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NOVEMBER 2019 WASHINGTON REPORT

After notably high turnout on Election Day in Mississippi, Kentucky and Virginia, Congress and President Donald Trump are keenly aware that voters are tuning in to their every move.  In an election viewed widely as a referendum on the president, both chambers of the Virginia legislature flipped, granting Democrats their first “trifecta” of control since 1993.  Kentucky’s Republican governor Matt Bevins faced statewide backlash after quarreling with the Teacher’s Union last year, which inevitably cost him reelection—though only by 0.3% of the vote.
 
On Capitol Hill, the House Intelligence Committee’s public impeachment hearings come at a time when Congress usually tends to its unfinished business.   Though recent polling shows more than 80% of Americans are less than “a little bit” likely to change their opinion about President Trump’s impeachability based on the public hearings, Committee Chairman Adam Schiff (D-CA) proceeded with re-interviewing half a dozen former administration officials and career diplomats.  
 
The House’s impeachment activity successfully halted any forward progress on the remaining appropriations bills which were on track for Senate consideration.  Perennial murmurs of a government shutdown grew to panicky shouts, until Appropriations Committee Chairwoman Nita Lowey (D-NY) and her Senate counterpart Richard Shelby (R-AL) announced an extension through the last legislative day of the 2019.  Read more on the appropriations prognosis later in this report.
 
The impeachment hearings are also showing the gravity of their impact on the Democratic presidential primary races.  If a Senate trial drags deep into 2020, the six sitting Democratic Senators in the race for the party’s presidential nomination will be required to stay in Washington during peak campaign season.  Some GOP insiders are privately discussing whether to pressure Senate Majority Leader Mitch McConnell (R-KY) to stage the impeachment trial in January. 
 
While some Republicans favor a lengthy trial as a means of defending President Trump and creating problems for Democrats, others call for swift dismissal or final vote.  Centrist candidates Pete Buttigieg and former Vice President Joe Biden would seemingly benefit most from keeping the other front-runners Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) stuck in the Senate.  
 
While the partisan war on Capitol Hill wages, IBA continues to focus its efforts on bolstering the Trump administration’s regulatory reform efforts, which span nearly every federal agency.  Read on to learn of the ongoing dialogue between IBA, its allies and regulators on issues ranging from child nutrition to food safety.
 

 

IBA MEETS WITH USDA TO DISCUSS ADDING FLEXIBILITY TO CHILD NUTRITION PROGRAMS

 
IBA and U.S. Department of Agriculture (USDA) Deputy Undersecretary for Food, Nutrition & Consumer Services, Brandon Lipps, met this week to discuss ways to further the agency's regulatory reform initiative by adding flexibility to child nutrition programs.  Specifically, IBA renewed its ongoing calls for USDA's Food & Nutrition Service to review the ban on reimbursement for "grain-based desserts" served in the Child & Adult Care Food Program (CACFP).  CACFP includes child and adult daycare centers, participating in-home daycare and on-site pre-Kindergarten at elementary schools. 
 
IBA also submitted an updated comment letter to USDA's online regulatory reform docket, which is open for all stakeholders to help the agency identify rules to rescind or revise, as directed by President Donald Trump.  IBA is committed to working with regulators to reduce costly red tape and ensure IBA members can continue to supply delicious baked goods to CACFP and other child nutrition programs.
 

 

FDA ALERTS FOOD INDUSTRY OF ENFORCEMENT DISCRETION PERIOD FOR NFP COMPLIANCE

 
On October 23, representatives from the U.S. Food & Drug Administration (FDA) alerted IBA and other food advocacy groups that it will implement a six-month period of enforcement discretion as it reviews compliance with the Nutrition Facts Panel (NFP) final rule.  FDA's announcement comes in response to much stakeholder outreach, including a September letter from the Food & Beverage Issue Alliance, regarding the January 1, 2020 deadline.
 
In the letter, IBA and other FBIA members requested an enforcement discretion period so that manufacturers could finish using the last of their existing packaging in the few months after the compliance deadline.  The letter also cited the notable delay of several final guidance documents necessary to comply with the rule.
 
FDA's NFP Industry Resources webpage now includes the following:
 
I understand that FDA has received multiple requests from manufacturers to provide additional time to comply with the new requirements.  Do I still have to meet the January 1, 2020, compliance date?
 
The FDA has heard from several manufacturers and groups that more time may be needed to meet all of the requirements. Therefore, during the first 6 months following the January 1, 2020, compliance date, FDA plans to work cooperatively with manufacturers to meet the new Nutrition Facts label requirements and will not focus on enforcement actions regarding these requirements during that time.
 

 

ACTION ALERT: TELL CONGRESS TO VOTE “NO” ON UNION WISH-LIST BILL

 
Last month, the House Education & Labor Committee advanced a sweeping pro-labor union bill, the Protecting the Right to Organize (PRO) Act.  Committee Chairman Bobby Scott (D-VA) is adamant about putting the bill, which is cosponsored by all by 20 of the 234 House Democrats, to a full-chamber vote this as soon as possible.  In support of his effort, union organizers are working in overdrive to push the House to make their “wish list” come true.

The PRO Act, introduced by Chairman Scott early in the 116th Congress, has a multitude of provisions designed to strengthen unions and their organizers, regardless of the negative side effects on employees or businesses.  Some of the bill’s most troubling provisions would:

 

  • Repeal 27 existing state “right-to-work” laws and preemption of future similar laws.  Right-to-work states prevent unions from charging non-member employees a fee for the “benefit” the employee might indirectly receive from the union’s work.

  • Repeal the National Labor Relations Board (NLRB) secret ballot procedural rules.  To create a union, a public, on-site sign up tally would be all organizers need.  The current closed vote facilitated by NLRB—in place to protect employee privacy and prevent duress by organizers—would be upended.

  • Introduce the destructive “outside the usual course of business” provision to the NLRA definition of “employee.”  The proposed standard would reclassify thousands of bona fide independent contractors as employees almost overnight—regardless of their desire to work as independent contractors and be their own boss.  Only contractors retained to perform tasks “outside the usual course of” a business’ activities would qualify.  This standard, recently implemented in California, tasks courts with determining what a business’ “usual” activities are—rather than the business itself.   

  • Codify a broad standard for determining who is a “joint employer” under the National Labor Relations Act (NLRA).  This standard was first applied in the 2015 NLRB case Browning-Ferris and recently rescinded by the Trump Administration, deeming it to be a drastic divergence from NLRB precedent.  Under the vague new standard, an employer could be held liable for employees it does not actually employ simply by having an “influence” over their terms and conditions of employment.

 
ACTION ALERT:  IBA members, now is the time to tell your member of Congress to vote “NO” on the PRO Act when it comes to a vote.  Access your representative’s constituent contact form using by entering your zip code here.  Use the following template as a guide:
 
“Congressman/woman XX, as an owner/operator of a locally-owned, independent wholesale bakery, name of company in town, state, I urge you to vote “NO” on the PRO Act, HR 2474.  The bill forsakes the rights and interests of employees and employers in favor of Big Unions.  The bill undermines the sovereignty of the 27 states who duly implemented right-to-work laws.  The bill disregards the realities of the working within the current and future economy, which includes independent contractors and gig workers. 

As an employer in the manufacturing sector, I provide a fair, positive environment for my employees to grow their careers as skilled workers.  I’m proud to be a small/midsize independent business owner in your district.  I encourage you to consider the perspective of me and my employees, and vote “NO” on HR 2474.  Thank you.” 
 
IBA is also available to hand-deliver your message as a constituent letter to your member of Congress.  Contact Andrea Hart or Nick Pyle for details.
 

 

FEDERAL COURT VOIDS 2017 U.S.-MEXICO SUGAR SUSPENSION AGREEMENTS

 
The U.S. Court of International Trade in New York vacated two components of a 2017 sugar suspension agreement with Mexico, ruling the department failed to properly record and make public all of its meetings and communications. 
 
The ruling is a victory for Plaintiff CSC Sugar, a refiner and trader of raw and refined sugar based in New Canaan, Connecticut.  It is a loss for U.S. sugar producers who pushed for the protectionist agreement.
 
After tense negotiations among sugar producers, users and lawmakers from both countries, the 2017 standards replaced those in an existing suspension agreement implemented in 2014.  The Court agreed that both the countervailing duties and anti-dumping duties amendments caused substantial harm to CSC because of the Commerce Department's failure to keep sufficient public records of its ex parte dealings with the most powerful producers in the Big Sugar industry. 


The ruling brings relief to bakers by lowering sugar costs in the coming months, as the two countries resume trade under the 2014 agreement.  That deal prescribes:

  • Sugar imports from Mexico must maintain a refined/raw ratio of 53%/47%.

  • The polarity of refined sugar must be 99.5 or higher.

  • Reference prices for refined sugar sold into the U.S. market are 26 cents/lb and 22.25 cents/lb for raw.

The 2017 amendments reduced the allowance of Mexican refined sugar imports, lowered the polarity of refined sugar to 99.2 and raised the reference prices for refined and raw sugar.  This resulted in more raw imports to be processed by U.S. refineries and less refined imports to be traded by companies like CSC, who do little further refining before supplying to bakers, confectioners and beverage-makers.
 
IBA anticipates Big Sugar, through its lobbying group, the American Sugar Alliance, will continue to insert itself in any attempt to renegotiate a suspension agreement.  After the ruling was announced, IBA immediately notified Commerce Undersecretary for International Trade Diane Farrell of the Association’s interest in having any new negotiations be fair and open to all American stakeholders.  IBA and others in the Alliance for Fair Sugar Policy will continue to engage the Trump Administration, including leaders in the White House Office of Public Liaison and Chief Agricultural Trade Negotiator Gregg Doud, a longtime ally of food manufacturers. 
 

 

CONGRESS SLOGS THROUGH APPROPRIATIONS, WILL EXTEND NOVEMBER 21 DEADLINE

 
After receiving all but two House-backed FY2020 appropriations packages last month, the Senate took a first step toward advancing some government funding.  The upper chamber passed a bipartisan package of bills that would pay for the operations of the Departments of Agriculture, Transportation and Interior.  House and Senate versions of the "minibus" appropriations bills will need to be reconciled by a joint conference committee before they can go before President Donald Trump. 

Within hours, the Senate voted down an even larger minibus--covering the Departments of Labor, Health & Human Services, Education, Defense, State, and Energy & Water.   The failed vote highlighted serious partisan disputes latent in the majority of federal spending.  Recent Treasury Department data shows that the national debt hit a new record high, surpassing $23 trillion, with about $3 trillion of that coming in the last 22 months. The push to decease federal spending in recent years continues to clash with policy priorities like President Trump's border wall and healthcare. 

House Republicans are vocal in opposition to a full-year continuing resolution (CR) to fund the Department of Defense--an idea floated after the failed Senate vote.  In a statement, Mac Thornberry (R-TX), Kay Granger (R-TX) and Steve Womack (R-AR)—top Republicans on the Armed Services, Budget and Appropriations committees, respectively—urged the adoption of comprehensive defense funding legislation and outlined the potential damage of a full-year CR.  Temporary funding plagued the Pentagon in recent years.

Current government funding lasts through November 21 and congressional leaders agree another short-term funding fix will be needed as appropriations talks stretch on.  Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Nancy Pelosi (D-CA) agree that the next CR shouldn't go beyond December 31, a deadline meant to pressure negotiators to finish all 12 spending bills before the end of the calendar year.  President Trump--who hinted this week he'd like to see a final compromise include suspension of the House's impeachment investigation--would have to sign off on any CR.  Some in the Capitol assert Congress would be able to override a possible veto of a spending bill.
 
Yesterday, House Appropriations Chairwoman Nita Lowey (D-NY) confirmed she will take up the stopgap spending bill next week, punting the funding deadline to December 20.  The White House’s top liaison to Congress, Eric Ueland, said the White House would support the 29-day extension so long as it doesn’t include language to impede the president’s ongoing effort to shift portions of DOD’s budget to fund the border wall.  
 

 

FDA EXTENDS FSMA ENFORCEMENT DISCRETION FOR CO-MANUFACTURERS AFTER FBIA LETTER

 
Last week, the U.S. Food & Drug Administration (FDA) announced it will continue its enforcement discretion policy for compliance with certain FDA Food Safety Modernization Act (FSMA) supply-chain program requirements applicable to receiving facilities that are co-manufacturers.  The previous enforcement discretion period ended November 6.
 
Since the publication of the first FSMA rules in 2017, IBA and others in the Food & Beverage Issue Alliance expressed concerns that some supply chain requirements conflict with existing contracts between brand owners and the firms the brand owners select to supply their co-manufacturers.  To comply with the supply-chain program requirements, co-manufacturers often need detailed information about suppliers that only the brand owner has, and that cannot be shared because of confidentiality clauses in the contracts between brand owners and the co-manufacturers’ suppliers.  The two-year enforcement discretion period gave brand owners more time to work with suppliers to adjust contracts so that supply-chain related information could be shared with co-manufacturers.
 
FDA states it will continue its enforcement discretion policy while advancing its work with stakeholders to better understand these challenges and to consider possible solutions to address these situations.  The agency will give more details on the duration of the enforcement discretion period in a forthcoming publication in the Federal Register.
 

 

DIETARY GUIDELINES COMMITTEE HOLDS ITS THIRD PUBLIC MEETING

 
The third meeting of the Dietary Guidelines Advisory Committee (DGAC) was held October 24-25, 2019 in Washington, DC.  IBA and other stakeholders joined by webinar and in person to engage with the committee to review two key issues:

  • Progress on the 40 research protocols updated based on discussions and public comments received at the July meeting.

  • Plans for the 19 additional research protocols developed since the July meeting.

Over 200,000 research articles have been screened to date for the protocols.  For nutrient intakes and dietary pattern assessments, the DGAC will be comparing NHANES data from 2015-2016 with NHANES data collected in 2005-2006. 

Given that the 59 research protocols are predominantly in the development or implementation stages, there were only two draft findings or conclusions to report.  First, the Dietary Patterns Subcommittee announced no evidence is available to draw a conclusion about the relationship between maternal seafood intake during pregnancy and lactation and academic performance, anxiety, and depression in children.  Second, the Frequency of Eating Subcommittee announced no evidence is available to draw a conclusion about the relationship between the frequency of eating and all-cause mortality.

Much of the full committee's discussion time was spent tackling how the subcommittees may be more consistent in their definitions and their mechanisms for grading strength of the evidence to support a conclusion statement.  Since the start of the Dietary Guidelines process, the Grain Chain coalition was outspoken in support of more consistency across subcommittees.  For example, during the 2015 review, some subcommittees reviewed studies that defined “carbohydrates” in various ways: some including vegetables and fruits, others including candy.

One way to draw consistency is to elevate studies that identify of macronutrient percentages (e.g., low carb, high fat, high protein diets) as opposed to categorical definitions.  The Grain Chain recommended in its April 2019 comments that if a study doesn’t include the percentages of carbohydrates, fats and proteins in the description or methodology section, that study should be excluded from their scientific review.   

It was apparent that the DGAC clearly heard the Grain Chain’s feedback.  The Dietary Patterns Subcommittee announced that studies that include the percentages will be included in their review, and specifically mentioned that public comments were instrumental in spurring them to make this important change.