State of Disunion: What Will Washington Do?

As the nation moves closer to the upcoming presidential and congressional elections that could have a tremendous impact on the business climate, food retailers are keeping a close eye on issues related to health care reform, taxes, product labeling and interchange fees that could impact their operations and planning.

Regulatory and judicial issues will be on the front burner, as much of Congress is expected to be occupied by election issues as the year progresses. Some legislators have already been pulled away from focusing on issues in order to campaign because of the early primaries this year and in some cases because redistricting has thrown some sitting members into new election races.

“Normally in an election year, our rule of thumb for legislation is that everything has to happen before June 30, but the challenge this year with the primaries is that we only have so many legislative days in the first part of the year,” said Jennifer Hatcher, group vice president, government and public affairs, Food Marketing Institute, Arlington, Va. “It’s unclear how that will play out.”

Tom Wenning, executive vice president, National Grocers Association, also based in Arlington, said President Obama’s State of the Union speech, scheduled for later this month, could be quite telling in terms of how well the Democratic White House works with the Republican-controlled House of Representatives and the Democratically controlled Senate.

“The message he delivers there — both what he says and how it is received — will probably set the tone for the relationship between the president and Congress in 2012,” he said.

He cited the recent impasse over extending the payroll tax deduction as an example of the partisanship that has characterized many of the issues in Washington lately.

The recent recess appointments Obama made — naming Richard Cordray the head of the Consumer Financial Protection Bureau and tapping three new members for the National Labor Relations Board — will only serve to increase the rancor between the two parties, Wenning said.

“The big question is what impact are those going to have on the legislative agenda for 2012,” he said. “Certainly we don’t think that contributed in a positive way.”

In addition to Cordray, the president also named Democrats Richard Griffin and Sharon Block and Republican Terence Flynn to the NLRB, restoring the full five-member board and maintaining its Democratic edge by a three-to-two margin.

Hatcher agreed that the recess appointments were agitating to many in Congress.

“For folks like me who are a student of government, I can’t think of anything more outrageous that has happened in the last decade,” she said, noting that it wasn’t the fact that the appointments were made during the recess that was problematic, but that the nominees were only presented to Congress a few days before the recess.

“There was no vetting about whether they were a good candidate or a bad candidate,” she said. “Sometimes things come up and need to be addressed before you put somebody in a position like the one they have been nominated for. That will likely have an impact on a host of different actions, and it really puts a bad taste in the mouths of folks trying to work together to accomplish something, so it really stifles those relationships that were starting to take off a little bit.”

The NLRB appointments could also impact labor regulations by making the board more sympathetic to unions, Wenning explained, as the board had already taken some steps to speed the union election process.

“We are concerned that it is going to politicize the National Labor Relations Board’s agenda even more, and their pro-union aggressive agenda certainly is important to us as the landscape changes for labor relations issues,” he said. “I think we will be watching that regulatory agenda very closely in 2012.”

In 2011 he said NGA relied on its outside labor relations counsel, Epstein Becker Green, to provide advice and counsel to its members about how to comply with labor relations regulatory issues and they will continue to do so in the coming year.

The new election rules proposed by the NLRB, which could reduce the time required for an election to as little as 14 days, are “a major concern,” Wenning said.

In addition, NGA is concerned about a proposed regulation by the Department of Labor concerning rules for consultants and their communications with employers.

“The combination of the National Labor Relations Board reforms and the Department of Labor proposed reforms is a significant concern, not only to employers but also to the labor relations counsel that provides them with advice and counsel,” Wenning said.

NGA has been part of the Coalition for a Democratic Workplace, which filed suit against the NLRB seeking to block the board’s new rule requiring all employers to post a notice called “Notification of Employee Rights Under the National Labor Relations Act.”

The U.S. District Court in Washington held hearings on the matter in December, and Wenning said there could be a preliminary decision on the matter this month.

Wenning predicted more litigation could ensue in opposition to the newer proposed regulations as well.

With the House and Senate being controlled by two different parties, any labor-related legislation is not likely to move through Congress, Hatcher pointed out, leaving regulatory bodies like the NLRB to take up those issues.

“The labor issues are going to have an enormous impact; it’s just more likely to be regulatory or judicial rather than legislative in 2012,” she said.