By Victor Reklaitis
The restaurant industry’s largest lobbying group is working to ensure that Democrats’ big COVID-19 relief package doesn’t leave out eateries at the last minute, as the organization also says that it expects more aid for the hard-hit sector will be necessary.
The National Restaurant Association’s executive vice president of public affairs, Sean Kennedy, sent a letter to top U.S. lawmakers on Tuesday calling for “prompt passage of the American Rescue Plan,” which includes $25 billion for a “Restaurant Revitalization Fund.”
Kennedy said Wednesday will bring the launch of an “all-out grassroots activation nationwide” in which people in the industry contact their elected officials about supporting the rescue legislation, which is now before the Senate after passing the House last week.
“We view this as an incredibly strong step,” Kennedy told MarketWatch. “I suspect that more is going to be needed, but let’s focus right now on what’s in front of us — $25 billion will definitely help tens of thousands of restaurants.”
The $25 billion in aid represents a large decline from the $120 billion in relief that was proposed months ago in a bipartisan bill known as the Restaurants Act.
Restaurant operators are due to be eligible for the relief if they run no more than 20 locations and aren’t publicly traded, according to the text of the bill passed by the House . Those restrictions come after Paycheck Protection Program loans last year went to some larger businesses and publicly traded companies, leading to a backlash and returns of the money .
“Our view is that all restaurants that can demonstrate that they’re suffering should have equal access to funding,” Kennedy said. “That said, we understand and appreciate the approach of the sponsors of the Restaurants Act — to target it for smaller operators.”
The National Restaurant Association, whose membership includes big chains, is among the business groups opposed to including a provision in President Joe Biden’s $1.9 trillion aid package that would raise the minimum wage to $15 an hour. That provision was shot down last week by the Senate’s parliamentarian .
“We’re not going to get into the tactics of, you know, ‘Will they try to overturn the parliamentarian?'” Kennedy said. “Our message is solely based on the substance. The Raise the Wage Act — increasing the minimum wage to $15 over five years nationwide, eliminating the tip credit for millions of tipped workers, and doing nothing to allow for tip pooling with the back of the house — represents an impossible challenge for restaurants that are struggling to survive just under the current economic conditions.”
Restaurant and food-service sales were down $255 billion from expected levels between March 2020 and January 2021, according to the industry group. It also estimates that 2.5 million industry jobs were lost by the end of 2020, as 110,000 eateries closed.
Some 32% of restaurant operators think it will take seven months to a year for their business conditions to return to normal, 29% think it will take more than a year, and 10% of operators say business conditions will never return to normal for their restaurant. That’s according a National Restaurant Association survey of about 3,000 operators conducted last month.
The Independent Restaurant Coalition, another industry group, has urged the Senate to join the House in passing the relief package with $25 billion in grants for eateries as well, saying in a statement over the weekend that it would protect 11 million jobs.
Meanwhile, other sectors aren’t set to get targeted aid, leading groups such as the Community Gyms Coalition to call in a Monday letter for “significant support for fitness facilities in the American Rescue Plan Act.”
This report was first published on March 2, 2021.