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Trade associations representing the grocery industry reacted positively to the news Friday that the U.S. House of Representatives had passed the financial rescue bill, after some contentious wrangling in Congress while local and global markets watched anxiously. The revised bill was passed earlier last week by the Senate.
The National Retail Federation said the legislation would help protect Main Street jobs, in addition to stabilizing Wall Street and credit markets.
"[Before passage of the bill] we stood on the verge of an unprecedented financial calamity that had already begun to threaten millions of Americans regardless of whether they were investors, owned a modest 401(k), or simply held a job," noted NRF s.v.p. for government relations Steve Pfister. "[T]he House has voted for a plan that will maintain the ability of American consumers and businesses to obtain the credit needed to keep our economic engine running and to pave the road to economic recovery."
Pfister added that "[r]etailers have worked diligently over the past several days to make sure members of the House and Senate fully understood the profound impact the lack of functioning credit markets would have on businesses and consumers across the nation."
According to NRF, the revised bill contains "two significant and longstanding retail priorities." The first is a provision that would renew a depreciation rule that expired at the end of 2007 that permitted retailers that lease their stores to write off remodeling expenses over 15 years rather than the previous 39 years. The rule would be extended through the end of 2009 and also expanded to include owned stores. The second is a measure strongly backed by association that would require health plans to provide the same level of coverage for mental illnesses as physical illnesses.
The Food Marketing Institute was equally enthusiastic about the bill's passage. "This was absolutely necessary to prevent our financial institutions from grinding to a halt," said outgoing president and c.e.o. Tim Hammonds. "Every business, large and small, in communities all across America were seeing lines of credit dry up and their costs of borrowing begin to spiral out of control. These businesses and the consumers they serve can breathe a welcome sigh of relief thanks to this big step toward restoring confidence in our financial institutions."
The National Grocers Association sounded a more cautious note, however. "We are optimistic that the passage of the bill will bring some stability to the financial markets," NGA s.v.p. and general counsel Tom Wenning told Progressive Grocer, noting that the organization had heard from its members that the credit markets were getting tighter, making it increasingly difficult to renovate stores or even buy new equipment. Wenning said that he hoped the legislation would "free up some liquidity" in those markets, but that "time would tell" as to the ultimate effect of the financial rescue.