DC dawdles and lame duck quacks
In March when it became clear that the coronavirus was going to become a serious threat to the nation's physical and economic health, Congress and the Administration quickly came together to overwhelmingly pass a massive $2 trillion CARES Act that helped millions of American businesses and individuals. Government in action.
In May, knowing that much more aid would be needed, the House passed a $3.4 billion HEROES Act. The Senate did nothing -- for seven months. Now, as Covid is spreading at an alarming rate nationwide and people are suffering financially, Congress and the Administration are locked in disagreements about who should get help. Government inaction.
The current lame duck session has underperformed expectations, which were low to begin with. This week, in the nick of time to avoid a government shutdown, Congress once again kicked the can down the road by passing a "Continuing Resolution" (CR) which maintains current funding levels ... for a week! So next Friday we'll be back in the same position unless they pass a massive omnibus appropriations bill extending through Sept. 30. If not, probably yet another CR. And so on.
And let's not forget the National Defense Authorization Act, traditionally a slam dunk, which the president has threatened to veto if it doesn't include a totally unrelated provision relating to tech company regulations. This bill has no effect on our industry, other than to be yet another distraction from the ones that do.
The Covid 2.0 financial stimulus situation is complicated by too many proposals -- from the House, Senate, White House, and a bipartisan group of Senators. The major sticking points are Covid liability protection which Republicans want and Democrats oppose, and money for state and local governments which Democrats want and Republicans oppose. Meanwhile, many desperately needed measures are stalled while Americans suffer.
So where is our Craft Beverage Modernization and Tax Reform Act in all this? If we're lucky, Congress will come to some agreement on Covid-related funding which will be folded into the larger omnibus package, as will the CBMTRA.
The CBMTRA has 77 Senate cosponsors and 351 in the House, so support is incredibly strong, and a large group of Senators has written to Majority Leader McConnell urging passage. WineAmerica is pushing hard to pass the bill, and recently participated in a final "Day of Action" during which 12,000 wineries and others sent 38,000 emails or texts to their legislators asking for support.
The CBMTRA is vital to the American wine industry, especially at a time when wineries have been financially affected by the Covid crisis. The difference (between the impact of the Small Producer Tax Credit and the CBMTRA) is particularly dramatic for wines with alcohol levels between 14% and 16%. Also, the new rates may be applied to sparkling wines, which were not eligible under the old system. The CBMTRA is a big deal!
Jim Trezise of Penn Yan is president of WineAmerica.