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New federal aid plan promises limited restaurant relief

The PPP would be restarted, and business would be protected from some COVID-related lawsuits.
Photograph by Jonathan Maze

With restaurants pleading for another round of federal aid, a bipartisan group of Congressional lawmakers has included limited assistance for the industry in a new $908 billion relief proposal put forth today on Capitol Hill.

Among the included provisions are a re-up of the Paycheck Protection Program (PPP), a lifeline for many restaurants earlier in the pandemic, and protections against lawsuits alleging a restaurant or other business failed to adequately protect employees or guests from contracting coronavirus.  

It would also add $300 per week to unemployment payments.

The restaurant industry has been pushing for considerably more help, including direct financial relief of up to $240 billion, or what forecasters have said the business is likely to lose in sales this year because of the COVID crisis. Its advocates have repeatedly warned that much of the industry could be wiped out if direct aid is not forthcoming.

All told, the new plan would earmark $288 billion for small businesses, including the restart of the PPP.  That compares with the $670 billion that was earmarked just for the PPP when the program launched at the start of the pandemic.

“Once again, restaurants are dangerously close to being locked out of relief from Washington,” Sean Kennedy, EVP of public affairs for the National Restaurant Association, said in response to today’s bipartisan proposal. 

He called it “an excellent starting point,” but suggested it’s not the lifeline needed by the industry. “We look forward to working toward a solution that prevents thousands of restaurants from closing this month,” Kennedy said.

Still, the emergence of any aid proposal came as a surprise to many watchers along the Potomac. Efforts to hammer out a new stimulus and relief plan on the scale of the CARES Act, the omnibus legislation that created the PPP, had largely been suspended.

Those conversations were taking place between Nancy Pelosi, the Democratic Speaker of the House of Representatives, and Steve Mnuchin, secretary of the U.S. Treasury and a proxy for the Republican Party in the discussions.

After those negotiations broke down, Mitch McConnell, the Senate Majority leader, put forth his own relief plan. It called for a fraction of the multi-trillion-dollar aid package that Pelosi and Mnuchin were attempting to negotiate.

The new plan, still in outline form, was jointly drafted by rank-and-file lawmakers from both chambers of Congress, without the involvement of party leaders from either the Senate or the House. They call themselves the Problem Solvers Caucus and say the group includes 25 Republicans and 25 Democrats.

Because support from Congressional leaders is necessary for the advancement of a bill, the proposal was met with skepticism that it would ever make it to a vote in the House or Senate. After the bipartisan proposal was floated, Mnuchin said that he and Pelosi may touch on the measure in conversations that were already scheduled for Tuesday, but their focus would be keeping the federal government in operation after Dec. 11. On that day,  the government runs out of money. A shutdown will be necessary if new funding isn’t appropriated.

Hopes that the proposal will rekindle negotiations on any aid package were raised at press time by a joint announcement from Pelosi and Chuck Schumer, the New York Democrat who serves as Senate minority leader, that they would support the $908 billion plan as the foundation of a new aid package. Their decision was a major concession in that it sets the starting point for negotiations at a much lower point than the multi-trillion plan the Democrats had initially favored.

McConnell had spoken against the $908 billion plan late on Tuesday, remarking that Democrats were more interested in making a point than in making a law. He has yet to respond to Pelosi and Schumer's endorsement of the plan.

The new aid plan is actually an 18-line table listing possible initiatives and an estimate of their cost.  Some proponents have described it as a possible bridge to the new administration. President-elect Joe Biden has indicated that he’d favor a comprehensive new aid package that directly helped small businesses.

UPDATE: This story has been updated to include the endorsement of the plan by Pelosi and Schumer at mid-afternoon on Wednesday. 


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