WASHINGTON (FNS) -- The days are numbered in Congress' 2000 legislative calendar, and election-year politics are at the heart of the remaining issues on the table that impact the food-retailing industry.
Counter to the industry's wishes, it looks like lawmakers will find time to increase the federal minimum wage and won't eliminate or even reduce the estate tax. Those decisions would result from the election year popularity of raising the wage floor and difficulty of realizing tax breaks of any consequence during this season.
Although few, there are other issues on deck affecting the industry, on which lawmakers could find time to weigh in during the four months left in their schedule until adjournment. These include measures related to OSHA standards, slotting fees, product tampering, health care reform and country of origin labeling for meat.
Topping retailers' must-have list is legislation delaying release of OSHA economic standards, until the National Academy of Sciences completes a study about how to reduce workplace repetitive motion injuries. Retailers are part of a large business coalition lobbying against the regulations they claim would be costly, onerous and duplicating existing OSHA protections.
The House has already passed the ergonomics-standard-delay bill. However, in the Senate, despite strong support for the measure within the Republican majority, it's uncertain whether room will be made for it on an already tight Senate agenda.
"The whole thing comes down to how dedicated the Senate leadership is to making it happen," said John Motley, senior vice president, government affairs, Food Marketing Institute.
Legislation granting a reprieve might be short-lived. The NAS study is due after the first of the year and "we're not real optimistic it will produce anything different than what proponents of the (ergonomics) rule have advocated all along," said Kevin Burke, vice president, government relations, Food Distributors International.
Aside from potential legal challenges to try and block an ergonomics standard, opponents say their last hope rests with a change of administrations.
With the Clinton administration "hell bent on having this rule in place before they leave office," Motley said an administration run by Vice President Al Gore would ensure the status quo, while "if George Bush wins the election this rule will be reviewed."
Also on the list of legislation retailers are following include health care reform and product anti-tampering bills. Neither one is on the industry's wish list, but officials have been working to minimize any fallout the measures might have if they pass.
The key issue in the health care reform bill is whether companies operating in multiple states will maintain their protection against patient malpractice lawsuits. House-Senate lawmakers are now in talks reconciling differences between bills that have already passed each chamber. However, given time constraints, and the desire for Republican-controlled Congress not to give President Clinton and the Democrats a campaign issue, it's conceivable that a final bill might not be crafted, Motley said.
The product tampering bill is just starting to work its way through the House. The measure, sponsored by Reps. Bob Goodlatte (R., Va.) and Zoe Lofgren (D., Calif.), is intended to address consumer safety concerns arising from the removal of expiration dates and product identification codes.
Retailers were concerned the bill was too broad because it might also make removal of distribution codes illegal. Manufacturers of brand-name products ranging from baby food to shampoo were angling to keep distribution codes in the bill.
But distribution codes appear to have been excluded from the measure following protests from mass retailers, supermarkets and those who distribute grey market goods. These businesses were concerned manufacturers would retaliate against distributors and retailers for dealing in diverted products. Language was also added to levy fines according chains, instead of numbering violations per store.
Inquiries into the retail and wholesale practice of charging manufacturers slotting fees in exchange for carrying their products continues to be a Capitol Hill focus. Senate Small Business Committee Chairman Christopher Bond's (R., Mo.) investigation of the varied practice is ongoing. No legislation has been announced.
On the administration side, the Federal Trade Commission, with oversight on anti-competitive business practices, plans two days of workshops in May on slotting fees to delve into when these charges are levied. The FTC has been conducting its own review of slotting fees, but as is customary with the agency, officials declined to discuss the inquiry.
Another issue that's so far evaded legislative action involves labeling meat according to its country of origin. Last year the issue was caught up as part of an overall debate about how to stem the decline of U.S. farm prices. One of the culprits cited for lower beef and pork prices is import competition and some farm-state lawmakers have advocated a mandatory labeling scheme to single out U.S.-made product, assuming consumers would prefer American made.
Labeling legislation has been sidetracked since a voluntary labeling initiative was proposed by the FMI, American Meat Institute and American Cattleman's Association. FMI's Motley said a remaining obstacle to the program's launch is reaching agreement on how to define an American cow. About 1.2 million head of cattle are brought annually to the U.S. from Canada and Mexico to be fed and fattened before being slaughtered.
"We have to decide whether the feeders are American cattle or not," Motley said.
The fate of a $1 minimum wage increase from the current $5.15 federal wage floor is now in limbo, although there's broad Republican and Democrat sentiment to pass a hike this year.
"It's coming down to whether there will be a three-year or two-year increase," said Tom Wenning, vice president and general counsel, National Grocers Association. The House has passed an increase over two years and a Senate-approved bill calls for three years.
The fate of the minimum wage hike is further complicated by Republican calls for a package of tax breaks to offset the cost of a wage increase to businesses. The Senate and House have their own versions of tax breaks, and a reduction of the estate tax is part of each.
But so far the Clinton administration has threatened to veto a minimum wage bill with a tax package attached, although the President has signaled potential support for a separate tax-cut package of limited scope.
Because it's an election year the chance of a minimum wage bill finally being signed into law are considered good, given that an increase has already been voted on by both chambers and President Clinton appears eager to see a wage measure signed. However, Burke, of the food distributors' association, said he can envision the measure being stalled. "If the President is firm on having only a two-year (wage increase) with no tax package attached, there is going to be a stalemate," he said.
The future of the estate tax being repealed this year, or even lessened, is murky and it's widely considered to be an issue relegated to next year, after the election. Although repeal is a popular cause in both chambers -- the House is even expected to bring up an estate tax measure for a vote -- bringing the bill up in the Senate would prove difficult. Senate rules allow other tax measures to piggyback on tax legislation, threatening the potential to create a package the size of which the President has threatened to veto.
Furthermore, the Senate has already signaled the estate tax isn't on the agenda by not including it in the chamber's minimum wage bill as a tax offset. The House wage bill includes the estate tax repeal.
"Our game plan is to keep the estate tax before the American people during the campaign so it will be seriously considered next year," said FMI's Motley.
Another tax issue whose fate thus far has been tied to the minimum wage debate involves whether inside sales staff should be paid on a commission basis. It's an issue furthered by wholesalers and is contained in the House-passed minimum wage tax offset package.
In-house sales staff are treated under the Fair Labor Standards Act as non-supervisory employees who are paid an hourly wage plus overtime. This status, industry officials argue, limits their salaries, as well as their sales. These workers should therefore be treated as outside sales staff who are paid a base salary plus commission.
FDI's Burke said the tax change is still alive and could very well be included in a modest tax package the President has suggested he'd sign. Another tax issue dear to wholesalers, changing the FLSA so employers can award incentive bonuses without having to recalculate a workers' base wage, still has strong support in the Senate, Burke said.
Much of the food processors' focus this year has been on pressing for Congress to grant China permanent normal trade relations status, a step needed in its bid to join the World Trade Organization. Processors are eager to increase their export business by having China's markets opened as a member of the WTO.
On the domestic front, processors continue to agitate for passage of a bill making food warning labels uniform on a national basis.
According to Mary Sophos, senior vice president, government affairs, Grocery Manufacturers of America, the measure has 77 cosponsors in the House and 25 in the Senate. The bill would make the Food and Drug Administration the judge of whether warning labels are needed. The measure would also end individual state efforts to require various health warning labels.
Despite the bill's growing support there might not be room on the truncated congressional calendar to give it an airing.
House and Senate "leadership's attention is focused on the big ticket items that need to get done," Sophos said. However, there still could be movement on the labeling bill, she said. "You'd be surprised in an election year what people are motivated to do because they want to show progress."
