Special-Interest Deals Get Stalled by Budget Battle


The battle of the budget between Congress and President Clinton may be a source of anxiety for millions of Americans, but few individuals have more riding on the outcome than R. Earl Holding.

Holding, a wealthy Utah developer and president of Sinclair Oil Corp., is not worried about the fate of the family tax credit or the future of Medicare benefits. He has something much bigger personally in mind: congressional approval of a little-known land swap with the U.S. Forest Service that would allow him to stage events for the 2002 Winter Olympics at his Utah ski resort, known as Snowbasin.

Holding is typical of many politically influential Americans who have special-interest legislation before Congress that cannot be enacted until there is an overall budget settlement.


One of the ironies of the long-running budget battle is that it has jeopardized dozens of secret deals buried deep inside this year’s omnibus spending legislation.

Airline executives, pharmaceutical manufacturers, physicians, health maintenance organizations, nursing home operators, convenience store chains, bankers, boaters, restaurant owners, football coaches, grocers--these are just some of the people who, like Holding, are waiting to reap unheralded benefits from a long-delayed compromise on the fiscal 1996 budget.

After months--in some cases, years--of intense lobbying for their pet perks, they find themselves helplessly awaiting the final outcome of negotiations between the Democratic White House and the Republican-led Congress.

Holding, according to his spokesman, fears that the stalemate will interfere with his preparations for the Olympics, which must begin shortly if he is to be fully ready by 2002.

Under the proposed swap, Holding would provide the Forest Service with about 800 acres of undevelopable land in exchange for approximately 700 acres at the base of the mountain that would be used as the location for a day lodge, a ticket office, a ski rental shop and--eventually--some residential units.

“This needs to happen,” said an aide to Rep. James V. Hansen (R-Utah), who has been pushing the deal for Holding.


But few special interests have better reason to be apprehensive than the executives of Group Health Inc., a New York-based health maintenance organization that would be assured nonprofit tax status by the pending spending bill.

When Clinton vetoed the legislation recently, it was the third time that an omnibus bill containing GHI’s long-sought statutory tax exemption had failed. Previously, it had been part of a bill vetoed by former President George Bush and a provision in the massive health care reform bill that died on Capitol Hill in 1994.

Fears that such special-interest provisions may be lost are hardly unjustified. This year, congressional insiders say, the partisan rancor stirred up by the spending battle has made it harder than usual to get unanimous consent for narrow-interest amendments to be attached to larger bills. Even the most noncontroversial judicial and ambassadorial appointments are held up.

Almost by definition, all of the obscure special-interest giveaways that emerge in the final days of the annual congressional spending ritual are controversial. It is traditional for members of Congress to wait for this final flurry of activity to bring up items that might be successfully challenged at a less hectic time in the legislative year.

And Holding’s land swap is no exception to this rule.

Led by the Citizens’ Committee to Save Our Canyons, which argues that the swap would have an adverse environmental impact, opponents have succeeded for nearly a decade in preventing the Forest Service from accomplishing the deal by administrative fiat. That is why Holding turned to friends in Congress.

Like virtually everyone with narrow special-interest issues at stake in the current spending standoff, Holding is a frequent campaign contributor. In fact, political scientists say these are precisely the kinds of special legislative benefits that are reserved for the most generous contributors.


In recent years, according to the Center for Responsive Politics, which monitors campaign contributions, Holding, his family and executives of his companies have given $111,320 to federal candidates. This included $9,750 to Sen. Orrin G. Hatch (R-Utah) and $5,200 to Hansen, who have teamed up to enact the land swap into law.

Hansen succeeded in getting it passed by a House subcommittee as a free-standing bill, and Hatch recently persuaded the Senate Energy and Natural Resources Committee to report it to the floor, where he is expected to offer it as an amendment to the final spending bill.

Likewise, Glaxo Wellcome, the giant pharmaceutical firm embroiled in a fight to retain a 19-month extension of its exclusive patent on the popular ulcer drug Zantac, has doubled its PAC contributions to members of Congress in the last year--giving $122,818 between January and June.

With considerable help from those members of Congress who have received these contributions, Glaxo defeated several amendments offered by Sen. David Pryor (D-Ark.) to repeal the patent extension. But Pryor is threatening to attack it again when the final spending compromise comes to the Senate floor.

Ironically, the extension originally was created by an equally obscure provision buried in earlier legislation implementing the General Agreement on Tariffs and Trade (GATT). Other pharmaceutical companies that appear to benefit to a lesser extent are Merck, Pfizer and Bristol-Myers.

Personal friendships often prove every bit as helpful as campaign contributions in winning special-interest benefits. Congressional sources say Hatch was acting out of his friendship with LaVelle Edwards, the Brigham Young University football coach, when he offered a provision to protect the tax status of the American Football Coaches Assn. pension plan.


In the cases involving Zantac, Group Health and the coaches, as in many other instances of narrowly focused provisions pending before Congress, the special interests are not seeking any dramatic changes. They are most often seeking to preserve the status quo--or just tinker with it.