Insights / COVID-19 Resources / House Passes $42 Billion in Restaurant Relief
House Passes $42 Billion in Restaurant Relief

Just as many operators began to give up all hope on more federal funding, a new round of restaurant relief was passed by the U.S. House of Representatives on Thursday. The $55 billion small business aid package proposes to allocate $42 billion for the Restaurant Revitalization Fund (RRF) and $13 billion for other hard-hit businesses impacted by the pandemic, like gyms and live entertainment venues. 

“We really hope that the Senate will act swiftly to do the same [as the House],” said Erika Polmar, executive director of the Independent Restaurant Coalition, in a press conference following the House vote. “If they don't replenish the Restaurant Revitalization Fund, tens of thousands of businesses will close, taking millions of jobs with them.”

The original 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 one-third of applicants received funding. This left 177,000 restaurants in the queue.

Another round of funding could become a literal lifesaver for the industry. Over 80% of restaurants that did not receive an RRF grant reported they are on the verge of permanent closure, according to the Independent Restaurant Coalition. That would be a devastating addition to the estimated 90,000 restaurants and bars that have reported closing since the beginning of the pandemic.

Among continuous rallying cries from activist groups, there have been attempts in Congress to pass another round of RRF across what now accounts to nearly a year. The most recent attempt was a $48 billion package that a bipartisan group of Senators worked to attach to the omnibus spending bill. It was removed before the bill made it to Congress. 

“We heard several people in Congress trade barbs today about whether restaurants are asking for a handout. But let's be clear, this is about leveling the playing field,” said Le Cavalier  chef-partner Tyler Akin at Thursday’s press conference. “We're just asking Congress to finish what they started, make sure everyone that’s struggling with pandemic-induced debt, the high cost of inflation, and reduced business can get a fair shot.”

The bill would not reopen the RRF to new applicants. It’s intended to distribute funding to those who were previously denied a grant. However, restaurants that didn’t initially apply for RRF could be eligible for a portion of the $13 billion allocated for other business, according to Earl Blumenauer (D-Ore.), who coauthored the bill. The bill would also establish a reconsideration process for applicants who’ve been denied funding.

To receive a grant, restaurants and bars would need to certify that they’re currently in operation or intend to reopen within six months. While the $42 billion is expected to be enough to provide grants to the two-thirds of restaurants that didn’t receive RRF, the legislation lays out the flexibility for the Small Business Administration (SBA) to “equitably reduce award sizes” if needed.

The bill also outlines enhanced auditing and reporting requirements to ensure transparency of the funding and prevent fraud. The SBA will be required to regularly publish data and information about the grant process publicly.

Funding for the bill would partially come from recovered fraudulent pandemic spending from programs like RRF and the Paycheck Protection Program, along with unused funds from previous pandemic programs. Sen. Majority Leader Chuck Schumer indicated he will bring it to the Senate floor for a standalone vote after Congress’s two-week Easter and Passover recess, according to Independent Restaurant Coalition cofounder Tom Colicchio. Until then, many restaurant operators wait in the midst of yet another wave of anticipation.

“Today, Congress gave our struggling businesses hope,” said Akin. “The Senate does not have time to waste. They must pass this bill quickly to protect these small businesses, our local communities, and most importantly, our workers.”

Grace Dickinson is a reporter at Back of House. Send tips or inquiries to grace@backofhouse.io.

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