INAUGURATION UNDERLINES BUSINESS-POLITICAL INTERACTION

These are busy times. First, inaugural week and all its festivities commanded a lot of attention. Then, of more finite interest, many topside executives in the food-distribution industry gathered at the weekend for this week's Food Marketing Institute 2005 Midwinter Executive Conference in Boca Raton, Fla.Again, in a finite way, those two events sound common chords because the fortunes of the food-distribution

These are busy times. First, inaugural week and all its festivities commanded a lot of attention. Then, of more finite interest, many topside executives in the food-distribution industry gathered at the weekend for this week's Food Marketing Institute 2005 Midwinter Executive Conference in Boca Raton, Fla.

Again, in a finite way, those two events sound common chords because the fortunes of the food-distribution business are linked in some ways to political directions set in Washington. There can be little doubt the intersection of politics and business will be a topic of discussion at the Midwinter event, not only in formal presentations, but also in informal caucuses in the hallways.

Generally, business interests are sanguine about how the Republican political agenda is likely to unfold during the next four years. Nonetheless, there are concerns about how certain policies favored by many food-distribution executives will end up after being debated in Congress in upcoming months.

Apropos to this, in a couple of recent issues of SN, there have been feature articles about executives' concerns for the future and concerns about the future direction of various political agendas. Now is a good time to take another look at what some of that thinking is all about. (The survey about executives' predictions was in the SN issue of Jan. 3; the political wrap-up in the issue of Jan. 17.)

One issue that surfaced as a vexing concern in both news features was the cost of health care. "Health care costs and insurance are still a great concern," remarked one executive. Then, in the political wrap-up, it was noted that proposals are in the air concerning tax-free employee health savings accounts to offset insurance deductibles, together with proposals to limit medical malpractice awards.

These proposals are seen by many as ways to nibble around the edges of the problem, not as means sufficient to cure the ill. The debate that needs to be enjoined at some point is far more fundamental, namely whether private enterprise is the proper entity to underwrite the medical costs of vast numbers of people. That's a debate that will probably have to await a time when the crippling budget deficits have been ameliorated, but it's one that should be entertained.

As always, issues concerning taxation are also high on the agenda. Many business executives are interested in making cuts in the inheritance tax permanent, although some in Congress are reluctant to set that in motion because of the amount of revenue that would be lost. Another proposal that would put far more revenue into play calls for the imposition of a sales tax of 25% or more on retail goods. Such a consumption tax is seen as replacement of individual and corporate income taxes. This proposal has ignited much suspicion, including from the National Retail Federation. That group intends to lobby against the proposal based on its projections that it would mean declining economic activity, employment and consumer spending.

Meanwhile, though, many supermarket operators are optimistic about the effects of the new dietary guidelines issued by the Department of Health and Human Services. See Pages 54, 60 and 63.