[Congressional Record Volume 143, Number 112 (Friday, August 1, 1997)]
[Extensions of Remarks]
[Pages E1615-E1616]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               CONCERNING THE DEAL TO BALANCE THE BUDGET

                                 ______
                                 

                               speech of

                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                        Wednesday, July 30, 1997

  Mr. MARKEY. Mr. Speaker, I am voting ``no''. Here's why:
  1. This deal increases the deficit. We should not un-balance the 
budget now for the sake of balancing it 5 years from now.
  The purpose of passing this legislation was supposed to be to balance 
the budget. I support that goal. In fact, since 1993, when I supported 
the Clinton budget package against the vote of every Republican in the 
House, the deficit has been going down. But if we approve this latest 
budget deal, we will, according to its authors, make the deficit worse, 
not better, next year.
  But that's not all. It has been apparent to me since March that 
revenue projections used by both the administration and the Congress 
have grossly underestimated the amount of revenue flowing into the 
Treasury recently. The deficit for this fiscal year has been re-
estimated twice already, reducing it dramatically from over $100 
billion to less than $45 billion. We have not seen deficits this low 
for 20 years. At this rate, the budget will be balanced in 1998, not 
2002. In order to ensure that the final budget agreement reflected a 
true snapshot of current reality, I asked OMB to provide its overdue 
mid-year estimates before we had to vote on the agreement. OMB refused. 
OMB finds the truth inconvenient, but the truth is that we have a 
better chance of balancing the budget without a deal than with one.
  Let's not turn our backs on the goal of a balanced budget just as we 
are about to reach that promised land.
  2. The tax cuts go to the wrong people for the wrong purpose.
  Targeted tax credits for worthy purposes can be justified, even in 
the absence of a balanced budget, as long as they are going to people 
in need. But the vast majority of these tax cuts will go to people who 
are not needy. Like Pacman, the wealthiest 5 percent of all Americans 
gobble up half of the benefits. The wealthiest 20 percent gobble up 
over 70 percent of the benefits. In fact, the lowest-income Americans 
are expected to pay more, not less, under this bill. Is this fair? Is 
this moral? Is this wise?
  The only justification for fattening the pocketbooks of the very 
wealthy has been some notion of stimulating the economy by favoring the 
tax treatment of long-term investments. But we don't need a stimulus. 
In fact, any artificial stimulus to this very healthy economy is likely 
to trigger a move by the Federal Reserve Board to raise interest rates. 
Higher interest rates are a tax on all of us. We should not ask to be 
thrown into that briar patch.
  3. We are cutting deep so the rich can keep.
  The more we give back to the wealthiest individuals in this society 
the deeper we have to cut in spending programs that benefit everyone 
else. This is a time to ask those with high incomes to shoulder more of 
the burden of deficit reduction, not less. As many commentators have 
noted, we have some major decisions ahead regarding the solvency of 
Medicare and Social Security as our population ages and our employment 
pool shrinks. Prudence dictates that we devote resources to solving 
those intractable problems. Today, we compound them.
  In short, there are many good things in this package that I support, 
and it is always difficult to vote against a package that has much good 
mixed in with the bad. But I cannot in good conscience engage in the 
pretense of balancing a budget that is already balanced as a vehicle 
for a tax cut that is so unfair to average Americans.
  4. Telecommunications provisions of the budget.
  The telecommunications proposals contained in the budget do not 
represent good telecommunications policy. In fact, they contain 
appalling precedents, highly-flawed assumptions, and radical departures 
from established, sound telecommunications policy--all in the name of 
raising cash for the U.S. Treasury. The blame for this lies with an 
overzealous desire to appear to balance the budget at any cost--
including the use of highly speculative and likely fraudulent spectrum 
numbers and the disruption of the universal service system. The blame 
for this lies with the ranks of ``budgeteers'' who have little 
knowledge of telecommunications issues and apparently no respect for 
telecommunications policy.
  The telecommunications budget proposals accelerate the dumping of 
more spectrum on the market in the immediate aftermath of having 
already sold airwave frequencies for PCS, paging and other wireless 
services. It should be clear that much of the money that is expected 
from the auctions that we have already had may not ever show up in the 
Treasury because multitudes of winning bidders are already struggling 
to find the capital to build out their networks.
  In a recent FCC auction forced by budget priorities, many wireless 
franchises covering entire States sold for a mere dollar. That auction 
raised only $13 million out of the $1.8 billion it was expected to 
raise. And today we have another budget-driven proposal that attempts 
to raise billions and billions more from the sale of the airwaves. It 
is pure fantasy.
  Moreover, this policy will adversely affect our ability to 
democratize the holding of radio licenses. In the 1993 Omnibus Budget 
Reconciliation Act [OBRA 93] we built in provisions to help minorities, 
women, and entrepreneurs to gain access to the airwaves. By placing the 
highest societal value on the highest amount of cold hard cash that can 
be raised at auction we are subverting other important 
telecommunications policy objectives.
  On July 23, eight Democratic members of the House Telecommunications 
Subcommittee joined me in writing the FCC about this issue. We wrote 
that we are concerned about the increasing emphasis placed upon 
spectrum auction revenue to assist in balancing the Federal budget and 
that that placing budgetary priorities foremost in Commission licensing 
decisions ultimately shortchanges the American public because spectrum 
allocation and licensing decisions must encompass a broad 
interpretation of the public interest, of which taxpayer interests are 
but one part. In our view, a short-term, temporary injection of cash 
into the Federal treasury for the purpose of achieving revenue goals 
for an arbitrary 5-year budget target serves budgetary interests, but 
it does not necessarily serve the broader public interest.

  In particular, we wrote that budget policy pressures may unwittingly 
work to thwart the ability of women and minority-owned firms to become 
spectrum licensees. Diversity in mass media licensing has been shown to 
play an important role in providing programming that reflects the 
community and its interests. In our letter we noted that this 
fundamental goal is not only supported by Congress, but also by 
President Clinton. As he recently said in his commencement remarks at 
the University of California-San Diego June 14: ``We must continue to 
expand opportunity. Full participation in our strong and growing 
economy is the best antidote to envy, despair, and racism. We must 
press forward to move millions more from poverty and welfare to work; 
to being the spark of enterprise to inner cities . . . We should not 
stop trying to equalize economic opportunity.''
  Third, I want to mention the spectrum sale and its dubious budgetary 
numbers. The sale of frequencies from the returned analog broadcast TV 
channels is scheduled for the year 2001. The actual return of that 
spectrum to the

[[Page E1616]]

FCC will not occur until 6 years later--in 2007. The proposal then 
allows broadcasters to continue to operate on their analog channels if 
the FCC grants waivers. Think about that--that's the equivalent of 
asking business and entrepreneurs to pony up money today for airwave 
rights they won't see until 2003 and then in 2003 a determination may 
be made to extend that indefinitely. Who is going to bid anything for 
these frequencies?
  At the subcommittee and committee markup on the legislation, I 
offered an amendment to try to achieve greater certainty to the 
broadcasters, the spectrum bidders, and to consumers. The amendment 
would have required that after 2001, when the so-called returned analog 
spectrum has been auctioned, that all TV's sold in the United States 
must be dual use capable. In other words, they have to be able to pick 
up and display both analog and digital signals. This will make the 
transition in the consumer market to digital technology more rapid. 
This in turn, would increase the likelihood that bidders in 2001 would 
get the airwaves they won at auction sometime during their lifetimes.
  The legislation also contains policy changes that promote media 
concentration at the local level. As many of my colleagues know, during 
consideration of the Telecommunications Act, I battled the mass media 
concentration provisions of the bill and successfully amended the bill 
on the House floor to help protect localism and diversity. The budget 
provisions will allow local broadcasters to bid on the spectrum that is 
returned even if this returned spectrum were to be reallocated for 
broadcast use.
  During consideration of the Telecommunications Act, Congress rejected 
repeal of the TV duopoly rule, which had been part of the House-passed 
legislation. The conference committee on the Telecommunications Act 
refused to accede to repeal of the duopoly rule because of concern from 
many members and the administration about the very real threat to 
localism and diversity posed by deregulating in this manner. This 
concern, incidentally, has been borne out by the experience in the 
radio market in the aftermath of the sweeping deregulation of radio 
ownership rules contained in the Telecommunications Act. The NTIA has 
noted that adverse effects on minority ownership, and diversity in 
general, that has resulted from the radio ownership provisions.
  I strongly oppose the provisions in the budget agreement that would 
allow stations in the top markets to bid on returned spectrum 
reallocated for broadcasting. The budget agreement waives the duopoly 
rule to allow broadcasters to bid on spectrum and thereby own two TV 
stations in a local market. It is important to note however, as the FCC 
considers regulatory rules governing local TV ownership, the intent of 
Congress in this area. First, the conference committee on the 
Telecommunications Act duly considered and rejected repeal of the TV 
duopoly rule just over a year ago. Second, the budget's 
telecommunications provisions only permit a waiver of the TV duopoly 
prohibition at a point 4 or 5 years from now, and then, only in the 
largest TV markets. Moreover, this future waiver of the rule is quite 
limited in that it reflect's Congress' intent to only allow such 
limited waivers in the largest markets when we are adding outlets to 
the market. Even so it represents, in my opinion, unfortunate 
telecommunications policymaking.
  Finally, the budgetary legerdermain entailed by tampering with the 
universal service system to cynically pretend to balance the budget is 
terrible policy and precedent. This will directly affect telephone 
ratepayers around the country adversely. The universal service system 
was created to ensure that affordable telephone service would be 
available to all Americans. It has successfully resulted in achieving a 
93-percent phone penetration rate in the Nation--the highest in the 
world. I strongly oppose this unprecedented gimmick of utilizing the 
universal service system as a budgetary gap-filler.

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