count on $500 million from re-auctioned wireless licenses in his bill.
Given recent spectrum valuations here and abroad, a Senate appropriations staffer predicted the $500 million figure will be adjusted upward. The sky’s the limit.
