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Restaurant Relief Funds Dropped From Omnibus Spending Bill, Crushing Operators’ Hope For Needed Financial Aid

Much to the disappointment of many restaurant operators, additional restaurant relief was not included in the omnibus spending bill signed by President Biden on Friday. 

“It’s grief, all over again, just a lot of grief,” said Kim Hammer, owner of Bittersweet in Raleigh, North Carolina.

Many had been waiting in anticipation to see if a Restaurant Relief Revitalization push led by Senate Small Business chair Sen. Benjamin Cardin (D-Maryland) and Sen. Roger Wicker (R-Miss.) would get included in the government spending package, legislation that could’ve brought up to $48 billion in financial aid to the industry. The funding was halted by Republican opposition, according to reporting from CNN. Cardin says, however, he doesn’t plan to give up.

“I am grateful for the support of @SenSchumer in pushing for this assistance and will continue to work with him, my Republican colleagues that support this effort & @POTUS to advance this issue forward,” Cardin posted to Twitter on Wednesday.

Unfortunately for many independent restaurant owners, time is running out. And industry activists are calling the decision “catastrophic”.

“I hear from business owners every day who are having to close their doors and since Congress and the White House couldn’t see their way to refill the RRF, hundreds more will face the same fate in the coming weeks,”  said Erika Polmar, Executive Director of the Independent Restaurant Coalition. “Communities aren't just losing institutions they love. They are losing the jobs they need, as are the farmers, bakers, brewers, distillers and other suppliers restaurants support. This is a catastrophic day for independent restaurants.”

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. This leaves 177,000 restaurants in the queue. Data from the Independent Restaurant Coalition shows that 80% of restaurants that did not receive an RRF grant reported they’re on the verge of permanent closure.

The recent news hits particularly hard for restaurant owners who were told they were approved for a first-round RRF grant, only to find out in the following weeks that the money wasn’t coming. The New York Times reports that nearly 3,000 restaurant owners were approved for grants that were later rescinded. Hammer was one of those operators.

“We started making decisions based on it, and then it was just taken away,” she says. “To have some people chosen to be saved and others just abandoned, it’s heartbreaking.”

Now, Hammer says she’s not only struggling to stay afloat but faces starker competition with the restaurants around her who did receive RRF.  “It’s almost like going back to year one. I don’t have money for new equipment, I don’t have savings,” says Hammer. “I’ve lost every part of my personal savings, my child’s college fund, to keep my business alive, and I’m down a bartender and can’t throw money at the problem like other businesses can.”

Like many in the industry, Hammer says she’s now lost hope of seeing any government financial aid come through in the future.

“On a broader level, my father raised me to see my entrepreneurial spirit very early, and I felt how it was great to be a woman in this country because you have freedoms you don’t have in other places, and you have support and help to get your business going. I was just a tiny baker in my kitchen, working with the SBA, and I became this big advocate of, ‘If you follow the rules, you’ll get the support’,” says Hammer. “But now, there’s no other way to say it – having this happened has really crushed my faith in the government. I don’t know how I’m going to come out of this.”

Hammer has already had to close one business. Without a supportive landlord, she said Bittersweet would likely be closed by now, too. She’s found a way to operate with less staff, during fewer opening hours, while being “very, very cautious and careful”. But she knows not everyone is as fortunate to have an empathetic and flexible landlord, and she remains uncertain of what her own future looks like.

“You hear politicians and the general public saying, ‘Oh restaurants are doing great, look how crowded you are,’ but that doesn’t make up for the 18 months we were closed down,” says Hammer. “It's like when a tornado hits your house. You don't put one brick back up, and then have people go, ‘Oh look, you’re doing so well’.’” 

As restaurants continue to struggle to regain pandemic losses, they’re also faced with a strained supply chain that has caused food prices to soar. The recent Producer Price Index (PPI) report released by the Bureau of Labor Statistics (BLS) indicated food prices rose 12.8% over the past year, including major jumps for ingredients critical to restaurants like beef and veal (43.9%), grains (22%), shortening and cooking oils (36.4%), and eggs (40.9%). Another recent BLS report showed that restaurant and bar staffing continues to be a challenge, too, with employment still down 824,000 from pre-pandemic levels.

Industry activist groups remain committed to fighting for federal funding for the industry. And while many restaurants are predicted to face closure in the meantime, there does at least appear to be some bipartisan support for additional funding. The Independent Restaurant Coalition reports that 299 lawmakers in the House of Representatives and 52 members of the Senate have signed onto four pieces of legislation supporting adding money to the RRF. The Independent Restaurant Coalition and the National Restaurant Association have both noted that they will continue to call on Congress to take action.

“News that Congress is walking away from the RRF is a gut punch to the 177,000 restaurants who now have some incredibly difficult decisions ahead of them,” said Sean Kennedy, executive vice president of the National Restaurant Association. “The pandemic is over for much of the economy, but small business restaurant owners have taken two steps back with every variant. We will continue to pursue an all-of-the-above agenda to rebuild and advance the nation’s second-largest private employer.”

Unfortunately, after seeing negotiations drag on for months, operators like Hammer say they’re all out of optimism.  “I’m not holding my breath,” she says.

[Photo by Ellie Burgin from Pexels]

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