Tuesday, December 23, 2008

Independent Grocer Memo: National Grocers' Association Asks President-Elect Obama to Look Out For Independent Grocers When He takes Office in January

Independent Food & Grocery Retailing USA

The National Grocers Association (NGA), the trade association for America's independent grocers, has sent a letter to President-elect Barack Obama requesting the new administation maintain a "level playing field" for U.S. independent grocers by enacting a federal economic stimulus package, supporting strong enforcement of federal antitrust laws (including the Robinson-Patman Act), supporting "fair" employer-employee legislation and supporting new federal legislation of credit card interchange fees.

The letter was sent to the President-elect last week, according to NGA president and CEO Thomas Zaucha.

In its letter, the NGA also offered some specific suggestions to the incoming President, who will be sworn into office on January 20, 2009. Those specific suggestions include decreasing corporate tax rates, or the taxes on individuals operating as subchapter S corporations or other pass-through entities. Most independent grocer members of NGA operate family or privately-owned supermarkets, hence this being an important issue to the trade group.

Regarding the inactment of an economic stimulus package, which President-elect Obama is talking about doing to the tune of $600 billion up to nearly $1 trillion shortly after he takes office, the NGA's letter says any such package should extend the current expensing and bonus accelerated depreciation legislation enacted by Congress and President George W. Bush, which is scheduled to run out if not renewed next year. Such provisions are beneficial to privately-held companies, such as the majority of those that comprise the independent grocer association.

From these more routine suggestions, the NGA's letter gets more interesting, touching on issues that are sure to be in conflict with policies of the incoming President and his supporters.

In its letter to President-elect Obama, the NGA argues for relief from the Federal Estate tax for its members, the majority of which operate family or privately-owned supermarkets, as we mentioned earlier. Estate tax relief and the outright elimination of what it and others have called the "death tax" (taxation on inheritance from one family member to another) has been one of the trade association's hot button legislative issues for decades. The amount of money (the threshold) in which estates are taxed was raised under the Bush Administration, with support from many Democratic members of Congress. However it appears the NGA wants even more relief for its members.

The letter to the incoming Democratic President also warned against inacting "over-regulation that can increase labor costs."

Additionally, In the letter to President-elect Obama, the NGA says it opposes mandates for paid sick leave, increased minimum wages, punitive civil penalties for employment law violations and expansion of employment discrimination laws. A pretty healthy laundry list we must say. President Obama has indicated he favors legislation on all four of these issues. Based on its letter it appears the NGA and the incoming administration are at odds on all of these matters then. But if both are willing to comprise they might be able to work something out?

The independent grocer's association also includes a "big issue" in its letter to the new U.S. President, writing that it opposes the Employee Free Choice Act., and a provision in the legislation called "card check," which would replace the current secret ballot method in which employees vote for unionization in secret, with a simple card in which the employees of non-union companies, including those who work for non-union supermarkets, could merely check "yes" on a card if they desire union representation.

It's not so much the actual checking of the card the NGA and others, including the U.S. Chamber of Commerce, oppose about the "card check" provision and the overall Employee Free Choice Act -- which passed the U.S. house of Representatives last year and just lost in the Senate in 2007 by a couple votes and is supported by President-Elect Obama -- it's the fact the legislation makes it much easier for workers and unions to organize, compared to the current system, that they strongly oppose.

In fact, the NGA says defeating the Employee Free Choice Act is its number one legislative priority for 2009, a top priority it shares with numerous other trade associations and U.S. corporations and small businesses. [Read more about the association's top legislative priorities here.]

However, the Employee Free Choice Act happens to also be the top priority for 2009 of organized labor -- getting the legislation passed that is. And, since organized labor was a key force in getting President-elect Obama elected, they have a strong ear in the incoming President, who says he supports passage of the act. Obama supported the act as a Senator in 2007 as well. He also sopported the act during his campaign for President.

Additionally, there is overwhelming support for the Employee Free Choice Act and its "card check" provision in the Democratically-controlled U.S. House of Representatives. House Speaker Nancy Pelosi has said she will bring the legislation up for a vote in 2009, adding that it will pass in the House by "even more than it did in 2007."

There also is majority support in the U.S. Senate for the Employee Free Choice Act. The legislation failed last year by only a couple votes. Since then the Democrats have picked up additional Senate seats in the 2008 election. They have about 58 seats so far and could add another depending on the outcome of the contested Senate race in Minnesota.

The Senate needs 61 votes to prevent a filibuster on the legislation (and on any legislation) by Senate Republicans. It's expected that with 58-59 Democrats voting in favor of the legislation (that assums all will vote in favor which isn't a given), plus the ability to pick up the two Independents in the Senate, plus a moderate Republican or two, like the two moderate Republican Senators from Maine for example, the legislation could pass the Senate with a filibuster proof majority.

It won't be easy though -- and corporate and trade association lobbyists have already started their campaigns against the legislation, even before the new President and new Congress takes office and even before new Employee Free Choice Act legislation has been introduced. It's called a premptive attack.

Lastly, the NGA letter urges the President-elect to make sure federal anti-trust legislation is strongly enforced. The trade group is concerned about any potential concentration of business among supermarket chains in the U.S. in terms of such actions posing a unfair competitive advantage to its independent grocer members. This includes wanting strict enforcement of the Robinson-Patman Act, which prevents price discrimination and related anti-competitive behavior. It's often been applied in food retailing mergers and other related issues of direct interest to the supermarket and grocery industries.

Some might say the trade group is pro-government regulation and legislation as long as it benefits it members, but anti-government legislation and regulation if it hurts its members. Such an argument is essentially correct -- not just for the NGA but for every trade association and interest group in Washington, D.C. This is how business is done in the nation's capital today. Competiting interest groups that are against government intervention of any kind on Monday are all for government regulation -- new laws, financial bailouts, ect. -- on Wednesday, depending on which of those two days their members' interests are being served.

Welcome to Washington, D.C. President-elect Obama. That's right, you've already been in the capital for a few years as a U.S. Senator. So you know how it all works.

Meanwhile, Mr. President-elect we do suggest you look out for the nation's independent grocers as they are a vital and dynamic part of food and grocery retailing in America. They are among the innovators. They are the home town folks -- the grocers who serve and give back to their communties the most generally. They also serve as the idea factory for the entire industry. If you see something a big chain is doing that's innovative, it's likely they got it from an independent.

Of course independent grocers, like all of us, need to look at the bigger picture as well. For example, the NGA might want to eliminate the estate tax completely. But we suggest that money might be needed to pay for all the corporate bailouts the Bush Administration is doing in its remaining days. Some of it also might be needed to feed the growing number of out of work and hungry Americans.

Don't forget NGA, it was the massive deregulation under President George W. Bush, who you supported twice, that is costing American taxpayers, including your member companies, trillions of dollars to bailout the financial institutions and now the Detroit automakers.

Great call on supporting President Bush twice by the way NGA -- he sure is an economic conservative, isn't he? The latest tally looks like he will be credited as being the biggest spender as President since LBJ and his great society. At least U.S. society got some benefits from LBJ's blank checks though. Mr. Bush leaves the country broke and in near-depression. The guns are in need of being replaced and there's very little butter. (Just rubbing it in a bit -- we all make bad calls; but twice?)

It's all about compromise though. Right NGA? Right Mr. President-elect? We need to do much of that in 2009 in order to get the country back on its feet, and to create stronger consumers who have the money to support America's independent grocers, who are the backbone of America and don't ask for bailouts, just like the majority of us. Fewer demands from the left and right and all around, more cooperation -- that should be the mantra for 2009, in our analysis.


>View the letter sent to President-Elect Obama by the NGA...NGA's campaign against the Employee Free Choice Act: N.G.A. Action Alert -- Oppose the Anti-Democratic EMPLOYEE FREE CHOICE ACT...Advertisement against: CDW Latest Print Advertisement...NGATV (its in-house Web Network) PR spot on its opposition to the Employee Free Choice Act: Watch now.

No comments: