A Senate bill that would use proceeds from spectrum auctions to subsidize health insurance for children of the working poor may be a noble idea, but experts say that banking on such a precarious revenue source could lead to disappointment.
The bill, sponsored by Senator Arlen Specter (R-Pennsylvania), would provide US$10 billion in block grants over five years so states can purchase private health insurance for children whose parents do not qualify for Medicare but who cannot afford the coverage. Both nonbroadcast and broadcast spectrum would be sold until 2002, and then Congress would have to figure out another way to pay for the program. About 4.2 million of the 10 million children in the United States who lack health insurance would be eligible for the program.
"This legislation will provide coverage to those who need it most, but will do so in a manner that respects our fundamentally Republican ideas of individual freedom, personal responsibility, and pay-as-you-go government," Specter said in a statement.
But analysts say that Congress can't bank on that money.
"My concern is that we're diluting the value of spectrum," said John Lehdahl, director of the wireless program at DataQuest, which provides information and analysis of the high-tech industry. "The government has put out so much spectrum over the past few years that companies are asking why they would need more."
The Federal Communications Commission has conducted 14 spectrum auctions since the process began in 1994, and the revenue is used to fund sundry federal programs. Last week, a wireless communications services auction that Congress hoped would raise $1.8 billion to balance the budget failed to garner even close to that amount. The auction had raised a mere $12.8 million as of Monday with bidding winding down, the FCC said.
But alternative proposals to pay for kids' health insurance have their own political pitfalls. Senators Orrin Hatch of Utah and Edward Kennedy of Massachusetts have introduced a bill to hike the federal tax on cigarettes from 24 cents to 67 cents a pack, which the lawmakers say would raise $20 billion over five years to insure children, and $10 billion to balance the budget.
But Specter, who chairs the Senate Appropriations subcommittee on labor, told the Senate Labor and Human Resources Committee on Friday that passing a bill to raise taxes of any kind in Congress this year would be next to impossible.
"I frankly doubt we could pass a bill to tax organized crime," he told the panel.
