May 2020 WASHINGTON REPORT
The U.S. economy continues strain under the weight of increasing unemployment and the stagnant stock market. The Department of Labor announced this week’s new claims for unemployment insurance were nearly three million, bringing the total unemployment rate to roughly ten percent of the population. To begin the economic recovery process, more than 40 states allowed businesses to reopen with limited capacity and/or hours, ranging from dine-in restaurants to non-essential manufacturing. State contingency plans, including how to respond to significant case spikes, vary widely.
New threats to the food supply chain emerged in recent weeks, even as President Donald Trump invoked the Defense Production Act to keep meat and poultry plants open in the wake of widespread workforce outbreaks. To mitigate potential interruption of other ingredient supplies, IBA and the Food & Beverage Issue Alliance maintain a weekly dialogue with supply chain and food safety experts at the U.S. Department of Agriculture and the Food & Drug Administration. We encourage all IBA members to continue to check the COVID-19 Bakers Resource Portal and contact Nick Pyle (firstname.lastname@example.org; 703-585-0855) or Andrea Hart (email@example.com; 540-810-5770) to report supply chain concerns.
In Washington, all eyes are on members of Congress—whose eyes are on their computer screens. Citing a self-quarantine directive for Health, Education, Labor & Pension Committee Chairman Lamar Alexander (R-TN), the first-ever virtual Senate hearing took place this week to commence the upper chamber’s shift into “phase four” COVID-19 response legislation. Though House Speaker Nancy Pelosi (D-CA) will hold a vote on the most partisan bill of the pandemic era today, Senate Majority Leader Mitch McConnell (R-KY) instead elected to perform an in-depth review of the implementation of the CARES Act before putting pen to paper on phase four. As that process is still ongoing, a Senate counter to the Democrat-backed House bill will likely not emerge until after the Memorial Day recess. Read on to learn more details about IBA’s efforts during phase four.
IBA’s government relations team remains virtual during Washington’s stay-at-home period, through June 8. We are preparing the association’s first virtual Annual Meeting, a webinar series open to all IBA members and prospective members. Read the full invitation and access your FREE registration link below.
IBA TO HOST FIRST VIRTUAL ANNUAL CONVENTION
IBA is excited to announce our very first Virtual Annual Meeting! We will host a series of policy webinars with guest experts and members of Congress. The virtual format will allow IBA members to attend remotely and avoid travel. It will also create a more inclusive event, giving members who haven't yet attended IBA's annual convention the opportunity to join in.
Thanks to the support of our 2020 sponsors, registration for the event is FREE for all active and prospective IBA members.
The webinar series will be the afternoons of Tues-Thurs, June 16-18. Topics include:
Online Retail: Benefits & Hurdles; by the Food Marketing Institute
BE Food Disclosure Rule Implementation Update; by USDA's Ag Marketing Service
Wheat Checkoff Marketing Update; by the Grain Foods Foundation
BakePAC Presents: COVID-19 impact on 2020 Elections
Congressional Roundtable w/ 2020 Denk Award Recipients Congressmen Chuck Fleischmann (R-TN) and Josh Gottheimer (D-NJ)
IBA Executive Committee and Association Business Sessions
ACCESS THE LATEST COVID-19 RESOURCES
Though President Donald Trump signed emergency legislation to supplement the CARES Act, smaller businesses still face economic uncertainty. Banks predict extra PPP funds will be exhausted within a few days and states are already calling for more funding to implement widespread diagnostic and antibody testing--a crucial step before fully reopening America's Main Streets. If your company has been unable to secure PPP funding despite applying, please contact IBA President Nick Pyle.
Manufacturers are reporting confusion about another CARES Act provision-a business tax credit for employee retention. A for-profit business or tax-exempt organization can claim a refundable payroll tax credit of up to $5,000 per employee for wages paid between March 12 and December 31, 2020, but only for wages paid during a calendar quarter in which the business is either: 1) shut down by government order, or 2) experiencing a large drop in year-over-year gross receipts.
The credit may be offset in advance against anticipated payroll tax deposits, leaving more cash in the hands of the business throughout the remainder of 2020. Though the IRS provides ongoing guidance, businesses report hurdles in applying for and implementing the credit. Food industry advocates and other pro-business groups are urging Congress to address the situation in its next COVID-19 response legislation.
The following agency resources are now available:
IBA SHARES COVID RESPONSE LEGISLATIVE PRIORITIES WITH CONGRESS
The Independent Bakers Association shared its top legislative priorities with staff of more than 50 House and Senate offices. The four recommendations in the outline stem from consensus among those on IBA's April telemeeting as well as direct input from several IBA member-companies.
Notably, IBA highlighted the need for Congress to address a brewing onslaught of abusive and nonviable lawsuits related to COVID-19. IBA joined the U.S. Chamber of Commerce, the National Association of Manufacturers and nearly 300 other national and state advocacy groups to urge congressional leaders to create targeted liability protections for essential businesses.
In a stakeholder letter, the group proposes a safe harbor for businesses that continued to operate throughout the pandemic and worked diligently to follow all federal, state and local guidance on how to prevent the spread of COVID-19. Such legislation would acknowledge that the ever-evolving patchwork of available advice and best-practices combine to make identifying a clear standard of due care nearly impossible during a national emergency. It would also recognize that abusive, nonviable lawsuits potentially threaten the overall recovery of America's economy, as many businesses simply will not be able to face the threat of frivolous litigation compounded with the already crippling financial burden caused by the pandemic.
Senate Majority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarthy (D-CA) recently stated they are unified in support of some level of liability protection in the next response bill.
IBA will discuss the legislative and regulatory outlook in detail at our virtual Annual Convention in June. Learn more.
IBA SPRING TELECONFERENCE - MEETING REPORT
The Independent Bakers Association held its annual Spring Membership Meeting via teleconference on Tuesday, April 21, 2020. Hearing a quorum of members present, IBA Chair Dan Mulloy of 151 Foods called the meeting to order at 1:30 pm EDT. Attendees introduced themselves and shared their location.
IBA’s Executive Committee session began with Treasurer Ron Tremayne of AB Mauri presenting the 2019 financial report to the group for review. Secretary Chris Mulloy of Omni Baking Co. then presented the minutes from IBA’s Fall Business Meeting during IBIE. The Executive Committee voted to approve the minutes as read.
The Executive Committee then considered nominees for the annual Horst G. Denk Legislative Service Award, which goes to a member of the U.S. House of Representatives this year. The Republican and Democratic nominees are Congressmen Chuck Fleischmann (R-TN) and Josh Gottheimer (D-NJ), respectively. Congressman Fleischmann is a champion of food industry issues, including sugar reform and protecting independent contractor status. He is on the House Appropriations Committee, which oversees agency funding. He spoke at IBA’s 2017 Annual Meeting in Washington, DC. Congressman Gottheimer serves on the powerful Financial Services Committee and also co-Chairs the bipartisan Problem Solvers Caucus. Problem Solvers is an effective group of moderates who focus on civility and compromise on issues like healthcare and infrastructure. He cosponsored the 2018 sugar reform bill.
The alternate nominees are Representatives Ann Wagner (R-MO) and Brendan Boyle (D-PA). Congresswoman Wagner is one of only 13 Republican women in the 116th Congress and serves on the Financial Services and Foreign Affairs Committees. As a known proponent of regulatory reform, she cosponsored the sugar reform bill during the 2018 Farm Bill. Congressman Boyle is on the Ways & Means and Budget Committees. He is in the moderate “New Dem” caucus and manufacturing caucus. He also cosponsored the 2018 sugar reform bill.
The Executive Committee voted to approve the slate of nominees and directed IBA staff to move forward with announcing the Denk Award recipients.
Finally, the Executive Committee led a discussion on how to proceed with IBA’s 46th Annual Convention, scheduled for June 16-17, 2020 in Washington, DC. IBA General Counsel Andrea Hart reported that the host venue, the Courtyard Capitol Hill, confirmed it would release IBA from its hotel room and meeting space contracts if needed. IBA President Nick Pyle queried whether those on the phone or other company representatives would feel comfortable traveling to Washington to attend in person. The group concluded that increased demand for IBA members to be present at their own facilities and ongoing uncertainty related to traveling would persist through June. Board members on the call voted that IBA hold its first ever virtual annual meeting—consisting of guest speaker webinars and association business—over the course of the scheduled week in June. The group tabled discussion about whether to proceed as planned with the Fall Breakfast Meeting at PACK Expo on November 10 in Chicago.
The Association Business session began with Andrea Hart reporting on IBA’s work in Washington related to COVID-19 and our ongoing policy initiatives. Below are details:
Institutional and food service bakers can email firstname.lastname@example.org to arrange sale of products to USDA for use in emergency food assistance programs. Please report supply chain concerns to IBA.
FDA offered two instances of regulatory accommodation: 1) An extension of enforcement discretion for the NFP rule and 2) a regulatory pathway for manufacturers to label and sell food service inventories to retailers.
IBA Policy Initiatives
After successfully quashing a bill to alter worker classification standards and diminish independent contractor status in New Jersey, IBA continues boots-on-the-ground efforts in the state and in New York.
IBA submitted comment in support of the proposed flexibilities for school meals. Last week, a federal court in Maryland struck down USDA’s 2018 rule which provided flexibility for three aspects of school meals—sodium reduction, whole grains, flavored milk—citing the agency did not follow proper administrative procedure. USDA announced it would appeal the ruling. Though the ruling has no effect on the current proposed rule, it is a snare in Secretary of Agriculture Sonny Perdue’s regulatory reform agenda.
IBA and the Food & Beverage Issue Alliance requested a one-year extension of the compliance deadline for the National Bioengineered Food Disclosure regulation. The current deadline is January 1, 2022.
Nick Pyle presented the following update on the 2020 elections:
Republicans face battles in both chambers this cycle. In the Senate, they must defend 23 seats to hold the majority. Four key races could decide the outcome: Colorado, Maine, Arizona and North Carolina. Senator Thom Tillis (R-NC) is down seven points; the other three races currently lean Democratic. Republicans have possible take-away wins in Alabama, Michigan and Montana.
Republicans in the House must flip a minimum 18 seats to win a majority. Lackluster fundraising and candidate recruitment hamper the takeover effort. In the 30 most “competitive” districts, Democrat incumbents each banked over $2 million to fend of challenges. IBA will focus efforts on open Republican districts in Texas (TX 22,23 &24) and few challenge races like Chairman Collin Peterson (D-MN) of the House Agriculture Committee and Congresswoman Abigail Spanberger (D-VA-7).
Dan Mulloy then opened up the floor for open discussion on baking issues. The group discussed how they’ve implemented precautions and responded to positive COVID-19 cases at their facilities. Connie Vaughan of McKee Foods inquired whether other callers were able to maintain sufficient supplies of masks, gloves, hand sanitizer and soap. Scott Barth of Barth Packaging mentioned a baking industry allied businesses is making non-medical protective masks for use by manufacturers. The group also discussed the probability of a vaccine in 2021. Bohn Popp of Aunt Millie’s shared that the Grain Foods Foundation continues to prepare for a wheat check-off.
Dan Mulloy called the meeting adjourned at 2:05 pm.
IBA THANKS OUR MEETING SPONSORS
AB Mauri Ilapak
American Yeast Sales Kincannon & Reed
AMF Bakery Systems King's Hawaiian
Amoroso Baking Co. Kontos Foods
Ardent Mills Kuhl Corporation
Aunt Millie’s Bakeries Kwik Lok
Barth Packaging Lesaffre
Bundy Baking Solutions Manildra USA
Burford Corporation Maple Donuts
Cain Food Industries North Dakota Mill
Capitol Food Company Pan-O-Gold Baking Co.
Cellone’s Bakery Quality Bakers Inc.
Corbion Siemer Milling
Dawn Foods SPF Plastic Group
Dunbar Systems Uptown Bakers
EFCO Corporation West Essex Graphics
DIETARY GUIDELINES COMMITTEE ANNOUNCES DELAY IN PROCESS
The 2020 Dietary Guidelines Advisory Committee announced its schedule is extended by one month, in consideration of new demands on Committee members’ schedules due to COVID-19. The Committee will present its draft report in a webinar on June 8. The draft report is subject to public comment and revision, then it is submitted to HHS and USDA as the basis for the 2020-25 Dietary Guidelines for Americans. IBA will submit comment as part of the Grain Chain coalition.
Though the Dietary Guidelines page on USDA's website still asserts December 2020 as the goal for having the final Guidelines out, publication in 2020 is unlikely to happen. The most recent cycle’s final were published in January 2016. The Committee's selection and review process started significantly later this cycle--likely because of the presidential administration change. Though the agencies worked to save time over the course of 2019 by having only five public meetings instead of seven, the COVID-19 pandemic effectively slowed their progress. IBA anticipates final Dietary Guidelines Publication in March or April 2021.
FBIA MEETS TO REVIEW ONGOING REGULATORY PROJECTS
Working Groups of the Food & Beverage Issue Alliance met this week to strategize for COVID-19 relief and other regulatory projects. Member-associations discussed ongoing implementation hurdles for the National Bioengineered (BE) Disclosure Standard. USDA’s Ag Marketing Service is expected to update its implementation FAQ page soon with further guidance on the placement of the QR code and disclaimer.
FBIA sent a letter to USDA Secretary Sonny Perdue requesting a one-year extension to the compliance date as the food industry focuses efforts on responding to the COVID-19 pandemic. On top of disruption as a result of COVID-19, FBIA noted that there are still pending AMS guidance documents and outstanding technical implementation questions that vital to ensuring compliance. USDA's Ag Marketing Service recently alerted FBIA leaders that more specific information is needed to bolster our extension request. Thank you to those IBA members who provided examples to be used in FBIA’s outreach.
In addition, FBIA reviewed the status of FDA’s enforcement policies related to oversight inspections. Commissioner Stephen Hahn announced he will continue to pause unannounced inspections, excluding “mission critical” inspections which will be pre-scheduled. FBIA member-associations reported an ongoing patchwork of inspection policies for state food safety agencies, ranging from unannounced on-site inspections to “virtual” inspections via document requests. FBIA will continue to serve as a liaison for associations to reach federal regulators throughout the pandemic. Please contact Andrea Hart with any questions or concerns.