'Takings': Lobbyists love it, the public doesn't

  WASHINGTON, D.C. - Remember Mr. Smith proclaiming that lost causes were the only ones worth fighting for?


Even without Jimmy Stewart's comforting drawl, that sentiment strikes a chord. Who can resist the charm of the loser who does not quit, the true believer who persists despite the disapproval of the multitudes?


In that light, consider the champions of what is known as "takings' legislation. The bill they support will not be enacted; by all evidence, a large majority of the public would not want it enacted, so fighting for it is politically dumb.


Yet onward goes the battle. It is a matter of principle. It is that old "never-say-die" outlook. It is noble, poignant and heroic.


Or maybe it's just the money.


The bill, officially known as the "Private Property Protection Act," would overturn several hundred years of Anglo-American legal thought and practice by redefining the meaning of "taking."


The definition is now and has been that government must compensate private landowners when it actually takes away their property - to build a road, for instance. There's no dispute about that. It's right in the U.S. Constitution's Fifth Amendment, the one you can invoke to avoid testifying against yourself, which then adds, "nor shall private property be taken for public use, without just compensation."


On a few occasions, the U.S. Supreme Court has ruled that a "taking" occurs even when the land remains in private hands. If a regulation denies an owner all, or almost all, of the economic value of the property, the government has to pay compensation. But these are special cases. As a unanimous Supreme Court recently noted, "mere diminution in the value of property, however serious, is insufficient to demonstrate a taking."


Not under the bill in question. Should it become law, landowners would have to be compensated when federal regulation diminished a property's fair market value by 50 percent.


An earlier Senate attempt would have required compensation if property values fell just 20 percent.


The change is obviously meant to render the bill more palatable. But it didn't, and in late July, Majority Leader Trent Lott said the bill would not be brought up, at least not before the August recess.


One reason the switch from 20 percent to 50 percent didn't work is that the change was more cosmetic than real. What did not change was the provision allowing property owners to seek compensation for an "affected portion" of their land. In other words, if you own 10,000 acres and a regulation applies to 50 of them, you could demand compensation if you could show that the market value of those 50 acres would be diminished by 50 percent.


Many is the property owner who could argue that the local zoning code, the Endangered Species Act or various anti-pollution or wetlands protection rules reduce the potential value of some portion of his land by half. If he can't build as many houses or cut down as many trees, he can't make as much money. Nor can he sell the property for as high a price.


The bill also opens up the question of just what constitutes "private property," in a manner particularly applicable to the West. It states that government action which could reduce "rights to water" would call for compensation to the individual who was getting the water.


As it stands now, most Western water users are getting the stuff at below-market rates, subsidized by the taxpayer. Under the legislation, a decision to withdraw that subsidy would constitute a "taking" of private property. It is not clear whether federal grazing leases, equally subsidized, would also be considered private property, requiring government compensation to any rancher ordered to reduce an over-grazing herd. But no doubt the point would be argued.


It would probably be argued by the National Cattlemen's Beef Association and the Sheep Industry Association, two of the many natural resource industry groups fighting hard for the legislation. Takings has very little popular support, but there is a great deal of money behind it. Political action committees which support the bill reportedly contributed $672,654 to 10 Republican senators last year, and more than $1.7 million to Senate Judiciary Committee members between 1984 and 1989.


It's easy to see why so many ranchers, miners and loggers are so enthusiastic. They'd love to be free of regulation. There's a bit of mystery, though, about the bill's most energetic supporters - the real estate industry. The big developers, to be sure, have as much to gain as the big farmers and timber companies. But it's generally considered poor business to offend your customer base, and there is one very important constituency that could be badly hurt should these proposals ever become law - homeowners.


If you own a home, the zoning that prevents a developer from putting up a factory next door, like the regulation which prevents the nearby stream from stinking with pollutants, does not threaten your property rights. It enhances them.


Most Americans are homeowners, but together they own a tiny percentage of all privately owned land in the country. According to a study of figures from the Agriculture Department, 78 percent of all privately owned land is held by just 2.6 percent of the nation's landowners.


This basic arithmetic explains why milder statewide versions of the federal takings bill were overwhelmingly rejected in referendums in Arizona in 1994 and in Washington state last year.


In fairness, it should be noted that the opponents - environmentalists, good-government types and assorted liberals - prevailed by using an argument which is a touch disingenuous. The proposed takings laws, they said, would be "budget-busters." They would lead to (gasp!) higher taxes.


Not really. Such laws would cost billions only if the governments subject to them went ahead with regulations and paid the compensation. But that wouldn't happen. What would happen is that there would be precious little regulation.


Which is precisely what the takings faction intends. Charles Fried, a solicitor general under Ronald Reagan, saw this coming in the early 1980s: "Extreme libertarian" activists, Fried wrote, "had a specific, aggressive and it seemed to me quite radical project in mind: to make government pay compensation ... every time its regulations impinged too severely on a property right ... If the government labored under so severe an obligation, there would be, to say the least, much less regulation."


Too little even for a conservative such as Fried, or for a great many Republican senators from the eastern half of the country. Along with almost all the Democrats, those Republicans will probably block the bill should it come up this summer. If by chance they do not, President Clinton can be expected to veto it.


Why, then, do its proponents push on? Well, no doubt they believe in their cause. They're also in this for the long haul. Passage may be impossible now, but what about 10 years hence? No one can be sure, and the people who would benefit from takings legislation would make so much money from it that the money being spent to push the bill is relatively chicken-feed.


Which is feeding a lot of chickens. More than ever before, legislation and government have become businesses. There are now enough people making a living as lobbyists and political advisors to distort the process they are trying to influence. One result is that as long as someone is willing to keep putting up some bucks, an issue will never die. The pollsters and advertising agents who earn their bread and their BMWs by pushing legislation double as the consultants who advise their clients whether or not to keep trying.


This creates what economists might call a marginal propensity to persist. Like many another cause (including some on the environmentalist side), "takings' has spawned a small but remunerative industry.


Could Frank Capra have made a heartwarming movie out of that?





Jon Margolis studies Washington from Vermont.