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AMI Urges Lawmakers to Reject User Fees When Considering Plan to Reduce Deficit

Monday, May 9, 2011

(American Meat Institute)

AMI joined more than 20 industry associations in urging the "Gang of Six" to reject the administration’s request for user fees as they work to formulate a plan to reduce the federal deficit.  

The Gang of Six is a bipartisan group of senators working to formulate a deficit reduction plan based on the work of the President’s National Commission On Fiscal Responsibility And Reform.  It includes Senate Budget Committee Chairman Kent Conrad (D-ND), Senators Dick Durbin (D-IL), Mark Warner (D-VA), Saxby Chambliss (R-GA), Mike Crapo (R-ID) and Tom Coburn (R-OK). 

The Commission Co-Chair’s Proposal released in November 2010 proposed levying a fee on meat, poultry and egg product producers to offset the cost of mandated Federal safety inspection.  However, this proposal was dropped from the Commission’s final report released in December 2010.

“In our view, food safety inspection benefits everyone and therefore should be paid for through appropriated funds.  Therefore we encourage you to follow the final recommendation of the Commission and not consider any additional fees on meat, poultry, and egg product inspection,” said the associations in the letter to the bipartisan group of senators.

The associations highlighted two new taxes proposed in the President's Fiscal Year 2012 budget proposal that are of great concern to the industry. The first, a mandatory fee, would recover part of the estimated costs of services (such as risk assessments, hazard analyses, inspection planning, compliance review and enforcement, information technology support, and risk communication) that the Food Safety and Inspection Service (FSIS) ordinarily incurs in addition to on-line inspection costs.

The second would be a performance based user fee to recover the costs incurred for additional inspections and related activities made necessary due to the performance of the covered establishment and plant.  Examples of the increased costs for which a performance based user fee could be charged include food safety assessments, follow-up sampling and additional investigations due to the outbreak of disease. 

“Inspection fees will make the current equitable funding mechanism inherently regressive, since low and middle-income families spend a higher portion of their income on food than do wealthier Americans. Furthermore, any proposal to transform government-funded food safety inspection provides less accountability for the government to manage program costs, results and efficiencies,” the letter concluded.

To view the letter, click here: http://www.meatinstitute.org/ht/a/GetDocumentAction/i/69074

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