By Stephanie Johnson, NGA VP of Government Relations
This summer was one of the busiest legislative sessions in Congress in recent memory. It culminated in major legislative achievements for the Biden Administration, a lifeline to the sinking popularity of his presidency and much needed momentum for Democrats up for re-election in November. Congress has introduced and passed several bills that could have significant impacts on the independent supermarket industry which we are summarizing below.
Inflation Reduction Act – This $739 billion Inflation Reduction Act (H.R. 5376) makes significant investments in climate change and health care and pays for those investments with changes to the tax code and drug pricing reform.
- Excess Business Loss Limitation – Extends the loss deduction cap for pass-through businesses for an additional two-years through 2027.
- Corporate Minimum Tax – Creates a new 15 percent minimum tax on corporations making over $1 billion in profits.
- Internal Revenue Service (IRS) Enforcement – Increases funding for the IRS to increase enforcement and bring more money into the treasury, thus increasing the likelihood that grocers will face IRS audits.
Health Care Policies
- Drug Pricing Reform – Allows Medicare to negotiate drug prices and caps out of pocket costs at $2,000. Treats pharmacy reimbursement like the Medicare Part D Coverage Gap.
- Extends Affordable Care Act (ACA) Subsidies – Extends the additional ACA subsidies included in COVID relief legislation for three more years.
Energy and Climate Policies
- Clean Energy Incentives – Creates numerous funding pools and tax incentives for clean energy programs. Provides funding for rural communities, farmers, and small business owners like grocers who invest in renewable energy and be more energy efficient. Additionally, there are a host of renewable energy tax incentives, including a $7,500 rebate for new Elective Vehicles and $4,500 for used ones. The policy will spur more demand for EV charging stations in grocery parking lots.
- Additional provisions – Provides funding for climate smart agriculture, forest health, and tax credits for certain domestic manufacturing, and creates fees on some methane emissions.
Credit Card Competition Act – Senators Durbin and Marshall introduced the Credit Card Competition Act (S. 4674). This bipartisan credit card reform bill aims to bring competition to the credit card marketplace and lower acceptance costs for merchants and consumers. The bill requires that credit cards issued by the largest U.S. banks be able to be processed over at least two unaffiliated card payment networks, and that merchants be allowed to decide which to use. The bill’s introduction is a major achievement for NGA and our merchant coalition that has been seeking to reform credit card acceptance as retailers face skyrocketing costs.
Healthy Meals, Healthy Kids Act – The Healthy Meals, Healthy Kids Act (H.R. 8450), also known as child nutrition reauthorization (CNR), was introduced, and passed out of the House Education and Labor Committee on a party line vote. This bill makes changes to the WIC program that will affect the grocery industry including:
- Prohibits interchange and other fees on WIC EBT cards
- Spend forward authority for states to cover some food delivery costs
- Expanded payment options for WIC including online and mobile payments
- $40 million to support retailer modernization efforts
- A reimbursement increase for A50 stores
- Creating a nationwide summer EBT program that provides $75 per child per month
CNR is an important opportunity to make programmatic changes to WIC. CNR is supposed to pass every five years but has not passed since 2010. This bill is a partisan democratic bill meaning it could pass the House but would not pass the Senate. This may be a bill that receives a push during the lame duck session.
CHIPS and Science Act – The House and Senate both passed the CHIPS and Science Act (H.R. 4346), and President Biden has signed it into law. This legislation aims to bolster America’s economic competitiveness with China by investing in domestic semi-conductor manufacturing and other policies to counter the growing Chinese economic threat.
A previous iteration of the bill passed by the Senate included a provision that would require all internet sales of food products to disclose the product’s country of origin, an impossible requirement for grocery e-commerce sales. Fortunately, the final bill dropped the COOL provision after furious lobbying by NGA to strip the harmful and burdensome policy.
American Data Privacy and Protection Act – The House Energy and Commerce Committee voted 53-2 to clear a bipartisan consumer data privacy bill (H.R. 8152), the American Data Privacy and Protection Act (H.R. 8152). The bill is the most significant step towards a federal data privacy law in decades and stands a real chance of becoming law given its bipartisan support. Business groups like NGA have expressed concern about the bill’s private right of action and weak pre-emption of state laws like the California Data Privacy statute. The bill will create new obligations and potential liability concerns for independent grocers. NGA is working through the Main Street Privacy Coalition to address these and other challenges, like extending coverage of the law to financial institutions. Congress has limited runway for additional legislative action after the August recess looming, but the privacy bill could be on the short list for House action this Fall.
House and Senate Agriculture Appropriations – The House and Senate both released their Fiscal Year 2023 spending proposals. SNAP and WIC fall under the agriculture bills which have passed in the House and been released in the Senate. Both bills are similar in nature regarding topline spending for USDA and FDA. The House bill includes language instructing the USDA to “explore measuring the impact of restricting SNAP purchases to measure the impact of limiting certain SNAP purchases on healthy food choices by people participating in SNAP.” This language was not included in the Senate version of the bill and NGA strongly opposed any efforts to restrict the purchases of SNAP customers.
Pharmacy Benefit Manager Transparency Act – The Senate Commerce Committee passed the Pharmacy Benefit Manager Transparency Act (S. 4293). Pharmacy Benefit Managers (PBM), also known as drug middlemen, charge exorbitant fees to both drug manufacturers and pharmacies driving up the cost of drugs for the entire health care system. This bill empowers the FTC to increase drug pricing transparency and hold PBMs accountable for unfair and deceptive practices that drive up the costs of prescription drugs at the expense of consumers.