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Returning Reclaimed Broadband Stimulus Funds to US Treasury

Floor Speech

Location: Washington, DC

First of all, I want to thank my colleague from New Hampshire, Charlie Bass, who has really worked hard on this issue to bring about greater accountability and oversight of how American taxpayer dollars are being allocated under the American Recovery and Reinvestment Act, especially to make sure that when the money comes back that it's really clear with these agencies that it goes back to pay down the deficit and doesn't end up in some sort of slush fund, and my colleague Mr. Bass has played a real leadership role in both crafting this legislation and making sure it comes to the House at this time.

Mr. Speaker, the American Recovery and Reinvestment Act allocated approximately $7 billion in taxpayer money to two broadband-related grant and loan programs. One was administered by the National Telecommunications and Information Administration and the other by the Rural Utility Service. The wisdom of creating these programs and whether the money should have been better targeted to unserved households has been the subject of ongoing debate. There is, however, general consensus on the importance of oversight, as evidenced by the bill, H.R. 1343, unanimously passed out of subcommittee and the full Energy and Commerce Committee by voice vote. I, for one, want to make sure these programs do not produce some sort of Solyndra problem. I want to thank our ranking members, Waxman and Eshoo, and their staffs for working with us on this bill. We incorporated a number of their suggestions, and the bill is better because of it.

Because the NTIA and RUS have already awarded all $7 billion, the bill does not automatically revoke any money. To do so would not only be unfair to the grant and loan recipients that are abiding by their award terms, it would also likely cost the government more in legal fees than it would save.

The vast majority of the money is yet to be spent by the awardees, however. So, what H.R. 1343 does is clarify the responsibility of the NTIA and the RUS going forward to terminate failed or failing grants and loans and to return to the U.S. Treasury any rescinded or relinquished funds. The bill also improves oversight of the broadband programs. Among other things, the bill requires the NTIA and the RUS either to terminate an award within 30 days of receiving information from their respective Inspectors General or the Comptroller General regarding material in noncompliance with award terms, or to explain to Congress why they don't. It would require the NTIA and RUS to deobligate and return to the Treasury funds from terminated awards as well as return unused funds from any relinquished awards. Finally, it would require award recipients to provide an accounting of funds received but not yet expended, if the NTIA or RUS terminate those awards.

The number of NTIA and RUS awards that have already been returned, and the fact that more than 90 percent of the money the ARRA allocated for broadband still remains obligated but unspent, makes this legislation all the more important. Of 233 NTIA awards worth approximately $3.94 billion, recipients had only spent $480 million through June of this year, despite claims that the stimulus act generally would focus on ``shovel ready'' projects. Clearly, that hasn't happened here. Four of the 233 awards worth approximately $40 million have already been rescinded or returned. The RUS has issued 320 awards, consisting of $2.3 billion in grants and $87 million leveraged for $1.2 billion in loans. Yet recipients had only spent $250 million by the middle of July, and 28 of the 320 awards, worth $123 million in grants and $35 million in loans, had already been returned or rescinded.

Some of my colleagues, as they did in committee, may say that the legislation is really unnecessary. I would disagree. The Department of Commerce Inspector General, the Department of Agriculture Inspector General, and the Government Accountability Office have all flagged concerns with the programs and identified them as high risk, including in testimony at the Communications and Technology Subcommittee's February 10, 2011, hearing.

A number of statutory shortcomings further demonstrate the need for this legislation. For example, existing law leaves the NTIA and the RUS too much discretion in deciding whether to deobligate and return funds from failed or failing awards. Section 6001(i)(4) of the stimulus law establishing the NTIA program stipulates only that the Assistant Secretary ``may'' deobligate awards in cases of waste, fraud, or insufficient performance. The statutory language provides even less guidance to the RUS, remaining silent on the issue of deobligation and return of funds. Commerce Assistant Secretary Strickling agreed in an April 2011 hearing that the bill would create more certainty. That was our effort.

While Dodd-Frank added rescission provisions to the ARRA, it is unclear whether the terms ``withdraw'' and ``recapture'' in Dodd-Frank have the same meaning as ``deobligate'' in section 6001 of the ARRA, leaving unclear how the Dodd-Frank provisions would be interpreted and applied to the broadband grants.

When Congress uses billions of dollars to subsidize broadband in competition with the private sector, especially when 95 percent of the country already has access, it bears all the more responsibility to police those dollars. For this and all the reasons that I have mentioned, I thank the gentleman from New Hampshire for his leadership on this issue, and I urge my colleagues to vote for the bill.

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