WASHINGTON (FNS) -- While supermarket operators didn't get everything they wanted during the recently completed session of the 105th Congress, they did benefit from tax cuts and blocked several pieces of legislation the industry opposed.
"It wasn't everything we hoped for, but it was significant," said John Block, president of Food Distributors International, Falls Church, Va.
Tom Wenning, senior vice president and general counsel of the National Grocers Association, Reston, Va., blamed some of the failure of Congress to act on industry-backed bills on partisan bickering.
"This session was a lot of give and take," Wenning said. "It may continue into next year, an election year. This was a fairly good year in that some things moved, but many things weren't completed. Next year we'll have the opportunity for a whole variety of things to be acted upon."
Tax cuts benefiting the industry were included in a bill aimed at balancing the federal budget by 2002. Overall, Congress reduced taxes by $91 billion, and the industry benefited from reductions in estate taxes and cuts in capital gains taxes. The estate tax levy was reduced by raising the amount of property excluded from taxes from $600,000 to $1.3 million. The change also would phase in an increase in the unified tax credit to $1 million by 2007.
The industry plans to seek additional estate tax reductions when Congress reconvenes in 1998, and has the backing of Republican House leadership. House Speaker Newt Gingrich, R-Ga., told reporters at the close of the first session that he planned to renew his quest to phase out the levy in the new year.
The maximum capital gains tax rate was reduced from 28% to 20% on assets held at least 18 months. Rates on assets bought after 2000 and held at least five years would be reduced to 18%.
In addition, Congress extended the work opportunity tax credit from Sept. 30, 1997 to June 30, 1998. This credit, heavily favored by retailers, gives employers credits on portions of salaries paid to qualifying hard-to-place individuals who may be disabled or disadvantaged.
George Green, vice president and assistant general counsel for the Food Marketing Institute here, lamented the items left on the congressional agenda, but praised passage of the tax-cut package. "That's what this Congress is going to be remembered for."
One item blocked by the industry was a National Labor Relations Board proposal that would have made it easier to organize individual units of retailers. Another stalled proposal would have permitted the Occupational Safety and Health Administration to issue ergonomic regulations. To block it, Congress refused to provide the OSHA with money to promulgate the regulations through Sept. 30, 1998.
One proposal favored by the industry that did not make it through Congress was President Clinton's request for fast-track negotiating authority so he could pursue additional trade agreements. The supermarket industry backs liberalized trade rules because many retailers import a large portion of their inventory and producers export many of their crops. While Clinton's fast-track request was supported in the Senate, it failed to muster a majority in the House, and rather than have it defeated in a floor vote, leadership pulled it from the schedule. The administration has vowed to revive it next year.
Organized labor was instrumental in its defeat by mounting a yearlong campaign based on the charge that free trade lowered working standards and environmental protections around the globe.
One idea that was introduced as a legislative proposal this year was a plan that would exempt inside sales people from overtime restrictions in the Fair Labor Standards Act. Rep. Harris Fawell, R-Ill., chairman of the House Employer-Employee Relations Subcommittee, is bill sponsor. Action is expected next year.
