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Beer Group Looking to Brew a New Approach

If you’re looking for a window into how the GOP-leaning National Beer Wholesalers Association talks to the new majority party about a key issue, ask Rep. Earl Pomeroy (D-N.D.).

The association is one of several that has put permanent repeal of the estate tax at the top of its legislative priorities. But with Democrats in control, the NBWA, like other business groups, is in the process of re-evaluating its lobbying agenda and how the estate-tax issue, a poison pill for many Democrats, fits in.

Pomeroy, a member of the tax-writing Ways and Means Committee and the conservative Blue Dog Coalition, for years has proposed an alternative that would eliminate the estate tax for 99.7 percent of people who inherit assets, he said, adding that his measure got trounced by Republicans who wanted 100 percent repeal or nothing. The NBWA, under its former president David Rehr, developed a reputation as a Republican stalwart. Now, Pomeroy said, the organization, with Craig Purser at the helm, is taking a different approach.

“I have talked to them,” Pomeroy said. “They told me [the estate tax] wasn’t as high an issue as it has been in the past with them. They’ve had a leadership change. They expressed to me they intend to be less partisan-aligned than before.” Pomeroy said that during a visit this year with officials from the group, he got “the impression from the beer wholesalers that the business of beer is going to be front-and-center in their legislative agenda this year. They don’t want to be seen as just an entirely partisan, predictable part of the inner circle.”

Purser declined to discuss the estate-tax issue and whether it will continue to be a priority for the NBWA.

Sources familiar with the beer group say association officials have been meeting with the membership to craft a legislative agenda for this Congress and likely will have some clear talking points by mid-April, when the NBWA convenes its annual legislative conference. One lobbyist familiar with the beer wholesalers’ approach said that it and other groups “are looking at the new reality” and are focusing on new ways of approaching the estate-tax issue. Beer wholesalers care about the issue because most are family-owned businesses.

The group also is channeling more of its resources into state issues that govern how beer is distributed.

“I think everybody in town is really looking at this Congress like the first day of school, and that means we’re still getting to know each other in our respective roles,” Purser said.

Although the NBWA’s most recent hire as vice president for public affairs, Rebecca Spicer, came from the Bush White House communications shop, the group’s chief lobbyist is Michael Johnson, a one-time aide to then-Sen. Wendell Ford (D-Ky.). Other Democrats on the team include Jesse McCollum, a former aide to Rep. Edolphus Towns (D-N.Y.).

“Our group has had great relationships with folks on both sides of the aisle,” Purser said. Last year, the NBWA reported spending $330,000 on lobbying, according to Senate public records. In the 2006 election cycle, the NBWA also gave more to Democrats than it had the previous one, giving about 30 percent of its $3 million to Democrats in 2006, up from 24 percent to the party in 2004.

In addition to ramping up its efforts against the estate tax, the NBWA last year also lobbied for a bill it had previously fought after industry-opposed parts were stripped. That measure, the Sober Truth on Preventing Underage Drinking Act, established a media campaign and new grants to fight underage drinking. And it affirmed state-based alcohol regulation, something the beer group wanted. It was signed into law in December. “We helped work to forge consensus to pass this bill,” Purser said. “Our whole team and our whole organization were very proud of that.”

On the future of the estate tax, a Democratic Ways and Means aide said that although the issue gets people “very excited” on both sides of the aisle, “it’s not on the immediate agenda.”

Pomeroy said he’s as opposed to complete repeal as he has been in the past. “It’s a budget buster benefiting only the wealthiest few families,” he said. But, he added, “In my opinion, it is a highly foolish component of the tax code.” And he is working with leadership to see if there’ll be an opportunity to move his measure forward.

In the Senate, Sen. Jon Kyl (R-Ariz.) has championed the permanent repeal of the tax. Last year, he crafted what became known as the “Kyl compromise,” which would have exempted up to $5 million from taxes and then taxed inheritances above that at the rate of capital gains, said an aide to the Senator.

“It’s still very much a top priority. It hasn’t been cast to the wayside,” the Kyl aide said. “But there are two things that have to be determined: timing and the right vehicle.”

This aide added that the beer wholesalers group, breaking from the harder line it had previously taken, became one of Kyl’s staunchest supporters last June when the group sent each Senate office a bottle of Blue Moon beer with a message. “Once in a blue moon, Democrats and Republicans have the opportunity to do something together for America’s family owned businesses. … Vote yes on the cloture motion to proceed to H.R. 8. Vote yes on the Kyl compromise,” it said.

An industry source familiar with the NBWA said the beer association most likely will continue to push for the tax’s repeal, though perhaps without the same vigor as under Republican rule.

“Knowing Craig as their executive, my feeling is they are very member-centric and the members still want” to pursue the estate-tax repeal, said this industry source. “NBWA and everyone else that holds that issue pretty dear will still hold that issue pretty dear.”

Juanita Duggan, former chief executive of the Wine and Spirits Wholesalers of America, now runs the American Forest and Paper Association, whose members also want a permanent repeal of the estate tax.

“Nobody has had much experience making tax policy with this new Congress,” she said. “We will continue to pursue estate tax for timber owners because it’s really, really important for us,” she said. The group recently put together its internal priorities and added estate tax to it. “We wouldn’t lift off where we left off last time,” she acknowledged.

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