The U.S. Senate on Thursday ended the possibility of replenishing the Restaurant Revitalization Fund when a $48 billion bill to provide relief to small businesses hit by COVID restrictions could not generate enough votes to overcome a filibuster.
The bill would have added $40 billion to the RRF, which would have provided enough funding for some 177,000 restaurants that thought they’d receive aid last year but could not when the original fund ran out.
The Small Business COVID Relief Act of 2022, sponsored by Sens. Ben Cardin (D-Md) and Roger Wicker (R-Miss) had majority support, but not 60 votes to overcome a filibuster. The bill included $40 billion for restaurants and $8 billion for other industries hit by the pandemic.
The vote was a “devastating blow to the restaurant industry and small business operators,” the National Restaurant Association said.
“Restaurants that are still trying to make up for what was lost in the pandemic today are struggling with workforce shortages, record-high inflation and supply chain constraints,” Michelle Korsmo, president and CEO of the association, said in a statement. “Today’s vote will further exacerbate those challenges and result in more economic hardships for the families and communities across the country that rely on the restaurant and foodservice industry.”
The association is the majority owner of Winsight LLC, parent company to Restaurant Business.
The American Rescue Plan last year established the RRF with $28.6 billion. More than 278,000 restaurants applied for the funds but only 101,000 applications were funded before the U.S. Small Business Administration ran out of funding. The fund provided grants of up to $10 million.
“Local restaurants across the country expected help but the Senate couldn’t finish the job,” Erika Polmar, executive director of the Independent Restaurant Coalition, said in a statement. “Neighborhood restaurants nationwide have held out hope for this program, selling their homes, cashing out retirement funds or taking out personal loans in an effort to keep their employees working and their doors open.” The group estimates that more than half of the 177,300 restaurants that didn’t get a grant the first time will close in a few months.
The U.S. House had included $42 billion in the Relief for Restaurants and other Hard Hit Small Businesses Act of 2022. Republicans and Democrats could not reach a consensus of how to pay for the bills. Democrats wanted to treat the funds as emergency spending. Republicans wanted existing funds reallocated.
“Today, a Senate filibuster dashed the promise made to more than 177,000 small business owners in communities across the country,” Sean Kennedy, EVP of public affairs for the association, said in a statement. “While there are valid questions about government spending and inflation, restaurants should not be caught in the crossfire.”
Restaurants used RRF funds to pay off debt and meet payroll. The National Restaurant Association estimates it saved more than 900,000 restaurant jobs and 96% of recipients said the funds kept their locations open. The association says 62% of operators who didn’t receive a grant have accumulated additional debt and 57% fell behind on expenses.
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