On Behalf of the 1%, the Best Bargain Since Manhattan

[Commentary] The Middle Class Tax Relief and Job Creation Act of 2012 has been publically promoted as a bill to extend payroll-tax cuts, thereby providing about $100 billion in tax relief to the bottom 99% of Americans by income. Unmentioned is that the bill, by bipartisan agreement, sets in motion a much larger transfer of public assets to the top 1%. For bundled into the bill's fine print and camouflaged in the Orwellian doublespeak of "Incentive auctions" is a giveaway of public spectrum assets (popularly known as "public airwaves") worth over $200 billion, which would make it the largest corporate welfare program in history.

Usually, when it comes to "minor" modifications of spectrum licenses that enhance the value of incumbents' licenses by a mere millions of dollars, Congress lets the FCC discreetly do the dirty work. But in this case the giveaway was orders of magnitude larger and thus blatantly conflicted with the Communications Act, which specifies that the FCC cannot allocate spectrum in such a way as to cause "unjust enrichment." Congress and the Administration thus came up with the idea of calling the giveaway an "incentive auction," promising it would bring the U.S. Treasury billions of dollars to offset the cost of extending the payroll-tax cuts. This promise provided a rationale for adding the special interest spectrum provisions to a bill supposedly about middle class tax relief. But this is an auction of public assets unlike any other you've heard about. The terms of the auction are cleverly designed so that the bulk of the proceeds will go to broadcast licensees. Moreover, the licensees still get their windfall even if they don't participate in the auction.