2017 ACSA Legislative FLY-IN

Last month, H.R. 747 passed the co-sponsor threshold for a House majority and, as of this week, had 252 co-sponsors signed on. On the day of Fly-In, S. 236 was still short of a Senate majority, with 45 co-sponsors committed to it. For that reason, the Senate was the primary focus of distillers’ lobbying efforts on Tuesday.

During the breakfast session, Sen. Wyden who received the inaugural Craft Spirits Champion Award (pictured left) asked Fly-In participants to help with “some heavy lifting” to get a handful of uncommitted Senators on board to reach a majority of co-sponsors.

“Make the case that there are already the votes in the House and that the Senate’s what’s holding it up,” Wyden said.

One of the major selling points of the bill to which legislators are most responsive is the fact that it’s creating greater incentives for small producers than for large spirits companies. Any benefit that major producers would see would be equivalent to little more than a rounding error.

The benefit for small distillers, on the other hand, would be significant. The tax savings would enable them to hire more staff, purchase new equipment, and finance an expansion, for example.

“Getting capital helps small guys grow,” Wyden pointed out. “That would really be the connective tissue here.”

If passed, the bill ultimately could help create more than 20,000 new jobs and $740 million in new wages for the craft beverage business and allied industries. Product and service suppliers to distilleries also were in attendance to demonstrate the benefits of the proposed FET cut to many interconnected industries. When distillers are able to reinvest in their businesses with money they save on excise taxes, it’s those suppliers who provide new equipment, raw materials, and management technology solutions.

Another key selling point is the bill’s bi-partisan support.

“Bi-partisanship is building coalitions, it’s not about taking each other’s stupid ideas—anybody can do that,” Wyden said. “Bi-partisanship is about taking good ideas that you have and good ideas that the other people have that you can live with.”

Rep. Paulsen (pictured right with Mark Shilling), who received his Craft Spirits Champion Award at ACSA’s cocktail reception at the close of the day’s lobbying activities, echoed many of Wyden’s key points.

“The good news is it’s got bipartisan support, big numbers in the House and you made, I think, some progress in the Senate with some more folks signing up,” Paulsen said. “It’s ultimately about helping small businesses and entrepreneurship and a lot more jobs. And I think a lot of Americans in local communities want to have local products.”

Wyden noted that Senators might push back a little, saying that they’re waiting until legislators take up the broader tax reform effort—expected this fall—before they commit to co-sponsoring S. 236. But the counter argument there is that the bill has a likelier chance to succeed as part of more comprehensive tax reform legislation if it has majority support.

“In order to have more leverage when the debate on tax reform starts, we need to have more sponsors in the Senate,” Wyden explained.

Another major highlight of the day’s activities was ACSA’s fundraising luncheon in honor of Rep. Kevin Brady (R-TX), chairman of the House Ways and Means Committee. The luncheon, held in the Bolton Room of the Capitol Hill Club, put distillers in direct contact with the Congressman who leads the House committee with the most authority to shape tax policy—critical in ensuring that H.R. 747 progresses through the chamber.

Distillers also heard from the regulatory side of the federal government, as officials from the Alcohol Tobacco Tax and Trade Bureau (TTB)—the part of the government with which attendees, no doubt, had had the most prior interaction—addressed the group.

“The alcohol industry has kept us plenty busy lately,” said Theresa McCarthy, assistant administrator for the TTB (pictured right with Christopher Thiemann). “The growth, particularly in the craft sectors has been booming for the past decade, particularly the past five years, causing steady, if not steep workload increases for us. The thing that I want to convey today, if there’s only one message that you take away, it’s that we want to see you succeeding in business. We’re regulators, yes, but we want to be good regulators.”

For many participating spirits professionals, the one-on-one interaction with federal government officials proved to be an eye-opening experience. For at least half of the members, it was a first-time visit to Congress. They had plenty of time to prepare and discuss strategy the day before at a Lobbying 101 session at the Hyatt Place Washington, D.C. and over cocktails and light bites at the welcome reception at one of the District’s rapidly growing number of world-class distilleries, Republic Restoratives.

(Left to Right: Rachel Gardner, Margie Lehrman, Pia Carusone)

I appreciated that [Senate staff] actually took the time to meet with us and listen because sometimes it feels like they don’t listen,” noted Susan Lord, co-owner of Jersey Spirits Distilling Co. in Fairfield, N.J. “I have to say, I was very excited with what occurred, that once we had an audience with them, they actually listened and some of them changed [their positions].”

And that may have proved one of Sen. Wyden’s most striking points.

“Most of political change is not top-down,” Sen. Wyden said. “It’s almost always bottoms-up.”

Quite an appropriate term to use with a group of spirits makers.