WASHINGTON-President Clinton’s goal in his second term to reach a balanced budget deal with the Republican-led Congress could lead to expanded auction authority and a full-blown debate on spectrum reform policy.

Clinton, who identified the budget as his top priority following his reelection victory over GOP nominee Bob Dole, huddled last week with Republican congressional leaders on balancing the budget by 2002 and passing campaign finance reform legislation.

In the budget battle of 1995, which resulted in two partial government shutdowns, Clinton vetoed a deficit erasing plan to raise $15.3 billion during the next five or six years by relaxing restrictions on what spectrum the Federal Communications Commission could sell.

Clinton’s competing balanced budget package also called for broadened auction licensing, anticipating revenues of more than $30 billion when the sale of returned analog TV licenses are factored in.

Today, the FCC is limited by 1993 legislation to auctioning commercial mobile radio service licenses. Both Republicans and Democrats want private wireless spectrum covered by auction statutes, despite pleas from users-large and small-to consider spectrum fees as an alternative.

Public safety spectrum is off the table.

An aide to Sen. John McCain (R-Ariz.), (McCain is in line to chair the Commerce Committee) said the lawmaker will pick up spectrum reform where his predecessor-defeated Sen. Larry Pressler (R-S.D.) left off. McCain voted against the telecom reform bill penned by Pressler, saying it was not deregulatory enough, and fought unsuccessfully with Dole to auction digital TV licenses.

Sen. Conrad Burns (R-Mont.) is headed for the Senate communications subcommittee chair. Thomas Bliley (R-Va.) returns as House Commerce Committee head and Billy Tauzin (R-La.) will oversee the telecommunications subcommittee.

Look for all four to put the Federal Communications Commission’s implementation of the 1996 telecommunications act under the microscope.

“We’re in this boat together and we have to paddle it together,” said Clinton, sounding a post-election victory conciliatory note that was not heard often by Republicans in the president’s first term. “That’s what Americans want. We’ve got to remember it’s the American people in the boat with us and we’re not nearly as important as they are and their future.”

Clinton’s attempt to capture “the vital center” may be aided by Republicans who, while retaining control of the House and Senate, do not have a large enough voting margin to move legislation through Congress without some help from Democrats.

Republicans are going to let the president have first crack at balancing the budget, a gesture designed to prevent from co-opting the GOP.

But already the tone has hardened over talk of a balanced budget amendment and over questionable foreign campaign contributions made to Democrats in the 1996 election.

A big obstacle to reaching a balanced budget accord are the labor unions. Organized labor poured $35 million into targeted Democratic campaigns mostly involving vulnerable freshman Republicans up for re-election. The Democrats picked up nine seats in the House, but failed to win the chamber back.

Still labor, which badly wants into the wireless industry, is expected to call in its and could keep the congressional Democrats and the White House from conceding too much to Republicans in budget talks.

In the meantime, Clinton is reshuffling his cabinet, this time looking for a Republican or so instead of trying to make it reflect the makeup of America. Mickey Kantor, who took over at Commerce after Ron Brown died last April, is leaving the administration.

White House advisor Mack McLarty and William Daley, brother of the Chicago mayor, are mentioned as possible replacements.

Larry Irving returns as head of the National Telecommunications and Information Administration, although there have been rumblings about him wanting to leave after last year’s budget battles with Congress.

Well-regarded Charlene Barshefsky could be tapped as U.S. trade representative, a key post in terms of telecom trade liberalization, despite having lobbied for a Canadian logging concern.


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