Senate passes stimulus plan with reduced broadband grants: Plan now set for compromise with House version

The Senate today passed a scaled-backed economic stimulus bill by a 61-37 margin, clearing the way for what is expected to be a contentious conference to reconcile differences between House and Senate measures that vary in terms of grant funding and tax breaks for broadband deployment in underserved areas.
After Senate Democrats reached a deal with centrist Republicans Arlen Specter (Pa.), Susan Collins (Maine) and Olympia Snowe (Maine), the money available for broadband grants was reduced from $9 billion to $7 billion. Fifty percent of the funds in the revised Senate bill are to be used for projects in rural areas.
“Jobs constructing broadband Internet lines that reach Florida’s rural schools and small businesses, so they can connect and compete with their counterparts anywhere in the world,” said President Obama in Fort Meyers, Fla., today at the second town hall meeting in as many days intended to underscore the urgency in getting a final economic recovery bill passed and signed into law.
In its analysis of the just-passed Senate economic stimulus bill, the Congressional Budget Office estimated most of the broadband grant monies won’t be spent until 2011 through 2015. CBO’s latest projection for the time lag in broadband stimulus spending is consistent with previous analyses. President Obama and Democrats previously said they expected 75% of economic stimulus dollars to be spent within the next 18 months.
Obama and Democrats who control Congress have wanted to get economic recovery legislation to the White House by Presidents’ Day. Doing so will be a tall order, however. Even though the trimmed-down Senate bill – estimated by the Congressional Budget Office to now cost $838 billion – is closer to the House’s $819 billion bill, there are major differences between the two measures in terms of spending priorities and tax breaks.
For example, tax credits for wireless carriers and other broadband operators are included in the Senate bill only. While the Senate measure earmarks $7 billion for broadband grants, the House bill includes $6 billion (including $1 billion exclusively for wireless) for the same purpose.