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Amendments Muddy Hurricane Relief Package

The Budget
By Juliet Eilperin
Washington Post Staff Writer
Sunday, April 4, 1999; Page A4

Congressional allies of the oil and mining industries have converted a Central American hurricane relief bill into a private aid measure of their own, crafting legislative language that would save companies millions of dollars in federal payments.

In the time-honored tradition of the appropriations process, senators have attached a provision to the emergency spending bill blocking the Clinton administration from enacting regulations that would force oil companies to pay more for pumping crude from federal property. Another measure amended to the same bill would halt new cleanup and financial requirements on mining companies extracting minerals from public lands.

Although these valuable "riders" have attracted little notice, industry officials have pushed aggressively for them over the past several weeks, angering good-government advocates, drawing a veto threat and helping drag out passage of a bill the administration once hoped would have moved through Congress by last month.

"What's most outrageous is this is typical, behind-the-scenes shenanigans that special interests are using to get pork polluter handouts," said Anna Aurilio, a staff scientist at the U.S. Public Interest Research Group, which opposes the measures.

Senators from states affected by the pending federal rules, however, said they had no choice but to seize the opportunity and provide aid to ailing industries. Sen. Jeff Bingaman (D-N.M.), who wrote an amendment to the bill providing small oil and gas producers with $123 million in tax deductions, said the economy in some portions of southeastern New Mexico is near collapse.

"That's what prompted me to get some attention in this emergency bill," Bingaman said. "We're concerned about maintaining our agricultural industry, we're concerned about maintaining the steel industry, we're concerned about maintaining a lot of industries. It seems to me part of keeping our economy strong is maintaining our domestic oil and gas industry as well."

From the outset of the debate over the $1 billion emergency spending bill, House Appropriations Committee Chairman C.W. Bill Young (R-Fla.) made it clear he was uninterested in attaching special-interest provisions that might invite a presidential veto or slow passage. The bill includes disaster relief for Central America, aid to U.S. farmers, and money to Jordan as part of last year's Wye River peace accord.

"I think appropriations bills should be appropriations bills, and other issues that are not appropriations bills should be dealt with by the appropriate authorizing committee," Young said, adding he conveyed this sentiment to oil lobbyists who approached him for help.

But the Senate took a decidedly different approach, attaching an array of unrelated items to its version of the bill. Both chambers have passed their respective relief bills and must iron out their differences before passing the measure to the president.

The administration already has protested the Senate provisions targeted at oil and mining companies and suggested they could invite a veto if they survive the conference committee. In a statement, the White House urged Congress "not to take actions that could result in gridlock and delay."

Both the oil and mining provisions in the Senate bill involve issues of long-standing dispute between Congress and the administration. Under current law, oil companies must pay the government 12.5 percent of the value of the oil they extract from federal land, but Interior Department officials and the industry differ over how to calculate that value.

Right now, it is up to the companies to provide their own estimates, but in 1995 the Clinton administration began revising the rules to tie the royalty fees to the world market price of oil. The stakes are high -- the industry paid $1.5 billion in federal royalties in 1996, and a proposed change would yield an additional $66 million in annual revenue for the government.

Oil companies consistently have argued that the administration has no right to change the rules on how it charges the industry; instead they are lobbying to make "in-kind" payments in which they would give oil, rather than money, to the government. Administration officials respond that such a revision would cost taxpayers at least $330 million.

The new rule charging higher royalties was slated to take effect last year, but last April Sen. Kay Bailey Hutchison (R-Tex.), backed by then-House Appropriations Committee Chairman Bob Livingston (R-La.), inserted an amendment to an emergency tornado relief bill delaying its implementation.

The rule has been blocked ever since. After winning the initial battle last spring, lawmakers from oil-producing states mandated a second delay during the regular appropriations process last fall. The rule is scheduled to become final in June, but the new Senate version would delay its implementation until October.

Mining companies do not plead poverty but simply argue that existing state regulations make new federal bonding and environmental standards redundant. When the rules were in the works in 1997, Sen. Harry M. Reid (D-Nev.) put in language delaying them, and the next year he postponed them again by requiring a National Academy of Sciences study on the issue.

Reid spokeswoman Jenny Backus said the senator worked again this year with a coalition of senators to place an additional four-month delay in the emergency bill so the administration can take the study's findings into account.

In both the oil and mining provisions, recent changes in the Capitol Hill landscape had a significant impact on the process. Livingston's decision to retire this year robbed oil lobbyists of one of their most prominent House allies, while the retirement of Sen. Dale Bumpers (D-Ark.) made the job of pro-mining senators infinitely easier.

"There's a huge factor," a Senate aide said of Bumpers, who used to rail against mining companies on the Senate floor. "No one's sort of taken it on as a pet cause."

House Democrats including Carolyn B. Maloney (N.Y.) and George Miller (Calif.) said it is up to the administration to assure that the new royalty scheme goes into effect by vetoing the emergency bill if it ultimately includes the riders to which they object.

"It's the midnight hour for the administration; either they do it or they don't," Miller said. "If they don't, I don't think there's any chance to do these things for the life of the administration."

© Copyright 1999 The Washington Post Company

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