September 2013
Federal
Government Shutdown
On
October 1, the federal government partially shut down following a lapse of
appropriations from Congress. In order to fund the federal government, and
because Congress has yet to pass a formally adopted budget in years, Congress
has been passing short-term stopgap spending measures, known as continuing
resolutions (CR). Congress failed to come to an agreement on September 30 and
the most recent CR expired. Both chambers continue negotiations but continue to
hold a series of back-and-forth votes which each respective Chamber rejects.
The House has sent several CR’s to the Senate that contain funding solutions
but also contain restrictions and defunding of the Affordable Care Act, which
are non-starters with in the Senate and the White House. As of Wednesday,
October 02, 2013, the House was considering a series of votes to partially fund
the Veterans Administration, local funding for Washington, D.C. and also would
open back up National Parks and Museums. We expect further resolution to be
considered before week’s end.
As
a result of the shutdown, many federal works have been furloughed but most of
the federal agencies have seen little to no disruption in service to date.
Although the USDA is furloughing a portion of their workforce, the Food Safety
Inspection Service and the Agricultural Marketing Service Programs are
deemed as “essential” federal employees and will not be furloughed, thus
continuing to offer those services to the industry.
Farm Bill
Update
The House voted and passed the Nutrition
Reform and Work Opportunity Act (H.R. 3102) by a slim vote of 217-210 on
September. In what was a win for conservative Republicans, the measure cut’s
the Supplemental Food Assistance Program (SNAP), commonly referred to as food
stamps, by nearly $4 billion a year over the next 10 years. This equates to a 5
percent reduction to the nation’s main food assistance feeding program.
Also included into the bill is a 3 year
authorization as opposed to the normal 5-year farm bill authorization and
allows states to put broad new work requirements in place for many food stamp
recipients and to test applicants for drugs. Lastly it would end government
waivers that have allowed able-bodied adults without dependents to receive food
stamps indefinitely.
The legislation is the latest effort by the
House to finish work on a comprehensive farm bill before the September 30
deadline. A comprehensive farm bill, one which historically includes both farm
programs and food stamps, was defeated on the House floor in June causing
Republican leaders to split the farm bill in two and pass only a version that
includes farm programs in July. H.R. 3102 only contains food stamp
assistance and is the result of the leadership’s goal of deeper cuts.
While this latest vote is encouraging news,
many deem these new food stamp cuts as a non-starter with the Senate. The House
will need to hold one more procedural vote to allow both the farm and food
stamp bills to go to a House-Senate conference together. As mentioned above,
once bills get to conference, it remains a steep upheld battle to iron out the
differences between the House and Senate versions as the Senate version cut
about $4 billion over the same 10 year period and the Obama administration has
already issued a veto threat against the House bill.
Healthcare
Employer
Mandate Delayed
The Obama Administration announced on
Tuesday, July 2 that implementation of the highly contentious "employer
mandate" provisions of the Affordable Care Act will be delayed until 2015.
As you may recall, the employer mandate calls for businesses with 50 or more
full-time/full-time equivalent workers to provide affordable quality insurance
to workers, or pay a $2,000 fine per employee.
This is temporary good news for frankly all
employers who are scrambling to comply with healthcare reform's deadlines and
staffing ratios. The Administration is still encouraging all employers to
voluntarily begin implementing the employer mandate in 2014, however it will
not be enforced with penalties until 2015. Please refer to the actual White
House blog at www.whitehouse.gov/blog/2013/07/02/we-re-listening-businesses-about-health-care-law.
While this is a positive development, it is
by no means the end of the Affordable Care Act, a.k.a. Obamacare, or its
related provisions. Rather than a January 1, 2014 date for compliance, you now
have until January 1, 2015.
Bills
Introduced to Change ACA’s Full-Time Definition
Similar legislation was introduced in both
the US House of Representatives and the US Senate that would change the
Affordable Care Act’s (ACA) full-time employee (FTE) definition from 30
hours/week to 40 hours/week. The House bill, H.R. 2575 has been introduced by
Reps. Todd Young (R-IN), Mike Kelly (R-PA), Pete Olson (R-TX) and many others.
The Senate bill, S.1188, similar but not a companion to the House legislation,
was introduced a few weeks before and sponsored by Senators Susan Collins
(R-ME) and Joe Donnelly (D-IN). Various industry groups have come out in the
support of these bills and much optimism remains that we will see some movement
on one or both of these pieces of legislation.
TRADE
AND REGULATORY ISSUES
USDA Increases Fees
for Voluntary Federal Dairy Grading
At
the end of June, the United States Department of Agriculture (USDA) released a
final rule for a two-stage increase of the fees issued for voluntary federal
dairy grading and inspections services. The first stage was a 10 percent
increase that went into effect in August, and the second stage will see an
additional 10 percent increase in February 2014. According to the USDA the fees
are being raised to cover increasing costs associated with inspectors. See below
for the changes in fees.
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