How Discord in Congress Could Impact Small and Independent Brewers

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It has been a busy few weeks in Washington, D.C., with some crises averted and new ones created. The following is a recap of recent events and how they could impact small and independent breweries.

On Saturday, September 29, the House and Senate managed to avert a federal government shutdown by passing a continuing resolution (CR) to keep the government open for 45 days. The legislation passed with bipartisan support, with the majority of democrats voting to support the legislation. Congress has until November 17 to either pass a budget for the 2024 fiscal year (FY) or pass another CR to keep the federal government open. This was positive news to the Brewers Association since if a shutdown had occurred, the Alcohol and Tobacco Tax and Trade Bureau (TTB) would have been impacted, with its key employees being deemed non-essential and forbidden to do any work on label and formula approvals or provide brewers notices. Unfortunately, the CR was not without consequences.

Though bipartisan support is usually viewed as a good thing, some members of the Republican Party were unhappy with Speaker Kevin McCarthy’s (R-Calif.) decision to bring a “clean” CR to the table. On Monday, October 2, Rep. Matt Gaetz (R-Fla.) submitted a resolution to declare the office of the speaker of the House of Representatives vacant, also known as a “motion to vacate.” Earlier this year, when McCarthy was running for speaker, one of the deals he cut included a rules change that allowed any single lawmaker to file this motion. Prior to that, only the majority leader could file a motion to vacate the speaker. On October 3, the motion passed, leaving the House of Representatives without an elected speaker. Rep. Patrick McHenry (R-N.C.) is currently acting as interim speaker.

Without an elected Speaker the House of Representatives is at a standstill. This is an unprecedented situation, and there is uncertainty about what power the interim speaker has. Rep. McHenry officially can preside over the vote of the next speaker, but no official date for that vote has been set.

On October 11, the Republicans held an internal vote for their candidate for speaker, Majority Leader Steve Scalise, who defeated Rep. Jim Jordan (R-Ohio) 113-99 in a secret ballot. On October 12, Scalise withdrew himself from the speaker race. The Republicans voted again, this time supporting Rep. Jordan, winning the Republican nomination for Speaker. As of October 18, Jordan had twice lost the floor vote for Speaker. The Republicans hold a slim majority in the House, making it hard for any single candidate to get the 217 votes necessary. There is some discussion in the House about empowering Interim Speaker McHenry with the full powers of the position for a limited time. It is unlikely that will happen without bipartisan support.

How Does This Impact Small and Independent Breweries?

The time Congress has to pass a 2024 FY budget or another CR is dwindling. Even if the House elects a new Speaker, it will be difficult to get the votes necessary to pass key appropriations bills or to pass a CR without the support of the Democrats. This increases the chances of a shutdown happening in November. As mentioned above, a shutdown impacts the TTB’s ability to do label and formula approvals. It also could impact business loans that need Small Business Administration (SBA) approval and other agencies.

Without an elected Speaker, the House can’t conduct any official business since no one is allowed to bring legislation to the floor. This makes it harder for non-appropriation pieces of legislation to make any progress. The entire legislative process has been slowed down, and bills like the Credit Card Competition Act, the American Innovation and Research and Development Competitiveness Act, and the USPS Shipping Equity Act are less likely to get a vote before the end of 2023.

Brewers Association staff are continuing to meet with congressional offices to advocate on behalf of our industry, including our appropriations requests of $154 million for the TTB 2024 FY budget, and for United States Department of Agriculture, Agriculture Research Services funding for hops and barley growers. The association will keep you updated on any developments in the Speaker race and budget progress.