Thursday, May 21, 2009

Here's to your health(care)

Here’s a name right now that you need to know: Max Baucus.

Max is a Big Sky guy, a US senator from Montana. He’s also chairman of the Senate Finance Committee. And as we all know the country’s finances are as wobbly as a barstool with uneven legs.

Besides fixing the banks and the jobs scene, Congress and President Obama (who’s been known to enjoy a beer at courtside of an NBA game) are looking for the biggest Band-Aid ever to put on the healthcare system.

That’s why if you’re a beer drinker you need to know about Max (here’s his email). On Wednesday, a news report bubbled up about funding healthcare with higher taxes on beer, liquor and wine. (The current projection is 2 bucks more a case for the consumer; and a shout-out goes to PubScout Kurt Epps for pointing out this story.)

This was probably a train you could hear coming from a long way off: messed up economy – the worst since Big Band tunes were a fresh sound on radio; a messed up healthcare system; changing times; yet another pivotal moment in the nation’s existence. That a higher sin tax would get put on the table is predictable, indeed. (Yet cigarettes have never been pulled as an unsafe product.)

Collision course
But it’s interesting, too, because on Feb. 3, the bill H.R. 836 was introduced, proposing to reduce the $18 per barrel federal beer tax for the big brewers to $9, its pre-George H.W. Bush (Bush the Elder) level, and also halving the $7 tax for craft and pub brewers. (FYI: Jersey’s beer tax is $3.72 a gallon, and for now Gov. Corzine isn’t touching it.) A quick spin over to doesn’t indicate an update on the status of this bill, dubbed the Brewers Excise and Economic Relief Act of 2009 (yes, it forms the acronym BEER).

A little more about BEER: Predictably, it has some folks frowning in a variety of circles, fussing and thrashing about with some figures dropped at the doorstep of Congress: Loss of federal revenue, $1.5 billion; make worse a $200 billion annual toll for dealing with drinking-related health problems; fatten the wallets of foreign beverage companies that account for 90% of US beer production.

On the industry side, the numbers campaign goes like this: brewers, directly or indirectly, pump $190 billion annually into economy and provide more than 1.7 million jobs with wages and benefits of nearly $55 billion.

So with that floating around in the background, there’s the log of healthcare reform tossed onto the fire. This has the potential to become a huge, complex battle, because anyone who has enjoyed the runaround by HorizonBlue Cross knows healthcare needs fixing, and it’s going to take some major money and major reform, but the brewing industry (led by the A-B types) isn't going to just take it. Certainly not after pitching a tax cut.

Already, Coke and Pepsi have wet their pants over a proposal to tax soft drinks (which we support) as a way to kick in toward healthcare. It’s patently absurd to think that soft drinks deserve a pass because there’s no ethyl alcohol in them. When high fructose corn syrup replaced sugar in soft drinks – it’s cheaper than sugar, and corn enjoys some federal propping up via subsidy, about $40 billion worth since the 1990s – the standard size of a bottle of soda jumped a half pint; so now everyone was doing the Dew 20 ounces at a time, or burping from 7-Eleven’s quart-size Big Gulps and 1.5-liter Super Big Gulps. The overconsumption/obesity/diabetes argument applies.

But a higher tax on beer, liquor and wine to pay for healthcare? Well, OK, we understand trying to collect taxes from a number of revenue sources, and we've heard all the complaints about alcohol and health (funny, the wine industry's quick reaction to this was to highlight the health benefits of reds and demand a pass). But here’s one point to consider: Beer, wine and liquor have already paid their dues. In fact, it’s part of New Jersey history: Sea Girt, Aug. 27, 1932, FDR launches his campaign for the White House, vowing to fold the tent on that colossal failure called Prohibition, lift the economy out of the throes of the Great Depression with the help of excise taxes on beer, wine and liquor. You didn’t have to be alive in 1933 to know Prohibition was sent to history’s trash pile. And beer has been paying a lot of Uncle Sam’s bills ever since.

So, we argue that if Congress wants to tap beer for revenue again, the industry deserves something in exchange (and not something that makes just the big brewers happy). And look no further than the three-tier system under which beer became legal again. It’s a confounding collage of regulations that change state to state and has resulted in unfair treatment of small brewers and cozy relationships between distributors and the giant brewers. It has outlived its purpose. But taking on the three-tier sysem isn't going to go over too well, either.

Did we mention the battle is complex?

1 comment:

Kurt Epps-The PubScout said...

Nice job...somehow I knew this story would get the right treatment from you. Can't help but ask "How's that Hope and Change" thing working our for you, Beerdrinker?

Contact Paul Mulshine over at the Ledger..there's a video of him and Dave Hoffman discussing the soda tax on Mulshine's blog. As always, Dave is Dave and he sure looks healthy.