Election Portends Status Quo

“We are going to continue to bring our message to Congress that this is not the right time to raise taxes on small businesses." — Greg Ferrara, VP of government affairs, NGA

WASHINGTON — Food retailers called for an end to Washington gridlock following last week’s national elections, with uncertainty looming over a range of issues, from tax reform to policies that could foster economic growth.

“Our industry is challenged by continued high unemployment and the continued uncertainty that we face coming out of Washington,”  said Steve Smith, chairman and chief executive officer, K-VA-T Food Stores [2], Abingdon, Va. “We need to have folks in Washington that will at least sit down and talk with each other and try and come up with some budgets and try and get our spending under control, and try and get some confidence in our business community, so we can get some people back to work.”

President Obama’s re-election, along with the retention of a Democratic majority in the Senate and Republican majority in the House, likely ensures that health care reform will not be repealed, observers noted, and also portends ongoing labor-friendly activity at the Department of Labor and the National Labor Relations Board.

Of major concern to retailers is tax reform, with the so-called “Bush Tax Cuts” set to expire at the end of the year, hampering the ability of businesses to conduct financial planning.

Peter Larkin [3], president and chief executive officer, National Grocers Association, said President Obama and House Speaker John Boehner will play key roles in leading some tax compromises to avoid the so-called “fiscal cliff.”

“I think this election gives the president and the Democratically controlled Senate some very strong leverage, and it will require Speaker Boehner to be a tough negotiator about how this country will address debt reduction, tax reform and the fiscal cliff,” Larkin told SN.

Greg Ferrara, vice president of government affairs at NGA, added, “If the sides are willing to compromise, we are hoping there will be movement toward a deal that will protect many of our members who are pass-through entities — Sub-Chapter S and LLCs — and are taxed at the individual rate.

“We are going to continue to bring our message to Congress that this is not the right time to raise taxes on small businesses,” he said.

'A Flood of Regulations'

Concerning health care reform, Larkin said he expects “a flood of regulations that have been dammed up in anticipation of the election.”

Jennifer Hatcher, senior vice president of government and public affairs, Food Marketing Institute, told SN that one of the post-election challenges for FMI will be educating the new members of Congress on industry issues.

“There are at least 80 freshmen that we are going to get to need to know, and get them up to speed on issues that are critical to us and our customers,” she said. “In this 113th Congress, half of the House will have only been in Congress for six years or less.”

Read more: Retailers Oppose Obama Tax Plan [4]

Hatcher said she expects action on the “fiscal cliff” issue during the lame duck session that begins Nov. 13.

“There will have to be some kind of solution — I think they need some sort of a structure or outline for how to move forward,” she said. “I’m not sure the markets are going to buy kicking the can down the road without a structure at this point.”

Smith called on the government to step to the plate on those issues.

“If we ran our businesses the way some folks run our country, we would all be out of our jobs,” he said. “To not have budgets and not have certainty on what the tax structure is going to be two months from now is hard to fathom, but that’s what we as business leaders are faced with right now.”

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