Key services performed by the Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) will be paused if the government shuts down this week, TTB deputy administrator David Wulf said during the Beer Institute (BI) annual membership meeting this week.
“This seems to happen all too frequently,” Wulf said of budget-driven shutdowns. “Hopes are certainly high we won’t get to that point, but certainly significant portions of our operations will shut down if there is a lapse in appropriations later this week. That includes things like action on permits and and brewers’ notices, action on label approvals, formula approvals, those sorts of activities.”
The House of Representatives must pass a continuing resolution before midnight on Thursday to keep the federal government and its agencies funded before its fiscal year ends. Speaker of the House Nancy Pelosi told reporters on Wednesday that she does not believe the government will shut down.
“I think we’ll have a big vote tomorrow,” she said, according to CNN.
If the government shuts down, the TTB will be funded to continue tax collection and trade practice regulations, but its other functions, such as label and formula approvals, will pause.
Shutdowns have occurred before, BI vice president and general counsel Mary Jane Saunders said during her conversation with Wulf at the meeting.
“We had a shutdown during the Clinton administration that was 21 days, one during the Obama administration that was 16 days ,and the last one during the Trump administration was 35 days, the longest in history,” she said. “Obviously it’s fair to say we don’t know if there will be a shutdown or how long it will last. But the longer it takes, the more painful it is.”
Wulf cautioned beer industry members against submitting a rush of label, formula or permit applications ahead of a potential shutdown.
“It makes sense on its face, but unfortunately what it would do is create sort of a glut and a lot of things that we sort of get lost in the rush post shutdown to start plowing through that workload,” he said. “The best thing to do is to prioritize what is most important, and then go ahead and have that ready to come in following the shutdown.”
Other than a potential looming shutdown, the TTB is focusing on “balancing the workload,” Wulf said. The bureau will take on some imports responsibilities from U.S. Customs and Border Patrol (CPB) in January 2023. Under the Craft Beverage Modernization Act, beverage alcohol importers will no longer receive the lower excise tax rate at the time of entry, but must apply for a refund, which the TTB will facilitate.
“There’s no shortage of things flying at us from all angles and trying to do that in a way that doesn’t detract from the level of service we’re able to provide to this industry,” Wulf said. “We’re a relatively lean organization with only about 500 strong federal employees and a few dozen contractors, but that is pretty much it.
“We’ve been sort of steady at those levels for the last decade or so at a time when the universe of our regulated industry has grown, and really exploded,” he continued.
Earlier this month, a coalition of 13 beverage alcohol trade groups asked the U.S. Senate appropriations committee that the Fiscal Year 2022 Financial Services and General Government appropriations bill include $149.3 million for the TTB, with $18 million earmarked to help the bureau staff up to support the new import duties.
In addition, the TTB is tasked with considering new trade practice regulations following the White House’s executive order to promote competition. The treasury department has received nearly 800 comments from affected trade groups and businesses, which it will consider when compiling a report that it will send to the White House competition council in November, Wulf said.
“We’re asked to take the next 120 days to consider — and emphasize the word consider — potential regulatory changes to further promote competition within the industry,” he said. “That’s certainly something we’re committed to doing as a community and to involving you all in that discussion.”
Wulf joined the TTB in December 2020, after spending a decade at the Department of Homeland Security (DHS) as the associate director for chemical security at the Cybersecurity and Infrastructure Security Agency. He said he appreciates TTB’s legacy, compared to the relatively young DHS.
“TTB is just steeped in so much history going back 230 years to George Washington, Alexander Hamilton, the Whiskey Rebellion, up through Eliot Ness and The Untouchables and bringing Al Capone to justice in Prohibition-era Chicago,” he said. “All of that really just strikes you when you walk in the door.”