Home » $25 billion grant program will go in COVID-19 bill

$25 billion grant program will go in COVID-19 bill

WASHINGTON — Senate Majority Leader Charles E. Schumer’s plan for $25 billion in grants for struggling restaurants will be included in the COVID-19 relief bill that Congress is preparing to pass in the next few weeks.

“Restaurants and bars, like our arts venues, are the places that suffered the most because when people can’t go out, they don’t go to restaurants,” Schumer, D-N.Y., told the Capital Region Chamber of Commerce on Friday. “They need special help, not just the small business help. … It’s one of my very highest priorities.”

The new program is intended to lift the restaurant industry — one of the sectors hardest hit by the pandemic — with grants tied to revenue losses. More than 110,000 restaurants have closed around the country and others are just scraping by.

Nancy Bambera, vice president and chief operating officer of DZ Restaurants, which operate three locations in Saratoga Springs, said her revenues are down 50 percent compared to last year, although they’ve been serving takeout and diners at limited capacity.

“If this grant were to get passed, it would be a lifeline for many restaurants that can’t survive right now,” Bambera said.

The grant program run by the Small Business Administration would be available to food or drinking establishments that are not part of a chain or franchise operating more than 20 locations doing business under the same name, according to an aide. The grants would cover the difference between a restaurant’s revenues in 2019 and revenues in 2020. A cap on the size of the grants has not yet been set.

Restaurants could use the grants to cover payroll, mortgages or rent, to set up outdoor seating, provide personal protective equipment, employee paid leave, food and other supplies, or cover debt and other expenses, the aide said. Businesses that received Paycheck Protection Program loans are expected to be eligible. Details of the program are still being finalized.

Schumer acknowledged the program is “expensive,” but he argued closure of thousands of mom-and-pop restaurants was more harmful to the economy.

During the pandemic, the hardest-hit businesses have been the leisure and hospitality sector as well as low-wage and less-educated workers and people of color, the New York Federal Reserve reported in December. Across the region, leisure and hospitality businesses — like restaurants, bars and hotels — lost the most jobs — more than 750,000 — from February to April. About 50 percent of those jobs had returned as of October.

Restaurants already received some special consideration from Congress, which in December allowed restaurants to get larger second-draw forgivable Paycheck Protection Program loans than other business types.

But many restaurant owners have been reluctant to take the PPP loans, said Jason Pierce, head of the Albany Restaurant Association.

“I think you have a tremendous number of restaurant owners who have been hesitant to take advantage of the PPP for fear that they might be required to pay back those funds and you’re talking about people who are already in debt because of COVID,” said Pierce, who owns Savoy Taproom in Albany, which is currently open only for takeout, and is developing a second Albany restaurant. “Restaurants need a bailout.”

Schumer has been working on approving more targeted relief for restaurants for months through various legislative proposals. The $25 billion program is far smaller than the $120 billion program that Democrats proposed and restaurant groups advocated for this summer and the U.S. House of Representatives approved in an earlier coronavirus relief bill.

Similarly, he championed legislation that established a grant program to help performing arts venues in the most recently passed COVID-19 package.

Schumer and House Speaker Nancy Pelosi, D-Calif., have already taken steps to pass Democrats’ $1.9 trillion coronavirus relief proposal through a budget process called reconciliation, which would not require Republican votes. GOP members countered Monday with a $600 billion proposal, which Democrats have dismissed as too small.

Passing the $1.9 trillion plan is a top priority for President Joe Biden.

“We hope Republicans will join us, but we are not going to dilute this,” Schumer said of the coronavirus package. “We are moving forward under the reconciliation. That is what President Biden wants us to do and that is what we’re doing.”