================================================================= ALAWON Volume 6, Number 68 ISSN 1069-7799 August 1, 1997 American Library Association Washington Office Newsline In this issue: (100 lines) CONGRESS INCLUDES UNIVERSAL SERVICE 'GIMMICK' IN FINAL BUDGET AGREEMENT _________________________________________________________________ CONGRESS INCLUDES UNIVERSAL SERVICE 'GIMMICK' IN FINAL BUDGET AGREEMENT In its budget-balancing agreement this week, Congress included the provision, labeled a 'gimmick' by many, that allows tinkering with universal service telecommunications funds in order to balance the federal budget between the years 2001 and 2002. Review of the complicated and lengthy document indicates that the Congressional conferees from the House and Senate and negotiators from the White House agreed to allow the carriers not to pay into the fund in the year 2001; they would then have to repay the amount to the universal service fund in 2002, giving the federal government additional funds for use in balancing the budget. In Washington, some opponents of this technique have characterized it as a one-year, interest-free loan' from the U.S. Treasury to telecommunications companies. As reported in the ALAWON of July 25 (Vol. 6, No. 63) ALA perceives this as a serious threat and a bad precedent for use of universal service monies. Under the budget agreement, the federal government will put $3 billion into the universal service fund in the year 2001 -- relieving telecommunications carriers of their obligation to contribute $3 billion in that year. In 2002, the federal government would withdraw $3 billion from the universal service fund, and carriers would repay the $3 billion they had been loaned' in 2001. The net effects of this piggy bank' approach are: 1) setting a bad precedent for the government manipulating the universal service fund (which is made up of private money and is NOT part of the U.S. Treasury) and 2) giving the telecommunications industry a one-year, interest-free loan of $3 billion, and 3) potentially de-railing the universal service program if carriers are unable or unwilling to pay back the loan' of $3 billion in 2002. This final version of the budget plan is a reversal of an earlier proposal, under which the federal government would have borrowed $3 billion from the universal service fund and paid it back the following year. Starting on January 1, 1998, the universal service program for libraries, schools and rural health care providers is supposed to be operational and able to provide discounts on telecommunications services, internal connections, and Internet access. The universal service program also distributes funds to ensure that local telephone service is affordable in rural, insular, and high-cost areas. This arrangement would potentially affect the program in 2002; it should not adversely impact the program prior to that date. Several members of Congress, from both parties, have indicated that they will address this issue in the next Congress by sponsoring legislation to ensure that this does not happen again. Library supporters and others concerned about this precedent are encouraged to keep critical calls, letters and e-mails going into Congress and the White House to encourage them to "set it straight" at the first opportunity. ALA is also seeking further clarification and monitoring other actions related to this complex appropriations compromise. We will keep you informed as we hear more. _________________________________________________________________ ALAWON is a free, irregular publication of the American Library Association Washington Office. To subscribe, send the message: subscribe ala-wo [your_firstname] [your_lastname] to listproc @ala.org. To unsubscribe, send the message: unsubscribe ala-wo to listproc@ala.org. ALAWON archives at http://www.ala.org/ washoff/alawon. Visit our Web site at http://www.alawash.org. ALA Washington Office 202.628.8410 (V) 1301 Pennsylvania Ave., NW, #403 202.628.8419 (F) Washington, DC 20004-1701 800.941.8478 (V) Lynne E. Bradley, Editor Deirdre Herman, Managing Editor Contributors: Carol C. Henderson Alec S. Johnson Claudette W. Tennant All materials subject to copyright by the American Library Association may be reprinted or redistributed for noncommercial purposes with appropriate credits. =================================================================