CBO predicts less deficit savings for Senate spectrum bill than predicted

The Congressional Budget Office has estimate that a Senate spectrum bill will not produce as much money for deficit reduction as its supporters had predicted.

The CBO, which analyzes the budget implications of congressional legislation, released its "score" of legislation approved in June by the Senate Commerce Committee and found it would produce $6.5 billion for deficit reduction -- far below the $10 billion that the measure's supporters predicted it would provide.

Despite this, Senate Commerce Chairman Jay Rockefeller, D-W.Va., and ranking member Kay Bailey Hutchison, R-Texas, issued a statement late Wednesday touting the bill's benefits.

"The Congressional Budget Office's estimate reconfirms that our bill builds a robust public safety network, pays for itself, and still generates real deficit reduction," they said. "This is just another step along the path to final passage. S.911 has strong bipartisan support, and we look forward to getting it through the Senate."

The Senate legislation is aimed at helping public safety officials build a national broadband network to improve communications during emergencies and also free up more spectrum for wireless broadband. It would allocate a chunk of spectrum known as the D-block to public safety officials for their broadband network instead of auctioning it off to commercial bidders as required by current law. CBO said giving the D-block to public safety would cost $2.5 billion.

The Senate bill also would authorize the Federal Communications Commission to conduct incentive auctions aimed at enticing broadcasters to give up some of their spectrum in exchange for a share in the proceeds from the auction of those airwaves.

The CBO said the auction of this spectrum and other spectrum now used by federal agencies would generate about $24.5 billion over the next decade. The CBO noted that it is still difficult to predict how much spectrum would be available for auction by 2021 because no one knows how many broadcasters will decide to give up their spectrum. Still, the agency estimated that between 150 megahertz and 225 megahertz of spectrum could be available for auction by 2021.

The bill would direct that some of the auction money be used to build the public safety network and other provisions, while the rest would be available for deficit reduction. The CBO estimated that the network would cost $11.5 billion to build.

Republicans on the House Energy and Commerce Committee released a draft spectrum bill last week that would maintain current law and require that the D-block be auctioned to commercial bidders. They say that public safety officials have enough spectrum now to build their broadband network and that giving the D-block away would leave a hole in the budget at the same time Congress is trying to find ways to reduce the deficit.

The issue of how much money could be generated for deficit reduction from spectrum auctions has gained new attention amid reports that lawmakers may include the spectrum legislation in a deal to raise the debt ceiling in exchange for measures aimed at reducing the deficit.