Add Mitch Daniels to the highest office in the land, President of the United States by Committee. Daniels, director of the Office of Management and Budget, joins Vice President Cheney, senior adviser Karl Rove and a handful of others in the President’s Club. Cheney is the most influential vice president ever. The reason for the latter is Cheney-highly qualified and experienced in Washington ways and means-is only a heartbeat or so away from the office occupied by the president.
That explains Cheney’s clout. What about Daniels’? Start with the premise that Bush administration policies must conform to the $1.35 trillion tax cut. When such a tax cut is elevated to stratospheric heights to the exclusion of everything else it becomes the driver of the White House agenda. A prospective law or regulation that does not fit into the Bush tax cut or conflicts with its underlying assumptions is given short shrift.
The Daniels dynamic affects the mobile-phone industry on various levels.
Because the Bush tax cut has limited the budget hike sought by the Pentagon, Defense Secretary Don Rumsfeld may be forced to deal with industry on spectrum. Wireless firms have proposed to spend billions to move military radio systems from the 1700 MHz band to other frequencies in exchange for access to that band for third-generation wireless systems.
Top brass insist 1700 MHz spectrum sharing isn’t feasible and that any relocation of military systems-under the law-can’t go forward without full compensation and comparable spectrum. Industry says it can modernize military communications via a `win-win’ plan that would override a 1999 law requiring comparable spectrum for DoD and direct the commerce secretary to take the Pentagon’s spectrum.
By restricting the defense spending increase to $18 billion instead of the $35 billion reportedly requested by Rumsfeld, Daniels not only has forced the Pentagon into a corner on spectrum, but also has managed to turn Democrats into hawks and Republicans into doves. Republicans suspect Democratic demands for higher Pentagon spending is a ploy to lure the GOP into dipping into the Medicare trust fund, which Democrats later could use against them to regain control of the House in 2002.
Elsewhere, with the economic slowdown lowering the budget surplus, Daniels may not have the stomach for a repeal of the 3-percent telecom tax that industry is expecting from Congress this year. Such a move would cost Daniels $45 billion over the next six years.
Given all this, don’t expect Daniels to allow a prolonged delay of next year’s scheduled sale of 3G licenses.
