The 2018 midterm elections have concluded in the U.S., setting the stage for the 116th Congress to open session in 2019. Once again, the cigar industry will be fighting on a couple of fronts for a premium cigar exemption against regulation from the U.S. Food and Drug Administration (FDA). The first is the lobbying efforts for an legislative exemption through bills in Congress, while continuing to lobby for an exemption through the Appropriations process. Over the past seven years, the legislative route has proven to be a challenging one for the cigar industry, and now with some major changes in the makeup of Congress from a partisan standpoint, the challenge appears to be greater as the new Congress opens.
Spearheading these efforts for the premium cigar exemption are the Cigar Association of America (CAA), Cigar Rights of America (CRA), and the International Premium Cigar and Pipe Retailers (IPCPR) Association.
The cigar industry has always lobbied from a bi-partisan standpoint in terms of drumming up support for an exemption, however, the reality is that the Republican Party has still been the one who has provided more support in terms of an exemption. Of the 150 sponsors of the current exemption n the House of Representatives, 128 are Republican and 22 are Democrat. Of the 22 Senate sponsors, 15 are Republican and 7 are Democrat.
From the House of Representatives, the big change is that for the 116th Congress, it will mark for the first time, that the industry will be pushing for an exemption through a House controlled by the Democratic Party. In the current (115th Congress), the Republicans held a 237-196 edge over the Democrats in terms of members of the House. With the upcoming 116th Congress, it has changed to currently 238-198 (with a few seats still to be determined) in favor of the Democrats. With such a drastic flip, it is going to require a lot of work by the cigar industry reaching over to the Democrats – something the industry has not had to deal with since lobbying for the exemption.
The bill for an overall exemption not only serves a purpose to make an exemption into law, but also serves as a way of making the cigar industry’s voice heard. When the bill was first introduced in 2011, a total of 221 co-sponsors from the House of Representatives signed on – enough for a working majority. Currently, the number of co-sponsors with the 115th Congress is down 32% from the working majority. Given that decline has occurred under a Republican-controlled House, there is reason for a sense of urgency going into the 116th Congress now that the Democrats are in control.
# of U.S.House of Representatives Co-Sponsors, Premium Cigar Exemption Bills
The other concern is for future Appropriations processes. While the Appropriations process has not resulted in an exemption, the cigar industry has still had some success in terms of advancing the exemption to the final overall bill. With a new party in control, it certainly raises questions if that momentum can continue.
On the Senate end, the Republicans now have 52 seats (and may have 53 after the results of a special election in Mississippi). As far as co-sponsors, support in the Senate has trended up in recent years. Currently, there are 22 co-sponsors for an exemption, up 57% from the original 14 co-sponsors who signed on with the 112th Congress.
However, there are challenges that have surfaced from the midterm elections. First up, Bill Nelson, the Democratic Senator from Florida was defeated for his Senate seat by Republican Florida Governor Rick Scott. While Scott has been an ally of the cigar industry, Nelson was a key ally from the Democratic Party, and was the primary sponsor (along with fellow Florida Senator Marco Rubio) for the exemption bills for the past four sessions of Congress. Another key Democrat who co-sponsored the exemption was Joe Donnelly (D-Indiana), who was also defeated in his bid for re-election by a Republican.
# of U.S. Senate Co-Sponsors, Premium Cigar Exemption Bills
The cigar industry will now be looking for Democratic primary sponsor. The good news is there are some key Democrats in place who can fill Nelson’s role. These names include: Bob Casey (D-Pennsylvania), Joe Manchin (D-West Virginia), and Bob Menendez (R-New Jersey).
The big challenge remains the same with the Senate and that is moving for an exemption through the Appropriations process. While there has been success on the House side, the Senate has proven to be more difficult as the language has not made it on to the Appropriations bills in the past. With some of the changes with both parties, this will be more of an unknown beginning with the 116th Congress.
The 116th Congress goes into session beginning January 3, 2019.
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