Thursday, August 5, 2010

Alert: Senate Votes $302 Million Cut in Broadband Stimulus Funds 08/05/2010 San Francisco – In a 61 – 39 vote yesterday, the U.S. Senate voted in favor of a key amendment which seeks to cut $302 million from the remaining monies of the federal broadband stimulus program.  

We believe the cut, equal to approximately 10% of the estimated $3.05 billion in total funding for the program not awarded to date, most likely will be sustained by final votes in the Senate and House.
Sen. Patty Murray (D-WA)
The Murray-Harkin-Reid-Schumer Amendment 4575 to H.R. 1586 proposes to cut (engage in “rescission” in the parlance of Congress) “$302 million in recovery Act funding provided to the Department of Commerce for broadband grants”.  The legislative initiative leaves untouched monies in that part of the program administered by the U.S. Department of Agriculture (USDA).

With Senator Patty Murray (D-WA) as its lead sponsor, the amendment was successfully attached to a priority supplemental funding bill which seeks to help recession impacted states retain teachers on public payrolls, and extend stimulus funded payments for Medicare recipients.

As we reported on July 2, the powerful House Appropriations Committee had sent a similar proposal to the full House on July 1 which sought a $300 million cut from USDA broadband stimulus funds as well as the $302 million cut from Commerce Recovery Act funding.  At the time, we estimated the total of $602 million in proposed cuts equaled approximately 14% of the then unexpended monies from the full $7.2 billion for broadband appropriated under the American Recovery and Reinvestment Act of 2009 (ARRA). 

The proposal of the House was not sustained in eventual House – Senate action, although the $602 million figure had been initially suggested by Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee. 

Our Take: Proposed Cut to NTIA BTOP Program Likely to be Sustained
We believe the $302 million proposed cut is likely to become law quickly in view of several factors:

The cut is part of an emerging bipartisan effort to fund public teachers in recession impacted states in exchange for rescissions and other cost saving measures.

• Joining Sen. Murray as co-sponsors are senior senators Tom Harkin (D-IA), Chuck Schumer (D-NY), and Senate Majority Leader Harry Reid (D-NV) himself.

The larger $602 million cut has already been supported by House Appropriations Chairman Rep. David Obey (D-WI) and his colleagues.

Commerce’s broadband stimulus programs, administered by the National Telecommunications and Information Administration (NTIA), are seen by many on Capitol Hill and in the telecom sector as being poorly managed and unfocused relative to those of USDA’s Rural Utilities Service (RUS).  

Murray-Harkin-Reid-Schumer Amendment 4575 Summary to H R 1586
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