Why spectrum debate is tied to debt ceiling plan

Congressional leaders seem to be throwing everything but the kitchen sink into the debate over the budget and raising the debt ceiling. Now it looks like the incentive wireless spectrum auctions proposed by the Federal Communications Commission may end up as part of a package that is being hashed out by Republicans and Democrats in Washington (DC).

Senate Majority leader Harry Reid (D-NV) included the sale of wireless spectrum to mobile broadband providers in his proposed package of cuts and revenue-raisers. He said he expects the sale of wireless spectrum to generate $15 billion in revenue for the government, which could be applied to reducing the nation's budget deficit. At first blush it seems rather silly that the issue of auctioning additional wireless spectrum would be caught up in the current budget debate and stalemate over the debt ceiling. But when you take a closer look, it may not be so ridiculous after all. Think of it this way. When a household is looking for some extra cash, the family may start to look at added expenses they can cut. For example, maybe they get rid of cable TV or they stop eating out. Mom may also go back to work. And the family may also consider selling some of its assets, such as dad's coveted sailboat. The proceeds from all of these measures could be used to help pay down credit card debt or fill gaps in the family's budget. For the government, cutting monthly expenses is like slashing spending on entitlement programs, such as Social Security and Medicaid. Creating new revenue streams could mean raising taxes. And getting cash by selling off some assets is similar to the notion of auctioning unused wireless spectrum from TV broadcasters and government entities.

The first two options -- cutting expenses and raising revenue--are already being debated among Democrats and Republicans as they try to figure out a plan to deal with the nation's budgetary and debt issues. So it makes perfect sense that Congressional leaders would also be looking at ways to raise money through the sale of valuable assets.