News Article

Momentum builds for new COVID-19 relief for businesses
January 24, 2022


By: Aris Folley

Momentum is building on Capitol Hill for more coronavirus relief funding to support restaurants and other businesses struggling to stay afloat in the face of the latest wave of the pandemic fueled by the omicron variant.

Lawmakers involved in negotiations say support has been building among members for legislation aimed at supporting businesses that have been disproportionately hit by the pandemic.

Sen. Ben Cardin (D-Md.), chair of the Senate Small Business and Entrepreneurship Committee and a leader in discussions on the matter, expressed optimism Thursday when discussing he and Sen. Roger Wicker’s (R-Miss.) efforts to gain more backing for the push among their colleagues.

“We are continuing to try to get broader support,” Cardin told The Hill before adding he thinks lawmakers are “pretty close” to securing the necessary support for the push.

Cardin said the primary focus in talks has been to replenish relief funding for restaurants after a previous batch of funds allocated by Congress ran out months back. The funding would come at a crucial time, advocates say, as restaurants continue to grapple with the economic effects of the ongoing pandemic, particularly as staffing shortages persist in parts of the nation and inflation tacks on to food costs.

Sean Kennedy, executive vice president of public affairs at the National Restaurant Association, told The Hill that the funding “could not happen soon enough,” noting thousands of restaurants “are closed permanently or long term” as many businesses find a hard time recovering during the pandemic.

“Restaurants are still incredibly vulnerable right now and we’re getting the triple whammy of inflationary costs affecting our food prices, a labor shortage that shows no sign of resolving itself and omicron continues to wreak havoc on consumer confidence and the ability of restaurants to offer indoor dining,” he said.

Last year, lawmakers approved more than $28 billion in relief funds designated for restaurants and bars as part of the Restaurant Revitalization Fund (RRF) that was established through the American Rescue Plan Act (ARPA), the sweeping $1.9 trillion coronavirus relief package President Biden signed in March that included money for numerous programs, ranging from expansions to the child tax credit and ObamaCare, as well as vaccine distribution efforts, among other measures.

But advocates said that, while those funds were effective in helping many restaurants remain operating in the short term, a chunk of restaurants were left behind in the process.

“The RRF was fantastic because it helped about a third of the restaurants that needed it. But there are two thirds of the restaurants out there that did not get them,” Caroline Styne, an Independent Restaurant Coalition board member, said Friday.

“One hundred and seventy-seven thousand restaurants didn’t get this much-needed relief, and they’re the ones that have either had to temporarily close, permanently close or are just barely eking by,” she said.

Lawmakers have also been considering providing relief to various businesses that advocates and experts say have been hit hard by the pandemic and will continue to face more pressures as it drags on, including gyms and performance venues.

Brett Theodos, senior fellow and director of the Community Economic Development Hub at the Urban Institute, said there is a need for certain businesses to receive relief after a recent spike in coronavirus cases fueled by the omicron variant. Though he added the current wave “is going to be much more localized of an effect than previous waves.”

“The other bit of context now is that businesses have used up their Paycheck Protection Program, and other restaurant relief stimulus, funding support, so they’re at the point where they need their revenue to come in line with their costs, if they’re going to make it going forward,” he said.

Some advocates are also pushing lawmakers to ensure businesses in multiple industries disproportionately impacted by the pandemic receive equitable funding in new relief legislation as restaurant relief emerges as a focal point in conversations.

“They’re not any more disproportionately impacted than other types of businesses that have faced in many ways the same or, in some cases, more onerous restrictions around the ability to operate, like fitness clubs and salons and others,” said Matthew Haller, president and CEO of the International Franchise Association, which represents business across a number of industries, including restaurants, hotels and gyms.

While Haller acknowledged that restaurants do take in lower profit margins than businesses like fitness studios, he said many gyms have also taken a hit as their memberships have declined during the pandemic.

“There’s a lot of challenges for hotel owners who are significantly small businesses,” he also said, while emphasizing the downturn in business and leisure travel, adding he thinks it’s better Congress take a more “patchwork approach” in relief talks, rather than “a rifle shot.”

Pressed for a top-line number for the proposed targeted relief, Cardin wouldn’t provide a figure on Thursday. However, some reports and sources familiar with talks have placed the amount within the $60 billion range, though it’s unclear how much of the spending would be new.

Cardin said he and other members behind the effort are “looking at repurposing” funds allocated under previous relief legislation like ARPA that remain unspent, in addition to adding new funding to the overall pot.

His comments come as Republicans have voiced caution to the idea of new spending for relief efforts, though some have also signaled openness to hearing arguments for a bill aimed at certain businesses.

“I think there’s so much money out there that we’ve shoveled out the door that has not been accounted for. I would want to make sure that there was a true need and it couldn’t be met by money that we’ve already appropriated,” Sen. John Cornyn (R-Texas) said. But he added he is “open to the arguments.”

“I’m willing to listen but I haven’t heard anybody make the case,” he told The Hill on Thursday.

Sen. Mitt Romney (R-Utah) also criticized previous relief spending greenlit last year in remarks to The Hill on Thursday and instead voiced support for reallocating unspent relief funds when asked about discussion around the current bipartisan push.

“I think that we spent way too much money in March sending out checks for $1.9 trillion and we ought to repurpose much of that funding to help those entities that really need it,” he said. Though, when pressed further on if he didn’t think another round of funding was necessary, Romney added: “We’ll see what comes forward.”

A source familiar with discussions said there’s also wariness on the other side of the aisle for reprogramming unused money allocated under ARPA.

“They want to minimize what accounts are being tapped, and they want to make sure that they’re not robbing Peter to take care of Paul,” the source said.

As for when lawmakers would be able to potentially bring legislation to the floor, and how, Cardin said that has yet to be determined, given the upper chamber’s current to-do list.

“The problem is the floor schedule, and other bills that have gotten backed up,” he said, pointing to legislation like the currently stalled Build Back Better Act, a major legislative priority for Biden, as well as government funding legislation.

“We could do it as an independent bill, I think we have adequate support,” he said, though he added he’s open to attaching the push to other legislation in order to get things done.

“We’re talking. We’re open to a vehicle,” he said.