Super Committee Struggles for Consensus as Deadline Nears
With the Thanksgiving deadline fast approaching for the Joint Select Committee on Deficit Reduction, observers are growing skeptical that the super committee will meet its goal of finding $1.5 trillion in deficit reduction. Democrats and Republicans on the special committee seem to agree spectrum auctions should be included, but they continue to disagree on larger, unrelated issues, Hill and industry officials said. Auctions could still make the cut in a smaller package to mitigate an automatic, across-the-board budget cut in January 2013 known as a sequester, telecom industry lobbyists said.
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A summary of the Democratic proposal leaked late last week did not specifically list spectrum auctions. But the Information Technology Industry Council believes spectrum is included under the header “miscellaneous revenue provisions,” estimated in the document to raise $350 billion, ITIC Government Relations Director Vince Jesaitis said in an interview. Spectrum auctions appeared in a GOP plan summary that leaked last month (CD Nov 1 p9), and all indications have been that it’s still there, Jesaitis said. The super committee must issue recommendations by Nov. 23 and Congress must vote on them by Dec. 23.
While spectrum is likely in the mix, bigger picture issues like taxes threaten to prevent the super committee from meeting its goal by Nov. 23, said a Senate aide and multiple industry lobbyists. The $24.5 billion estimated to be raised by spectrum auctions still represents only about 2 percent of the $1.5 trillion that the super committee is required to find. “The prospects for a Committee-approved agreement remain high, but it’s hard to see how the members reach a bipartisan agreement that meets the statutory deficit reduction target outlined in the Budget Control Act and pays for job-creating initiatives that have bipartisan support,” said Wireless Broadband Coalition Executive Director David Taylor. “At this point, a sequester remains a strong possibility."
Spectrum auction authority may still move even if the super committee can’t agree to $1.5 trillion in savings, industry lobbyists said. To mitigate the impact of a sequester, the super committee could try to issue a plan that would identify a portion of the money required. “For instance, if the committee can agree to $800 [billion] elsewhere through cuts and revenues,” such as spectrum sales, “only $400 [billion] would have to be sequestered,” Jesaitis said. Mitigation is a “political necessity” to avoid huge cuts that would happen in sequestration, said a telecom industry lobbyist.
If the super committee doesn’t recommend spectrum auctions, Congress is expected to push spectrum sale authority through regular processes, Hill and industry officials said. House Communications Subcommittee Chairman Greg Walden, R-Ore., has said he will move ahead on spectrum if the super committee fails (CD Nov 3 p1). There are not many legislative days left this year, but Congress likely would pick up the issue again in January, a Senate aide said. A possible additional catalyst is the expiration of the FCC’s general auction authority in September, the aide said.
MF Global analyst Paul Gallant remains optimistic spectrum legislation will pass in some form during the 112th Congress. “The outlook is still good for a spectrum bill in 2012,” he said. “Campaign season adds a new dynamic, but auction revenues and public safety will still be powerful drivers.” But other observers say if super committee discussions implode the implications are not good for legislation authorizing the FCC to hold incentive auctions of broadcast spectrum.
"The super committee provides an extraordinarily powerful legislative vehicle for incentive auctions,” said Jeff Silva, analyst at Medley Global Advisors. “If super committee deliberations collapse and the panel fails to meet its statutory obligations, prospects for approving incentive auction legislation this year would likely dim significantly given the limited number of legislative days remaining in this session of Congress and fundamental differences that continue to exist among key lawmakers about how to craft the measure."
If the super committee fails to reach agreement, the best chance may be to attach spectrum legislation to an appropriations bill, said Public Knowledge Legal Director Harold Feld. “The chief danger is whether spectrum gets infected with the same partisan politics that mark everything else on the super committee,” Feld said. “So far, even where parties have started from positions fairly far apart, both the Senate and House have placed tremendous value on trying to keep spectrum legislation bipartisan. If that breaks down, and the parties come to see this as a partisan fight, then it’s hard to see how this passes in regular order.”
Feld said the outlook is “dicey” for a stand-alone spectrum bill. “There are just a large number of details that matter a great deal to very diverse constituencies,” he said. “There’s D block reallocation, which is entirely separate from how much to protect broadcasters in repacking, which is different from unlicensed, which is different from federal use. Getting agreement on these things in committee has proven very hard. Getting it through each house, particularly with competing approaches, is even harder."
"I would guess that the lure of revenue will keep the issue alive even if the super committee process falls apart,” said Andrew Schwartzman, senior vice president of the Media Access Project. “But getting anything through this divided Congress will be very tough.”