By Berman and Co.
2006 Political Outlook
With the November elections nearly nine months away, both parties have begun to set their strategy with an eye on the House and Senate majority.
The House GOP could slightly expand its majority or lose it outright. In the Senate, the GOP could add a couple seats to its 55-45 majority or see its edge wiped out.
For the first time in many years, both parties can make plausible arguments that the November elections will deliver them the majority.
On deadline, House Leadership was in the middle of hotly contested races for three positions: Majority Leader, Majority Whip and Policy Conference Chairman (a position that helps set the legislative agenda for the party).
All projections on the legislative priorities of the House are up for grabs until it becomes clear who will be helping Speaker Dennis Hastert (R-IL) lead the party.
It won't be more calm in the Senate. Majority Leader Bill Frist (R-TN) is retiring at the end of 2006. Jockeying to succeed him has already begun. Sen. Mitch McConnell (R-KY) is openly campaigning for the position. Sen. Trent Lott (R-MS) has recently suggested that he would like to return to leadership, even possibly his old position of Majority Leader.
As the year unfolds, there is one critical factor to keep in mind: the typically business-friendly Republicans really believe they can lose the majority. One of the rules in politics is that when a party believes it could lose power, its traditional agenda is upended.
House Republican Leadership Election House Republican Leadership is in the middle of hotly contested races for three positions: Majority Leader, Majority Whip, and Policy Conference Chairman (a position that helps set the legislative agenda for the party). The vote was scheduled for Thursday, Feb. 2.
Since Rep. Tom Delay (R-TX) resigned as Majority Leader, Rep. Roy Blunt (R-MO) has acted as both Majority Leader and Majority Whip and is campaigning to keep his position. Joining Rep. Blunt this race are Rep. John Boehner (R-OH) and Rep. John Shadegg (R-AZ).
Currently, 90 members of the House have committed their support to Rep. Blunt, giving the Temporary Majority Leader a decided edge over his competition. However, with 70 members undecided, Reps. Boehner and Shadegg have not been ruled out of the race. (After deadline, Boehner received the nod.)
While the recent lobbying scandals have clouded the party s image, many Republicans are looking for political leadership that will help them in the upcoming mid-term elections. Regardless of the election s outcome, House Republican priorities are expected to receive an overhaul this year.
Additional candidates in the election included:
Majority Whip: Rep. Eric Cantor (R-VA, Chief Deputy Majority Whip), Rep. Mike Rogers (R-MI), Rep. Todd Tiart (R-KS) and Rep. Zach Wamp (R-TN).
Policy Conference Chairman: Rep. Adam Putnam (R-FL), Rep. Thad McCotter (R-MI) and Rep. Darrell Issa (R-CA).
Senate Expected to Take Up AHP In February, the Senate Health, Education, Labor and Pensions Committee is expected to examine an Association Health Plan (AHP) proposal designed by Committee Chairman Mike Enzi (R-WY).
At the end of last year, Chairman Enzi supplemented House-passed AHP legislation with a new proposal. Since then, Chairman Enzi has been in talks with both small business groups and insurance providers to hash-out compromise legislation.
While the final version of this legislation has yet to be released, the basic outline will reflect his previous proposal. This bill would allow an association to offer traditional health care plans (called fully-funded plans), but it would not allow them to offer the kind of health care plans that are available to large businesses (companies with over 100 employees).
The ultimate goal of AHP legislation is to place the small business community on the same footing as major corporations when it comes to negotiating health care plans'; the Enzi bill takes a very small step forward in that process, but it does fall short.
Opponents of AHPs are also dissatisfied with the compromise, but both camps are waiting to torpedo the legislation in the hopes of finding a way to change the existing language.
With the reauthorization of the U.S. Patriot Act, it is unlikely that AHP legislation will be considered early this year. When the Senate does consider the issue, Sen. Enzi s bill will be the starting point for AHP provisions.
You Drink and Drive. You Lose. As the Department of Transportation (DOT) undergoes many personnel changes, the National Highway Traffic Safety Administration (NHTSA) will review the You Drink and Drive. You Lose. campaign in 2006.
Over the past year, NHTSA has toyed with the idea of launching a new anti-drunk driving campaign. And with the opportunity to create a less prohibitionist message, several alcohol groups have begun to submit suggestions for alternate campaigns.
In addition, the Government Accountability Office (GAO) has scheduled an audit of the DOT later this year, partially due to slowed progress in the reduction of alcohol-related traffic fatalities. The lack of progress over the last few years is especially interesting considering it coincides with the passage of a national .08 percent BAC level (legislation NHTSA supported heavily).
With the audit pending, review of the department s current campaigns may be postponed. Regardless of any internal changes this year, NHTSA can be expected to launch the You Drink and Drive. You Lose. campaign during the summer months.
ID Verification Devices Last year, House Judiciary Chairman James Sensenbrenner (R-WI) drafted legislation that would ultimately set up state mandates for the use of Electronic Age Verification (EAV) devices to counter the use of false IDs and underage drinking.
Although many individual retailers may already employ aggressive age-verification policies, the mandated use of EAVs imposes a further burden on alcohol retailers. Furthermore, the draft bill (as written) did not provide an affirmative defense by eliminating potential liability of alcohol retailers.
While Sensenbrenner did not formally introduce this bill last session, he may still introduce this or similar legislation this year. However, with Congress debating the reauthorization of the Patriot Act and the recent outcry over privacy issues because of White House policies on citizen surveillance, Sensenbrenner s proposal may have difficulty navigating its way through the House.
The EAV legislation would likely require retailers to track beverage purchases, and many Republican members may want to avoid considering a policy that would open up another Big Brother debate during an election year.
CSPI Promoting Drinking Legislation Last year, the STOP Underage Drinking Act (S. 408 and H.R. 864) was reintroduced by Senators DeWine (R-OH) and Dodd (D-CT) and Representatives Roybal-Allard (D-CA), Wolf (R-VA), Wamp (R-TN), DeLauro (D-CT) and Osborne (R-NE).
Right now, the Senate bill has only 18 cosponsors and the House bill has about 70.
According to the anti-alcohol Center for Science in the Public interest (CSPI), This bill provides a launching pad for the eventual implementation of many of the recommendations of the National Academy of Sciences Institute of Medicine s September 2003 report to Congress.
Although the bill does not overtly focus on retailers, the NAS study included many recommendations that targeted the on- and off-premise community, including higher alcohol taxes, ID checks/stings, stricter dram shop liability and roadblock use.
While proponents of this bill will probably focus on co-sponsorship, members of the beverage community will continue to work on limiting Congressional support of the STOP legislation.
Direct Shipping Still State-Level The Supreme Court s decision on the shipping of alcohol last year triggered some changes in the direct shipping laws, but only at the state level.
While the ruling respected wholesalers and the three-tier system, it now prevents states from treating in-state beverage shipments differently from out of state shipments. For example, if a state prevents an out-of-state winery to sell over the internet directly to consumers, then the state must also prevent that activity for in-state wineries.
At this point, there has been no indication that the wholesaler community will push for legislation that would federalize the direct shipment laws and implement a one-size-fits-all policy.
Both sides of the debate now focus on state shipping laws, with proponents of direct shipment (usually the wine companies) attempting to liberalize the sale of alcohol and proponents of the three-tier system (the wholesaler community and, in some cases, retailers who would lose sales) fighting new laws that would allow consumers to by-pass wholesalers and obtain wine directly from the supplier.
Beverage Taxes Roll-Back Unlikely Although several alcohol tax cuts and repeals have been introduced in recent years, neither the House nor the Senate has given serious consideration to any of these proposals.
As in the past, both chambers can be expected to introduce legislation to reset the beer tax rates to the pre-1991 level, but it is again unlikely that these bills will see the light of day.
Death Tax Talks Resume Earlier this month, Sen. Jon Kyl (R-AZ) announced that he would urge his colleagues to re-consider repealing the estate tax in the spring. Sen. Kyl has since been in talks with the American Farm Bureau Federations to create an estate tax proposal that might be more palatable to wavering legislators. Among the proposals is a $10 million threshold before an estate would be affected by the death tax.
As you know, the bill to permanently repeal the death tax passed in the House only to stall in the Senate. Opponents of the tax repeal have labeled it a tax break for the wealthy to hold off final passage of a permanent repeal. However, legislators that have been on the fence with this issue may be tempted to support compromise legislation.
States May Pick Up Minimum Wage Fight As you know, the federal minimum wage has been frozen at $5.15 for the past nine years. And although Sen. Ted Kennedy (D-MA) has repeatedly introduced legislation to increase the federal wage floor, none of his proposals have garnered enough support to pass out of the Senate.
Although Sen. Kennedy is expected to push his current minimum wage proposal ($7.25 an hour) again this year, many states have opted to consider their own wage hikes.
Currently, 17 states are considering legislation to increase their minimum wage. The rates are increasingly high, ranging from $6.15 to $8.25.
Arizona $7.00'; indexed to inflation
California $7.75'; indexed to inflation
Delaware $7.15
Indiana $7.15
Iowa $6.65
Kentucky $6.50
Maine $7.00
Massachusetts $8.25'; indexed to inflation
Missouri indexed to inflation
New Jersey set at 30 percent average wage rate
New Mexico $7.50'; indexed to inflation
Oklahoma $6.15
Pennsylvania $6.25
Rhode Island $7.40'; indexed to inflation (separate bills)
South Dakota $6.25
Utah $7.00
Additionally, labor activists in several states are currently collecting signatures for a number of minimum wage ballot initiatives for the 2006 election. Campaigns are under way in Arkansas, Arizona, California, Colorado, Michigan, Montana, Nevada and Ohio.
Source: American Beverage Licensees Leader, March, 2006, published monthly by Continental Communications, 800-406-5698, 125 W. Granite St., Suite 102, Butte, MT 59701.