Financing

PPP to provide restaurant aid again under Congress' compromise aid plan

The bipartisan measure also ensures the deductibility of forgiven earlier loans.
Photograph: Shutterstock

Congressional leaders have agreed on a federal relief measure that will provide at least some of the aid restaurants say is  essential for keeping the industry afloat as it  contends with the the coronavirus pandemic.

The measure includes a restart of the Paycheck Protection Program (PPP), the lifeline that enabled many operators to keep their doors open during early months of the crisis.  The amount of funding allocated for the restart was not revealed by Senate Majority Leader and Kentucky Republican Senator Mitch McConnell.

Indeed, few particulars of the bipartisan compromise measure have yet to come to light Many  rank-and-file senators and representatives complained about being kept in the dark while Congress’ top four officers negotiated over the weekend.

Several measures favored by the restaurant industry appear to be included in the bipartisan agreement, according to senators who pushed those provisions. Those provisions include re-instating the deductibility of business expenses that were paid with forgiven PPP funds.  The  Internal Revenue Service had disallowed those deductions in April, saying that reimbursed business expenses cannot be written off under current tax rules. The industry had complained that the puzzling move by the IRS would subject restaurants to thousands of dollars in unforeseen tax charges when they filed their 2020 returns.  

Not included is a measure the industry had requested, a provision that shielded restaurants and other businesses from liability lawsuits stemming from their efforts to safeguard employees and guests.  That provision was reportedly scuttled by Republican lawmakers in exchange for Democrats dropping their demand that funding be earmarked by the agreement for financially strapped state and local governments.

The parties reached agreement on other controversial portions of the plan, including how much unemployment benefits will be sweetened ($300 a week) and how much aid would be given to most citizens as a one-time benefit ($600).

"We can finally report what our nation has needed to hear for a very long time: More help is on the way," McConnell said in a video statement.

Complete texts of the agreement were hard to obtain on Sunday night.  The final document is expected to be voted on by the House of Representatives late Sunday or early on Monday, and then passed to the Senate. Because the leadership of both chambers essentially hammered out the proposal, passage is widely expected. It will then be forwarded to President Trump’s desk for his signature.

 

 

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