business news in context, analysis with attitude

There are numerous reports that the first reported case of mad cow disease on American soil could create new momentum for County of Origin Labeling (COOL) legislation.

The US Congress passed legislation in 2001 requiring such labeling to be in place by October 2004, but then last year included a provision in the $328 billion "omnibus spending bill" that delayed implementation for two years.

The discovery of mad cow disease in Washington State in a Holstein that has been traced back to Canada - which itself discovered a single case of mad cow disease early in 2003 - seems to be complicating the matter. "The issue of mad cow disease has really shined a spotlight on this [labeling] issue," said COOL proponent Sen. Byron L. Dorgan (D-N.D.), chairman of the Senate Democratic Policy Committee. "It provides some real propellant as a major consumer issue that it did not have before." Senate Minority leader Tom Daschle of South Dakota has said that he will ask the Bush administration to call for more immediate implementation of COOL regulations.

The problem this potentially creates for the Bush administration is twofold.

First, it is an election year, and every decision potentially has implications for presidential politics. Not being aggressive on COOL could potentially be seen as having a downside for President Bush when he faces the voters in November, depending on how the democrats embrace the issue.

Second, there are some reports that there could be some resistance to passing the $328 billion spending bill if the COOL delays remain in place. Daschle told The Washington Post that he is exploring the notion of "delaying passage of the spending bill to pursue a commitment from the administration to implement the labeling rules," and has gotten support from a number of his colleagues.

If the spending bill is not passed on schedule, it complicates the funding for most federal agencies, which itself could have political implications.
KC's View:
Expect the lobbying machines on both sides of this issue to swing into high gear.

The problem, we think, is that the COOL legislation as written requires far too much of retailers, who are the least able to handle these responsibilities. The job of maintaining records and providing information probably ought to be placed squarely on the backs of suppliers, which have the resources and are better positioned to deal with it.

We're generally in favor of COOL regulations, because we think they are good for consumers. But the legislation as written is an imperfect response to a tough problem, and expecting anything close to a perfect solution probably is too much to ask for in a political environment.