Grace Dickinson | February 24, 2022, 09:51 AM CST
For many restaurants, time has already run out. Others are swimming in a growing pile of debt in a struggle to stay afloat. But cross your fingers – there could be hope on the imminent horizon. A group of congressional representatives, led by Senate Small Business chair Sen. Benjamin Cardin (D-Maryland) and Sen. Roger Wicker (R-Miss.), are working to get another round of relief funding passed, with the deadline being March 11.
The goal is to attach the standalone legislation to President Biden’s omnibus spending package, which needs to be passed by March 11 to avoid a federal government shutdown. The primary purpose of the proposed funding is to provide financial assistance to restaurants and bars, but the package’s reach may also expand to help similar small businesses. It’s one of several restaurant relief proposals across the past eight months, none of which have yet to make it anywhere.
However, according to a report from Roll Call, after spending weeks negotiating with senators from both parties, Cardin said they had a tentative agreement that should be able to get the needed 60 votes in the Senate. If additional funding doesn’t pass, the consequences could be dire, say industry activists.
“We are at a do-or-die time for action from Congress,” says Sean Kennedy, executive vice president of the National Restaurant Association. “Every indicator shows that far too many restaurants are on the brink of failure.”
The original Restaurant Revitalization Fund (RRF), which was first introduced in March of 2021 as part of the American Rescue Plan stimulus bill, allocated $28.6 billion in federal funds for restaurants as tax-free grants. More than 370,000 restaurants applied. But only 105,000 received funding. By the end of June of 2021, the RRF was depleted, which meant more than two-thirds of applicants were left without a dime. In a recent survey by the National Restaurant Association, nearly 50% of respondents who didn’t receive an RRF grant said it’s unlikely that they’ll stay in business beyond the pandemic without one.
“We created winners and losers accidentally,” says Bobby Stuckey, an Independent Restaurant Coalition board member and co-founder of Frasca Hospitality Group in Colorado. “I know it's hard for society to understand the desperation because they're seeing mask mandates being lifted. They're seeing people back in the restaurants, but you're not restabilizing an industry that’s the largest private sector job creator in the country with a couple busy Friday nights.”
The cost of the Cardin-Wicker-led proposed relief bill is still under discussion, but Cardin said it won’t be more than $48 billion, Roll Call reports. That’s just under the roughly $50 billion that the U.S. Small Business Administration (SBA) estimates is needed in order to fund the RRF applications submitted before the application portal was closed.
Under the proposal, only restaurants who applied for the first round of RRF would be eligible for the new round of funding. There won’t be a new application process for restaurants and bars that didn’t apply for the last round. The money will come from a mix of unobligated funds from prior pandemic aid packages that will be repurposed and new appropriations, Roll Call reports.
“If we address the 177,000 restaurants that are in the queue – those are the ones that qualified [in the first round] and felt the pandemic – that would be the starting point. We have to get those 177,000 restaurants funded,” says Stuckey.
Across the next few weeks, industry activists say they plan to continue to heighten pressure on Congress to take action. Many worry that the forthcoming omnibus package may be the last opportunity for hope.
“It’s clear that if industry-specific relief isn’t moved in the next month, it’s unlikely to ever happen,” says Kennedy.
Stuckey agrees that the next two weeks are crucial. “That spending package is very rare. If you look at the 8,000 something bills that get presented a year on Capitol Hill, few actually go as a standalone bill, and so the odds are just against you,” he says. “But if we don't get it in that omnibus, we're 100-percent going to keep fighting because we know how bad these businesses are struggling.
About The Author
Grace Dickinson is a staff reporter at Back of House. Prior to joining Back of House, Grace worked as a features and service reporter for the Philadelphia Inquirer.
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