WASHINGTON (FNS) -- The supermarket industry's agenda in Congress will be facing serious time pressures when Congress returns from its August recess.
A crowded congressional calendar and partisan bickering threaten action on several fronts, particularly on the $792 billion tax-cut package that includes estate-tax repeal, which President Clinton has vowed to veto.
This reality follows a year in which the industry has some things to applaud in relation to Congress. In addition to the estate-tax repeal, the House voted to delay release of the Occupational Safety and Health Administration's ergonomics standards, both supermarket-endorsed measures.
Moreover, legislation calling for inspection in foreign countries of U.S.-bound produce or other steps to further scrutinize imports appears to have stalled, much to the relief of the food industry, which considers such proposals unworkable.
Poised to be taken up by Congress when it returns Sept. 8 is a bipartisan measure allowing food stamp and Women, Infants and Children benefit recipients to use their electronically delivered funds at supermarkets across the continental United States.
But the time pressures on the estate-tax legislation are of particular concern to the industry.
"When you look at the current political situation it's difficult to see getting a bill that would repeal the estate tax between now and the 2000 election," said John Motley, senior vice president of government and public affairs for the Food Marketing Institute here. However, Motley said, Republican support in the House and Senate for estate-tax relief remains strong and could ultimately be a part of a compromise tax-cut package.
Tom Zaucha, president and chief executive officer of the National Grocers Association, Reston, Va., said the estate-tax repeal lobby needs to better emphasize the family-business survival aspect of the issue.
Zaucha doesn't rule out the possibility of a compromise that would protect family businesses, while answering Democratic concerns that a full repeal of inheritance taxes across the board is too broad. "We need to pull out all the stops and resources to make it a bipartisan issue," Zaucha said.
John Block, president of Food Distributors International, Falls Church, Va., said there may end up being a compromise on the estate tax, as well as other items in the tax package. The bill has drawn concern in the Senate from moderate Republicans and distaste from most congressional Democrats and the White House. Opposition is generally focused on the size of the tax package as endangering social programs like Medicare by refunding too much of the federal surplus.
"I don't know where we'll end up," Block said, adding that the Republican's fierce lobbying on behalf of the tax cuts "puts us in a much more favorable position" for later negotiations.
One provision in the tax bill that's relatively noncontroversial and is considered likely to survive in some form this fall is the Work Opportunity Tax Credit. The credit, widely used by retailers, allows for a 25% tax credit on the first $6,000 paid in wages to employees hired from various disadvantaged groups, like former welfare recipients, ex-convicts, summer-employed teenagers and Vietnam veterans. As included in the tax bill, the credit would be extended for 2.5 years. It expired in June.
There has been discussion that the tax credit, if not part of a tax-cut bill, could be part of a package of business-friendly tax-break "sweeteners" to offset an expected $1 increase in the $5.15 federal minimum wage. Republicans have all but conceded to Democrat demands for a wage hike, but are expected to demand some kinds of tax breaks , or a long phase-in period for the hike, to offset the costs of a higher wage. The supermarket industry is opposed to any increase.
Another wage issue that has yet to be aired -- one pushed by food wholesalers and distributors -- is a change in how in-house sales staff are treated under the Federal Labor Standards Act. These workers are paid overtime after working 40 hours, which industry officials says not only limits their salaries but also sales. The industry wants them to be treated as outside sales staff, who are allowed to be paid a base salary plus commissions. Kevin Burke, FDI vice president, said he expects a bill to be brought up in the House this fall.
Also left for fall debate in the Senate is a bill that would delay release by the OSHA of its proposed regulations addressing workplace injuries caused by repetitive motions, tasks, design of workstations or other causes.
A coalition of businesses, including supermarket retailers and wholesalers, is supporting a measure that would delay the regulations until a National Academy of Sciences ergonomics study is complete. The bill narrowly passed the House and is being threatened by a White House veto. In that event, supporters are hoping to attach the bill to legislation Clinton might be reluctant to quash.
Calls to pass legislation requiring meat to carry country-of-origin labels -- supported by the U.S. cattle industry -- - appear to be tempered, under a pending agreement by supermarkets and ranchers. The U.S. cattle industry has pressed for all meat sold here to carry a country-of-origin label as a means to promote U.S. meat in the face of foreign competition and flagging prices.
Under negotiations conducted by the FMI and the National Cattlemen's Beef Association, retailers would agree to feature U.S.-made beef. The U.S. Department of Agriculture would decide what constitutes U.S. beef -- for instance, whether a cow that's fattened in the United States and slaughtered in Mexico can be considered American-raised.
On another agriculture front, which has more immediate effect on food processing, is the perennial issue of repealing U.S. sugar subsidies and purchasing restrictions. U.S. food processors use about 15.2 billion pounds of sugar a year at a cost of $3.4 billion. If U.S. manufacturers were allowed to buy sugar on the foreign market for production, they would be paying roughly 5 cents less a pound, according to Gene Grabowski, vice president of communications for the Grocery Manufacturers of America here. A coalition for sugar reform estimates the U.S. sugar monopoly costs consumers about $1.2 billion a year.
"There are a handful of senators and congressmen from sugar states who want he subsidy," Grabowski said, explaining the continued difficulty in getting the benefit repealed even when other subsidies have been under attack in recent years.
Another issue being furthered by the food-processing industry, but which also is still waiting in the wings on Capitol Hill, is a measure that would require uniformity for health warnings used on food labels. Grabowski said the Senate Commerce Committee might hold a hearing on the issue this fall. However, the labeling issue isn't a must-do before the end of the year and can carry over into the 106th Congress' second session in 2000.
