Restaurants need $240 billion bailout as job losses reach 8 million
Source: Nation's Restaurant News
The National Restaurant Association announced a multi-pronged “Blueprint for Recovery” plan for restaurants that includes a $240 billion federal recovery fund as the association unveiled Monday a bleak picture about the state of the industry during the COVID-19 pandemic.
Roughly 8 million workers have been laid off or furloughed since stay-at-home orders swept the nation in mid-March to stem the spread of the highly contagious novel coronavirus
The industry is on track to lose about $80 billion in revenue by the end of April with industry-wide losses pegged at $240 billion through the end of 2020. Those losses assume a gradual reopening of the economy in June. As such, the NRA is also asking Congress for a healthy restaurants tax credit to offset the revenue losses tied to reopening dining rooms with limited capacity to maintain social distancing.
"With several states planning to lift movement restrictions in the coming weeks, and many Americans reticent to venture into public, we feel it is critical to bolster restaurants’ efforts toward ensuring public health," the NRA states.
Some restaurants might not reopen if targeted funding doesn't happen quickly, the NRA said.
Four in 10 restaurants have closed their doors due to the pandemic with “some with no hope of reopening," according to the latest NRA member survey.
The association said The Restaurant and Foodservice Industry Recovery Fund will give restaurants a fighting chance to survive what is expected to be a prolonged recovery.
It would provide grant money totaling $240 billion to restaurants open before March 15, 2020.
“The restaurant industry has been the hardest hit by the coronavirus mandates – suffering more sales and job losses than any other industry in the country,” the letter, signed by executive vice president of public affairs Sean Kennedy, states. “As past recoveries have proven, we will be one of the slowest to bounce back.”
The recovery program is “desperately needed” to augment existing federal relief programs such as the $349 billion Paycheck Protection Program, the NRA states.
Instead of applying through local banks like the PPP, the NRA suggested that restaurants would request aid through a new portal at the Internal Revenue Service.
Restaurants would apply for grants “up to, but no more than, the prior year-on-years quarterly gross revenue,” the NRA said.
The money would be used for expenses such as payroll, rent, utilities, ongoing debt obligations, business insurance premiums and vendors.
The association also asked Congress to provide help for restaurants to cover reopening costs. Aid would come in the form of a “Healthy Restaurants” tax credit or grant program to help offset reopening expenses such as modifications made to dining rooms to accommodate social distancing and purchasing of personal protection equipment.
The association also wants the federal governmnent to temporarily allow restaurants during the COVID-19 crisis to accept food stamps under the SNAP program, which is currently not allowed.
“As millions of Americans are struggling to feed their families during this unprecedented crisis, the SNAP CARRY Act will provide more vital food access points for hungry people and the ability for restaurants to continue serving Americans,” the NRA states.
The NRA urged Congress to act quickly as more than 60% of restaurant owners say that existing federal relief programs including the PPP will not enable them to keep their employees on payroll throughout the
“The industry is uniquely vulnerable to economic disruption, and for a variety of reasons, the previous federal relief programs have not provided practical relief to save the industry from ruin,” NRA states.
The association also reminded Congressional leaders of key revisions the organization requested of the PPP, which ran out of funds last week.
The forgivable loan, which opened to a crush of applicants April 3, was designed to allow small businesses to retain or rehire workers. The loan can be forgiven if at least 75% is dedicated to payroll.
The association wants Congress to lower the cap spent on payroll so more funds can be utilized for expenses like lease payments.
On Monday, Congress and the White House were close to signing a deal to "provide $450 billion to replenish" emergency relief funds for small businesses, according to the New York Times.