Budget
Bush Offers Largest Increases For Defense, Science
     The Defense Department and National Science Foundation would be among the federal entities with the largest year-over-year funding increases in the $2.8 trillion budget for fiscal 2007 that President Bush submitted to Congress this week. The administration sought to highlight a government emphasis on research, development, information technology and competitiveness. The competitiveness initiative would cost $5.9 billion in fiscal 2007, with $1.3 billion coming from federal spending and $4.6 billion from loss of governmental revenue by making the research and development tax credit permanent. Other Technology Daily budget stories covered the $137.2 billion budget request for research and development and the $30.9 billion request for the Homeland Security Department.

Budget
Bush Seeks Cuts In Manufacturing, School Technology
     President Bush proposed the elimination of or substantial reductions in funds for various manufacturing, education and research technology programs. He made the request in an effort to streamline processes or eliminate program redundancies. The plan comes after Bush last week announced a 10-year plan to boost research and development funding to improve U.S. competitiveness. Overall, funding for the National Institutes of Standards and Technology would increase slightly under the fiscal 2007 budget proposal. The transition to digital television, meanwhile, would affect the budget of the National Telecommunications and Information Administration.

Budget
Tech Funding Gets Healthy Boost In HHS Request
     Promoting health information technology, protecting against a pandemic flu outbreak and reducing Medicare spending are Bush administration priorities, according to the president's fiscal 2007 budget request for the Health and Human Services Department. The $697 billion proposal "represents a hopeful agenda" to protect against potential threats and improve U.S. healthcare quality, HHS Secretary Michael Leavitt said in a press conference. The funding would be a 9.1 percent increase over fiscal 2006. Other stories cover the proposed budgets of the Justice, and Defense departments, the National Science Foundation and the Patent and Trademark Office.

Budget
E-Government Scorecard Includes High, Low Marks
     Many federal departments and agencies have made strides toward implementing their e-government initiatives as part of the President's Management Agenda, according to the fiscal 2007 budget. Six government entities -- the Housing and Urban Development and Labor departments, Environmental Protection Agency, National Aeronautics and Space Administration, National Science Foundation, and Small Business Administration -- received positive scores. Labor received the first all-positive scorecard. However, the Education, Homeland Security, State and Veterans Affairs departments were noted for slippage in meeting implementation schedules. And four entities -- the Homeland Security, Interior and VA departments, and the Army Corps of Engineers -- earned failing overall e-government grades.

Budget
Education Chief Faces Questions About New Funding
     Education budget cuts that President Bush proposed for fiscal 2007 faced scrutiny in a Senate hearing, just as his administration is seeking support for a competitiveness agenda that highlights math and science education. Bush proposed the deepest-ever cuts to the Education Department budget. His $54.4 billion request in discretionary funding would be a $3.1 billion reduction. The administration said the budget would cut 42 programs "proven to be ineffective," including programs to boost educational technology. Both Maine Republican Olympia Snowe and New York Democrat Nydia Velazquez, meanwhile, criticized Bush's budget request for the Small Business Administration. They said the funding level would pose risks to innovation and economic growth.

Telecom
Key Panel Chairmen Differ In Approach To USF
     The chairmen of the House and Senate commerce committees are moving in opposite directions on reforming the $7.1 billion universal service fund that subsidizes phone service in rural and low-income areas. Alaska Republican Ted Stevens, who heads Senate Commerce, is leading efforts to strengthen and expand the federal subsidy program. But House Energy and Commerce Chairman Joe Barton, R-Texas, is seeking to reduce the program's size, putting the politicians on a collision course. USF-related negotiations between two other key lawmakers, meanwhile, have been abandoned. Sources said six months of collaboration between Sens. Conrad Burns, R-Mont., and John (Jay) Rockefeller, D-W.Va., failed to yield an agreement on several matters pertaining to carrier contributions and distributions to the fund.

Telecom
Telecom, Cable Firms Push For Flexibility In 'Net Neutrality' Model
     The top lobbyists for the Bell and cable companies promised they will not violate consumers' Internet freedoms but refused to rule out creating faster and slower lanes on the Internet. The chairman and members of the Senate Commerce Committee wrestled with the implications of "network neutrality" at a hearing on the topic. The debate centers on whether communications companies should be allowed to block or discriminate against the Internet data of another business on the dominant firms' networks. Two sets of witnesses at the hearing reached diametrically opposite conclusions based on their interpretation of the Internet's history. One group claimed the Internet has flourished because of freedom from regulation. The other camp said the Internet owed its success to the requirement that network operators offer the same price and service terms to all customers.

Digital Television
FCC Reverses Course On Per-Channel Cable Costs
     Requiring the cable industry to offer television programming on a per-channel basis could lower the costs to consumers, according to an FCC report. The report reversed another one released by the agency in November 2004. Under per-channel or a la carte programming, the report said, consumer bills would decrease from 3 percent to 13 percent in three of four scenarios. The reversal seems certain to reignite debate on Capitol Hill about cable rates and video competition from the regional Bell telecommunications companies. In other news, the FCC plans to announce proposed rules to safeguard cellular telephone records within days, as momentum in Washington to bolster privacy protections continues to build.

Privacy
House Commerce Plans To Approve Data-Security Bill
     The leadership of the House Commerce Committee has compromised with panel Democrats and plans on approving a data-security bill next week, the committee chairman said. "I believe we have reached a resolution," said Joe Barton, R-Texas. Several of the committee's Democrats had complained bitterly about the lack of consumer-protection provisions when the Commerce, Trade and Consumer Protection Subcommittee approved the bill in November. Under the current committee draft, customers would have to be notified about a security breach if it poses a "reasonable risk" of fraud rather than "significant harm," and consumers would have to be given access to their information and the right to correct it if it is wrong.

Taxes
House Committee Weighs Bills To Tax Online Sales
     House lawmakers scrutinized two proposals to alter how Internet vendors are taxed across state lines. The House Small Business Regulatory and Oversight Subcommittee held a hearing on nearly identical bills, S. 2152 and S. 2153, that would shift Internet sales-tax responsibilities. The hearing focused on how the measures would affect small businesses. Wyoming Republican Michael Enzi said federal legislation is needed to treat all businesses fairly. Enzi further argued that the bill would give states a major revenue source by closing loopholes for Internet businesses. But Ernest Perry, a jeweler from North Carolina who relies heavily on eBay online auctions, said changes to the status quo would make it more difficult for small firms to succeed.