NEXTWAVE CASE RAISES QUESTIONS ABOUT FEDERAL BUDGET PROCESS
U.S. Appeals Court, D.C., decision overturning FCC’s $17 billion PCS auction bolsters position of critics of $1.3 trillion tax cut that excessive tax relief can “throw government into chaos” if “larger-than-expected” federal budget adjustments eventually are required, Senate Budget Committee majority staffer said. Court ruled late last week (CD June 25 p1) that FCC erred in cancelling NextWave’s 90 PCS licenses for missed payment, raising doubt as to when -- or whether -- govt. could factor projected outlays from re-auctioned spectrum into federal surplus. Democratic aide acknowledged that “it’s a little early to tell what the fiscal impact will be” on federal budget estimates, but aide and other sources said lawmakers now would have to decide where to cut funding of govt. agencies or programs.
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Verizon, AT&T Wireless and Cingular had agreed to pay nearly $15.4 billion for re-auctioned C-block spectrum. Since doubt remains as to whether those payments can be incorporated into govt. budget and surplus calculations, specter of raiding Social Security or Medicare trust funds is raised, staffer said. Latest development in nearly 3-year NextWave saga is type of potential budget adjustments that Democrats had warned could occur, consequence of Republicans’ tax plan that leaves “very little room for error,” he said.
Senate Budget Committee Republican staffer said Social Security and Medicare funds were safe because there currently was “non-Social Security surplus of $44 billion.” He said several options exist that could resolve D.C. Circuit decision, such as “substantial chance that the FCC could [successfully] appeal to the Supreme Court.” Staffer also rejected potential multibillion- dollar budget shortfall and notion that funding for govt. programs or agencies would be slashed: “We don’t see that happening… In all due respect to our Democratic colleagues, we still have a significant surplus.”
Current estimates of Congressional Budget Office project fiscal year 2001 surplus of $281 billion, $313 billion in FY 2002, $5.6 trillion total surplus between FY 2001 and FY 2010.