Help for battered restaurants could be on the way as House considers new bills
Almost from the day it was announced, restaurant owners have been complaining that the $670 billion Paycheck Protection Program doesn't work for their industry. Congress has clearly heard them.
Last week, Reps. Dean Phillips, D-Minn., and Chip Roy, R-Texas, introduced the Paycheck Protection Flexibility Act, which would extend the period in which small businesses can use the money and ease restrictions on the amount they can spend on non-payroll expenses such as rent. House Speaker Nancy Pelosi, D-Calif., signaled that she would be willing to hold a vote next week on the act, a shift from her recent strategy to focus only on major coronavirus relief bills, according to a Politico report. The effort appears to have bipartisan support in the House and Senate as a quick fix to the Small Business Association program that has drawn widespread criticism from restaurateurs whose PPP money would convert to a two-year loan if they don't follow the terms of the program.
What's more, Rep. Earl Blumenauer, D-Ore., a senior member of the House Ways and Means Committee, introduced a bill Wednesday that aims to help restaurants ride out the pandemic as they face a future of limited dining capacity, public fear and rising costs to cover masks, gloves and cleaning products. The Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act of 2020, or simply, the Restaurants Act, would create a $120 billion grant program to help an estimated 500,000 independent restaurants survive a potentially long period when they may earn only a fraction of their former revenue.
Under the act, money would be administered by the Treasury Department and available only to independent establishments with fewer than 20 locations under the same name, a caveat designed to avoid a repeat of PPP embarrassments in which chains such as Potbelly, Shake Shack and Ruth's Chris received funds meant for small business. (Some of the companies, such as Shake Shack, gave back the money.) The National Restaurant Association has made a similar plea to Congress, but the Restaurants Act would target only small independents, which represent 70 percent of all restaurants. The grants would cover the difference between revenue from 2019 and those projected for 2020, with a cap of $10 million per grant.
Restaurants are "uniquely vulnerable as we face the covid-19 pandemic," Blumenauer said in a statement. "Few industries have been as uniformly ravaged as the food service industry, which is why I am working with a coalition of culinary experts and advocates and pushing my colleagues in Congress to provide support. Local, independent restaurants are the beating heart of our communities. They need relief now."
The legislative efforts come after weeks of lobbying from the National Restaurant Association and the recently formed Independent Restaurant Coalition (IRC), as well as a Monday meeting at the White House, where 10 restaurant executives expressed their concerns to President Donald Trump. Last month, the IRC sent a letter to both chambers of Congress, asking for the restaurant stabilization fund.
Will Guidara, a founding member of the IRC and the former owner of the Michelin-starred Eleven Madison Park in New York City, alluded to the grant program in the meeting Monday with the president.
The program, Guidara said, "will put all of those people that are currently unemployed back to work, such that, by the third quarter of this year, we're going to be looking at unemployment reports that are astonishingly good, not to mention the supply chain that we represent. . . . Our plan helps bring unemployment back to where it needs to be, and it supports a lot of our other industries that rely on independent restaurants for their survival."