POWER 50: GOVERNMENT 2004-07-26 (1)

Amanda Weekes / Mark Hamstra

49. TOMMY THOMPSON, Secretary, U.S. Department of Health and Human Services

Key development: Implemented Medicare drug discount card program.

What's next: Fighting obesity and bioterrorism, coping with drug reimportation, and getting ready for permanent Medicare prescription benefit.

Tommy Thompson has waged many battles over the past year. His opponents have ranged from obesity, bioterrorism and a number of lobbyist groups.

Thompson, along with George W. Bush, received a lot of criticism recently about how the Department of Health and Human Services, Washington, reacted to the increased amount of reimportation of prescription drugs. The Medicare Discount Card program, designed to offer discounts to seniors and those without prescription drug coverage, was marked as "too little, too late" by the AARP and Democrats.

The program did not fail horribly, as some opponents predicted, but is gaining acceptance throughout the nation, said Bill Pierce, deputy assistant secretary for public affairs and media for the Centers for Medicare and Medicaid Services.

"We think this program is going relatively well, given that it's brand new. So you always have challenges to meet," said Pierce. "The good news is that we've been able to meet those challenges as they've come along." The attention of the department now moves to defining the rules and regulations that will govern the permanent Medicare drug benefit that will take the place of the stop-gap cards in 2006.

The fight against obesity has also come to center stage this past year, and Thompson has made it a top priority on his agenda. An amendment to the Nutrition Labeling and Education Act, which passed July 9, 2003, states that trans fat must now be included on the nutrition label of all foods, and new guidelines for carbohydrate calculations are currently being discussed.

"We've had a very interactive process," said Mary Sophos, senior vice president and chief government affairs officer, Grocery Manufacturers of America, Washington. "As the [FDA] moves through the process of finalizing those regulations, we've seen that they've taken to heart some of the practical and real-world suggestions from the industries about what will work and what won't, because that's our goal. We want it to be successful, and we want it to work. We've been very engaged, and they have been listening."

Additionally, HHS launched Smallstep.gov, a health and nutrition Web site that offers guidelines for a healthy lifestyle. Thompson is also working with the Department of Agriculture to develop a new food guide pyramid that is easier for Americans to follow. Sophos doesn't see that process slowing down anytime soon.

"I don't think any of the issues we are grappling with today are going to go away tomorrow," Sophos said.

AMANDA WEEKES

50. ALAN GREENSPAN, Chairman, Federal Reserve Bank

Key development: Raised interest rates for the first time in four years.

What's next: Keep nudging interest rates up while monitoring incomes, employment and inflation.

He hasn't pioneered any new shopping formats, developed any innovating food retailing technologies, or even fought any political battles on behalf of the industry. Yet Alan Greenspan does have a lot to do with how much money supermarkets tally in their cash registers at the end of the day.

As the chairman of the Federal Reserve Bank, Greenspan keeps his fingers on America's purse strings. With just a few words, he can turn frugal shoppers worried about the size of their grocery bill into confident spenders whose shopping carts runneth over.

"If [the Federal Reserve] jiggers the economy just right and gets full employment and keeps inflation low, that's what causes real incomes to keep increasing and standards of living to keep growing," said Steve Spiwak, senior economist, Retail Forward, Columbus, Ohio. "Demand for food is particularly sensitive to those real incomes."

Supermarket executives polled by SN in recent weeks have reported improving sales trends in the past year, which many attribute to the burgeoning economic recovery spurred at least in part by the Federal Reserve's manipulation of interest rates. After lowering rates for four years to increase business and consumer spending to fuel the economy, the Fed on June 30 raised rates a quarter of a point -- a signal that the previous four years of rate reductions had worked and that the economy was, in fact, back on track.

"Higher rates are basically a symptom of an improving economy," said Spiwak.

As it did following the last recession in the early 1990s, consumer spending is increasing because job and income growth are accelerating faster than interest rates are rising, Spiwak explained.

"Greenspan is doing a particularly good job at keeping interest rates at a neutral level," he said. "I think that his gradual approach to future rate increases is good, given the current inflation situation."

Last week, Greenspan said the economy was in the midst of a steady recovery, adding that the higher prices for fuel and some food products that have emerged this year were "transitory."

Greenspan's actions through the Federal Reserve also impact the stock and bond markets, influencing supermarkets' ability to borrow and invest.

"He is the single most powerful figure in how the economy is perceived in the country, which impacts both the consumer and the investment community," said Neil Stern, senior partner, McMillan Doolittle, Chicago. "For that reason, he is a very influential figure in the supermarket industry."

MARK HAMSTRA