At a hearing on March 10, members of the House Agricultural Appropriations Subcommittee had high praise for the FDA’s stepped-up food safety enforcement efforts during Commissioner Margaret Hamburg’s tenure. Inspection efforts will undoubtedly increase even further if Congress moves forward with pending food safety legislation. Hamburg thanked the House members for their passage of food safety legislation, and said she hoped that the Senate would follow suit without delay.
Although the Senate version is similar to the House version in some respects, the bills diverge with regard to who should foot the bill for stepped-up inspection efforts. To help pay for inspections, the House measure imposes a flat tax on all food processing facilities, including hundreds of thousands of farms that either minimally process their crops to prepare them for market or that engage in value-added activities. An identical $500 per facility per year tax in the House bill would apply regardless of the size of the operation. The farmer selling a few thousand dollars worth of product to the local coop would thus pay the same as a large multinational corporation with millions in sales.
The Senate bill, in contrast, does not rely on new taxes except for fees to repay the government for costs in food safety corrective actions.
At the House Subcommittee hearing, Chair Rosa DeLauro (D, CT) pressed Commissioner Hamburg to fight for the fee structure set forth in the House’s version of the bill. DeLauro noted that the House version raises $220 million in “user fees” while the Senate version raises only $65 million. Said DeLauro, “we shouldn’t proceed to major food safety reform and then doom it to failure” because of inadequate funding.
Any funding not provided for by the user fee or tax would have to be provided for via appropriations from DeLauro’s Subcommittee. Even in the House-passed food safety bill, however, the majority of the new costs resulting from the proposed new law would come from appropriations because the fee is only big enough to cover a fraction of the cost of the legislation.
NSAC is opposed to the highly regressive flat tax in the House bill, which is designed to hit small farms and small local processors hard while allowing food industry giants to sail through relatively unscathed.
We would support the no-fee Senate approach over the House regressive flat tax if in fact those are the only two choices. NSAC would, however, support a fair, well-designed tax that was progressive, with exemptions for small producers and processors and three or four graduated levels above the exempt level. In other words, if the tax were based on the time-honored “ability to pay” principle, and included a basic exemption level below which it did not apply at all, it might be acceptable.
NSAC will continue to continue to oppose a flat tax and will work for either no fee, as in the Senate bill, or a reasonable, progressive fee structure. The Senate bill is expected to go to the floor for a vote between Easter and Memorial Day. After that it will need to be reconciled with the already passed House bill. To stay informed of NSAC’s work, sign up for our weekly roundup and action alerts.