Even with pundits dissecting every development in Washington, D.C., reading what’s ahead politically for restaurants is not as simple as it might seem, says Cicely Simpson, the National Restaurant Association’s lead lobbyist.
Sure, says the EVP of policy and government affairs for the Washington, D.C., based watchdog, “the environment here has changed, there’s no question.” With the election to the White House of Donald Trump, a businessman with a solid commitment to protecting and promoting commerce, the drift toward additional regulation and hindrances seems to have been halted.
But “I’d be remiss if I didn’t say the healthcare vote didn’t throw people for a loop,” Simpson says. “We find ourselves in the middle of a lot of conversations, so we are being consulted by the House and Senate leadership. But what happens next, what happens when this all comes together, we need to keep our minds open.”
Plus, several political realities have been overlooked in the intense scrutiny of developments in Washington. For instance, during the loud wrangling over replacing Obamacare, seldom noted was the omission of employer-related provisions from the intended reforms. The measures pushed by the White House and moderate Republicans dealt with citizens’ mandate to purchase insurance, not the requirement falling on companies to buy coverage for their staffs.
And in all the high drama, seldom mentioned was the timeline. The NRA is optimistic the burdens placed on restaurateurs by the Affordable Care Act can be lessened or dashed, but “relief is going to take a couple of years,” says Simpson. “Even if they fix the bill tomorrow, you’re talking two, three, four years to feel the effects. Relief is probably two years off, even if they did something today.”
And then there’s the paradox of easing restaurants’ regulatory burden by keeping certain laws and regulations on the books.
Reforming healthcare regulations is one of the NRA’s top three federal legislative and regulatory priorities for the near term. Here’s a deeper look at that and other government priorities for the association in the near and mid-term.
Tax reform
A complete overhaul of the system is expected to benefit all businesses, not only by cutting their tax payments, but also by lessening consumers’ burden so they’re left with more disposable income.
Lowering business’ tax rates overall is a key priority for the NRA, says Simpson. In addition, it’s protecting a benefit peculiar to the industry, a credit for the FICA taxes restaurants pay on the portion of tips that push a server’s income beyond the minimum wage. In essence, the so-called IRC 45B credit offsets employers’ Social Security payments for tipped income exceeding the mandated wage.
“We want that to stay in the law,” Simpson explains. But the credit could be endangered by lawmakers looking to counterbalance the loss of revenues from rate rollbacks.
Preserving swipe fee concessions
Among the pieces of Obama-era legislation that could be reversed by the Republican-controlled Congress is the Dodd-Frank Act, a comprehensive package of stipulations intended to curb risky banking practices. But scuttling the whole law would also reverse the Durbin Amendment, a provision that keeps credit-card processing fees in check. The stipulation limits what banks can charge restaurants and other merchants for letting customers pay by credit card.
Says Simpson: “We plan to go to people on the Hill and in the administration and say, ‘We understand. We know you don’t want to overregulate. But this is one of the things that actually helps small business.”
The amendment has saved American businesses $8.5 billion while lowering consumers’ costs by $3.5 billion, according to third-party research cited by the NRA.
Healthcare reform
The NRA is focused on correcting three problems in the Affordable Care Act, starting with the definition of a full-time employee as someone who works at least 30 hours a week. The association has argued that the redefinition of a full-timer is illogical and a sharp departure from convention. It would like to raise the threshold to 40 hours, meaning some employers would not have to provide health insurance to workers putting in 35 hours week—or strategically cut their hours to bring the total below 30.
In addition, the group intends to clarify who is actually a seasonal worker, and who is a permanent employee. Right now, the law has set a wide, far-extending definition of who is or is not a limited-time staffer brought on for a busy stretch.
Finally, the NRA wants to cut the paperwork obligations that fall on restaurateurs to prove they’re abiding by the law. The record-keeping mandates eat up valuable time and are widely regarded by restaurateurs as an exercise in frustration.
“The realistic timeframe is that Congress will move on [healthcare reform] this spring,” says Simpson.
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