Reid Budget Proposal Includes Spectrum Auctions

Part of the proceeds from incentive auction will go toward deficit reduction

By John Eggerton -- Broadcasting & Cable, 7/25/2011 6:06:53 PM

As the president prepared to address the nation on the debt ceiling impasse, Senate Majority Leader Harry Reid was proposing a $2.7 million Democratic package of cuts and revenue-raisers that included spectrum auctions, according to a summary of the proposal.

According to Reid's office, the plan anticipates $15 billion in "spectrum sales." Part of the proceeds from an incentive auction to reclaim broadcast spectrum for wireless broadband will go toward deficit reduction according to various bills now in Congress. The Senate bill, S 911, was scored by the Congressional Budget Office (CBO) as providing $6.5 billion for deficit reduction.

The possibility or either appending one of the current spectrum auction bills to the financial package or writing in new language has been on the table for several weeks and was raised in a slide presentation last month by Republican House Majority Leader Eric Cantor (R-Va.), one of the lead Republicans on the debt negotiations, although he had a figure of $20 billion-$25 billion.

Earlier in the day, National Association of Broadcasters President Gordon Smith said that broadcasters would not oppose spectrum as part of the debt ceiling package so long as it got the policy right, but pointed out that while spectrum would be a "footnote," in that legislation, it was a life-or-death issue for his industry. He also said, in response to a question about CBO scoring of the bill, that in his experience as a Senator, the one thing he knew about CBO scores is they were always wrong.

Reid's proposal Monday was billed as an amendment and it is unclear what will or will not be in the ultimate package if the Democrats and Republicans agree on some way forward that does not include defaulting on U.S. financial obligations.

Reid gets $1 trillion of his total savings by winding down the wars in Iraq and Afghanistan.