White House throws cold water on restaurant industry bailout

While President Joe Biden and his team are unlikely to oppose it if lawmakers reach a deal and recognize that restaurants face a more complicated recovery than other parts of the economy, the warnings job losses, rising rents and inflated food prices have yet to convince the administration. officials that the solution is more direct funding.

Some senior aides have questioned whether the restaurant situation is really as bad as industry groups have portrayed it, people familiar with the matter said. A White House official said while the administration is “sympathetic” to the struggles of small restaurants, it “finds it difficult to commit significant new funds without better understanding how it will interact with other priorities.” such as child care and climate. And meetings between Biden’s economic advisers and restoration groups left some attendees convinced the White House had already made up its mind.

“We, at this point, don’t see a package coming out of the White House that includes small business relief that would benefit industries like restaurants,” said Sean Kennedy, senior vice president of public affairs at the National Restaurant. Association.

The policy of providing another round of restaurant helpers was always going to be tricky. Any deal would require the support of 10 Republicans in the Senate. It’s now gotten more complicated among Democrats too, as a wave of blue state governors drop mask mandates, restaurant capacity caps and other restrictions in a bid to signal a return to normalcy. . Adding to the hurdles are record levels of inflation that are fueling anxiety across the party about any additional spending.

“There’s next to nothing the economy needs from the federal government,” said Jason Furman, one of former President Barack Obama’s top economic advisers who is close to White House Biden. “The economy is booming and it’s going to roar even more in the months to come.”

The debate over additional Covid relief funding comes as the White House tries to chart a clear path out of the pandemic in hopes of boosting Biden’s poll numbers and avoiding midterm annihilation . Biden relied heavily on his economic record, crediting his stimulus package with fueling a rapid and broad-based recovery. As the number of Covid cases plummets, the White House is also facing pressure from Democrats to effectively declare the health and economic crises over.

Restaurants and their allies on the Hill warn the industry is being left behind, especially after a messy deployment of the initial aid package last year. Federal data shows that the sector – which is the second largest private employer in the country – has not added yet about a million jobs lost during the pandemic, and sees fewer customers and higher rents.

Only a third of restaurants that applied for part of the $28.6 billion set aside for the industry in last spring’s Covid relief bill said they received it before the money ran out, which spurred the current push to add an estimated $48 billion more to the pot. The restaurant’s money was delivered on a first-come, first-served basis, and the funds ran out within weeks.

Some frustrated Democrats say the White House is too worried about the perception that it is pumping more money into the economy, arguing that a targeted relief program would be a lifeline for restaurants and nowhere near enough. important to drive up inflation further.

“Washington unfortunately uses too much of the lens of optics and too little of the lens of principle,” said Rep. dean phillips (D-Minn.), who has championed restaurant aid in the House and discussed it with others on Capitol Hill and White House officials. “It’s a matter of principle.”

“There are literally restaurants that have received funding, and across the street another, equally qualified, has been approved and got nothing. I think it’s preposterous,” said Phillips, who owns his own businesses that haven’t asked for or received help.

Proponents of additional aid are pinning their hopes on a last-ditch effort by the Sens. Ben Cardin (D-Md.) and Roger Osier (R-Miss.), who are working on a bipartisan deal as part of the government’s massive funding package next month. But those talks have dragged on for weeks, and lawmakers and their aides say privately that it’s unclear whether they can reach a deal that could pass the Senate.

Asked specifically about restaurant help, Sen. Richard Shelby (R-Ala.), the top Republican on the Senate appropriations panel, noted that Congress has already doled out aid to struggling industries.

“We’ve been through this once and we’ve been through the airlines once as well. It’s a matter of how much money we’re going to spend,” Shelby said.

Administration officials, meanwhile, fear further complicating the path to a bipartisan government funding deal, which could include at least $30 billion for the public health components of the Covid fight. Health officials have stressed they risk being caught off guard for another surge if the money needed to stockpile vaccines and therapeutics is not quickly obtained.

Jeff Zients, the White House’s Covid-19 response coordinator, played a lead role in writing the funding request, a sign that the administration is primarily focused on public health needs, a source said. person knowledgeable about the subject.

In an interview, senior White House adviser Gene Sperling argued that the administration’s existing investments have proven sufficient to help weather the setbacks of the pandemic.

“There was always a dual purpose behind the US bailout,” said Sperling, who oversees the package’s implementation. “Which was both to ensure that we revived a strong economy, a strong jobs and labor market and to ensure that there was the firepower and flexibility to have a resilient recovery that could overcome challenges like we saw with Delta and Omicron.

He added that the stimulus also sent $350 billion to states and localities, which could be repurposed to support restaurants or other small businesses as needed.

“They absolutely have the flexibility and the eligibility to use the funds for these purposes,” he said.

Still, several Democrats insist there is a bipartisan appetite for more money for the small business agenda, which remains one of the most popular elements of congressional stimulus efforts. It also represents a chance to correct the problems that plagued the first rounds of relief.

The federal restaurant relief fund – as well as the much larger Small Business Loan Relief program – have come under fire for doling out aid to franchises of big companies like Subway or McDonald’s. Large companies, usually with more resources to navigate the web of government bureaucracies, often applied and were among the roughly 100,000 funds approved, leaving fewer for many smaller companies.

The uneven distribution meant approximately 177,000 bars and restaurants who sought help in vain have had to weather the pandemic without federal support, industry advocates have told lawmakers and administration officials. Moreover, those who survived are now at a competitive disadvantage – struggling to stop staff leaving for establishments which have received aid and can now offer higher salaries to employees.

“I would like us to include some of the lessons learned from the PPP, and also make sure that the potential relief for restaurants – that we really make sure that we focus on the actual small businesses that need it the most,” Rep. . Alexandria Ocasio-Cortez (DN.Y.) told reporters. “More corporate franchises on the front line.”

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Cecil N. Messick