Industry assails FDA’s ‘food taxes’

A coalition of food industry trade groups is urging the Obama administration to abandon its plan to impose a new set of “regulatory taxes” on businesses to help pay for a national food safety overhaul.

The administration’s top food safety official testified Wednesday in support of hundreds of millions of dollars' worth of proposed user fees related to food facility registration and imports.

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The additional funding would allow the Food and Drug Administration to impose a series of regulations drafted in the last year under the 2010 Food Safety Modernization Act. The regulations together represent the largest food safety update in 70 years, but FDA Deputy Commissioner Michael Taylor told lawmakers that the agency lacks the funding to impose them.

“We can put the rules on the books,” Taylor told members of the House Energy and Commerce panel's Health subcommittee. “Where we lack the resources — and where the fees would be essential — is in implementing the rules.”

Business groups are strenuously objecting to the plan.

More than 50 trade organizations sent an opposition letter Tuesday to Food and Drug Administration Commissioner Margaret Hamburg and Office of Management and Budget Director Sylvia Mathews Burwell.

“As consumers continue to cope with a period of prolonged economic recovery and food makers and retailers struggle with fluctuating commodity prices, the creation of new food taxes or regulatory fees would mean higher costs for food makers lead to higher retail food prices for struggling consumers,” the groups charged.

In his 2014 budget request, President Obama called for a new registration fee for those domestic and foreign food facilities required to register with FDA. The fee would have yielded an estimated $59 million this year.

A second fee on imports would have brought in an estimated $166 million, according to estimates.

Congress, however, has not approved legislation establishing the fees. As a result, Taylor said Wednesday that the agency would not have enough guaranteed funding to implement the safety update.

“Simply put, we cannot achieve our objective of a safer food supply without a significant increase in resources,” he testified.

Republican members of the panel stressed that the FDA has seen its budget balloon, from roughly $1 billion to more than $2.5 billion over the last seven years. The most recent spending bill gave the agency another increase, and devoted around $900 million to food safety efforts.

Considering the increase, the food industry groups are pressing the administration to ask Congress — not the private sector — for additional money in 2015.

“The agency should request such funding through the Congressional budget and appropriations process, rather than seeking authorization of new regulatory taxes as it has done in the past and Congress has repeatedly rejected,” they wrote.

Signatories to the letter included major business heavyweights including the U.S. Chamber of Commerce and the National Association of Manufacturers, as well as industry-specific trade groups like the American Meat Institute, the American Frozen Food Institute and the National Grocers Association.

The White House is expected to unveil its fiscal 2015 budget request next month. Taylor declined to speculate whether the president’s proposal would call for the same set of user fees.

But he defended the fees as essential, and said following the hearing that the business group’s suggestion that the FDA rely solely on appropriations is not realistic given budget constraints.

“We’re familiar with that point of view,” Taylor told The Hill. “That’s not the world we seem to be living in.”