How The Little Guy Gets Crunched

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ILLUSTRATIONS FOR TIME BY PETER KUPER

THE GREAT S&L; GIVEBACK Owners of savings and loan associations, many of whom are suing the Federal Government for clamping down on them during the S&L; crisis in the 1980s, will benefit from a one-paragraph clause that was slipped into legislation that will hold the U.S. government liable for billions of dollars in damage claims because federal regulators nixed certain accounting practices. As is typical with special-interest measures, there were no hearings or estimates of the cost before the clause mysteriously showed up in the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1998. Among the potential beneficiaries: billionaires Ron Perelman and the Pritzker and Bass families. The losers: all other taxpayers, who will have to pick up the tab.

The future promises much more of the same. In this presidential election year, companies and industries that hope for special treatment in the new decade are busy making their political contributions and their connections. Examples:

A LONGER LIFE FOR GOLDEN DRUGS Major pharmaceutical companies will seek legislation to extend the patent life on their most valuable drugs. In the past, such giveaways were often inserted into unrelated legislation and covered a single drug or two. But this year, watch for heavy lobbying for the granddaddy of all patent extenders. It would protect pharmaceutical company sales of $3 billion annually and add years to the profitable life of at least seven expensive drugs, such as Schering-Plough's Claritin for allergies and Eulexin for prostate cancer, SmithKline Beecham's Relafen for arthritis and G.D. Searle's Daypro for arthritis. The big losers: patients, especially senior citizens on fixed incomes, who must buy expensive prescription drugs instead of cheaper generic versions. Estimates of the added cost run from $1 billion to $11 billion over the next decade.

CARS WITH A CHECKERED PAST The National Automobile Dealers Association is pushing for a federal law regulating the sale of rebuilt wrecked cars. Like a lot of special-interest legislation, the National Salvage Motor Vehicle Consumer Protection Act, as it's called, sounds good. No one is likely to argue with its call for federal standards to govern the sale of "nonrepairable and rebuilt vehicles." But look closely. The fine print actually provides minimal standards, gives states the option of ignoring these, applies to only half the cars on the road and keeps secret the history of near totaled vehicles. Sponsored by majority leader Lott, the bill has cleared the Senate Commerce Committee, whose chairman, presidential candidate John McCain, is a co-sponsor. Losers: consumers who unknowingly buy rebuilt wrecks at inflated prices.

Both the recipients of campaign contributions and the givers insist that no public official is for sale, that no favors are granted in exchange for cash. Few people believe that; U.S. Supreme Court Justice David Souter summed up the prevailing public attitude during arguments in a case that led the Justices last week to uphold the current $1,000 limit on individual campaign contributions. (Donations to parties are still unlimited.) Said Souter:

"I think most people assume--I do, certainly--that someone making an extraordinarily large contribution is going to get some kind of an extraordinary return for it. I think that is a pervasive assumption. And...there is certainly an appearance of, call it an attenuated corruption, if you will, that large contributors are simply going to get better service, whatever that service may be, from a politician than the average contributor, let alone no contributor."

Campaign-finance reform has emerged as an issue during the budding presidential race. Three of the four leading candidates are for it; one is against. McCain has made limiting campaign contributions his defining issue, although the Arizona Republican has accepted contributions from corporations seeking favors from his Commerce committee. Bill Bradley has also spoken out for reform, calling for public financing of elections. Vice President Gore, although involved in the Clinton Administration's 1996 fund-raising scandals, also advocates publicly funded campaigns. Only Texas Governor George W. Bush favors the status quo.

Just how obsessed with raking in cash are the 535 members of Congress?

A veteran Washington lawyer who once served an apprenticeship with a prominent U.S. Senator relates a telling experience. The lawyer, who represents an agency of a state government, visited the home office of a Congressman in that state to discuss a national issue affecting the agency and, indirectly, the Congressman's constituents. After an effusive greeting, the Congressman's next words were brief and to the point: