THE
REAL ECONOMIC SUPPORT THAT ACKNOWLEDGES UNIQUE RESTAURANT
ASSISTANCE NEEDED TO SURVIVE (RESTAURANTS) ACT OF 2020
Congressman Earl Blumenauer ■ Third District of Oregon ■ blumenauer.house.gov
_______________
A GATHERING PLACE FOR COMMUNITY
There is perhaps nothing more central to communities large and small than their local
restaurants. It is impossible to separate a community’s character from its cuisine – from New
Orleans and Portland to New York City and Los Angeles, restaurants make a place unique.
Whether it’s food carts or a Michelin-starred institution, restaurants provide a space
where people from different backgrounds, races, ethnicities, and socioeconomic status can come
together in an increasingly divided world. They are places where families and friends celebrate
or reconnect and where someone can have “the usual” or explore the world’s flavors without
leaving their neighborhood. Restaurants play host to everything from first dates to proposals and
many of life’s important memories. The local restaurant industry supports Top Chef Masters,
first jobs, and parents working double-shifts to give their children a brighter future. Restaurants
are the beating heart of a community but the COVID-19 pandemic is putting their survival in
jeopardy.
ECONOMIC VALUE OF RESTAURANTS
Since the COVID-19 pandemic upended American life in mid-March, the vast majority
of independent, local restaurants have closed their doors, laid off most of their employees, and
are now wondering what they will look like after the pandemic, if they can even reopen at all.
While independent restaurants employ more than 11 million people, it isn’t just restaurants and
their employees that are hurt by the pandemic. The food supply chain touches every corner of the
country and every congressional district. From farm workers and fishermen to truck drivers and
restaurant workers, the restaurant industry provides a $1 trillion annual boost to the United
States’ economy, to say nothing of supporting tens of millions of individuals’ and families’
livelihoods.
Unlike any other industry, restaurants have been uniquely devastated by COVID-19.
Social distancing measures and stay-at-home orders have drastically reduced demand, so much
so that the restaurant sector is now the top contributor to unemployment rolls across America. In
April alone, 5.5 million restaurant workers lost their jobs, accounting for 27% of total job losses
in the month. Today, four in ten restaurants are closed and the remaining open restaurants are
grappling with revenues that have been decimated and will remain so until COVID-19 is
eradicated.
Recent surveys found that COVID-19 has forced operators to lay off 91% of the hourly
workforce and 70% of salaried employees. Only one in five restaurant owners subjected to state-
mandated dine-in shutdowns said they felt confident they could keep their restaurants running.
The National Bureau of Economic Research predicts that only 15% of restaurants will be able to
stay open if the COVID-19 pandemic lasts six months. All of this in an industry that already runs
on extremely thin margins.
Previous efforts to help small businesses such as the Paycheck Protection Program are
too restrictive for restaurants and do not address their specific challenges. The simple fact is that
restaurants and their employees need direct assistance to get through the end of the year, and
they need it now.
THE SOLUTION – THE REAL ECONOMIC SUPPORT THAT ACKNOWLEDGES UNIQUE RESTAURANT
ASSISTANCE NEEDED TO SURVIVE (RESTAURANTS) ACT OF 2020
Congressman Earl Blumenauer (OR-03) will soon introduce the RESTAURANTS Act of
2020, legislation to create a new $120 billion grant program to provide structured relief to
restaurants through 2020.
• The program will be administered by the Department of the Treasury and available to
food service or drinking establishments, including caterers, that are not publicly traded or
part of a chain with 20 or more locations doing business under the same name;
• Grant values will cover the difference between revenues from 2019 and projected
revenues through 2020;
• Paycheck Protection Program or Economic Injury Disaster Loan funding recipients must
subtract funds received that do not need to be paid back from the maximum Restaurant
Stabilization Grant value;
• Restaurant Stabilization Grants do not need to be paid back and funding is made available
through 2020;
• Eligible expenses include: payroll (not including employee compensation exceeding
$100,000/year), benefits, mortgage, rent, utilities, maintenance, supplies (including
protective equipment and cleaning materials), food, debt obligations to suppliers, and any
other expenses deemed essential by the Secretary of the Treasury;
• Recipients must certify that current economic conditions make the grant request
necessary, that the funds will be used retain workers, maintain payroll, and make other
payments (as specified above), and that the recipient is only applying for and would only
receive one grant;
• If a restaurant permanently ceases operations before the end of 2020, unspent funds must
be returned. If the grant award exceeds the actual end-of-year revenues the grant is
converted to a loan with a 10-year term at 1% interest;
• The first 14 days of funds will only be made available to restaurants with annual revenues
of $1.5 million or less to target local small restaurants, particularly those that are women,
veteran, or minority-owned and operated eligible entities that are owned or operated by
women or people of color; and
• The Restaurant Stabilization Act provides $300 million to administer the program – $60
million of which is set-aside for outreach to traditionally marginalized and
underrepresented communities, with a focus on women, veteran, and minority-owned and
operated eligible entities.
TIME TO ACT
Over the past two months, Congress has mustered the political will to pass more than $3
trillion of relief to most sectors of the economy – the House of Representatives just passed an
additional $3 trillion of relief. There were broad-based programs for direct individual assistance,
small business loans, and tax relief for businesses large and small. Likewise, there was targeted
relief for industries that were hard-hit by the effects of COVID-19. Yet in every piece of
legislation, restaurants have been ignored at the peril of the very communities they serve. We
can’t afford not to act. Nothing less than millions of livelihoods, hundreds of thousands of
businesses, and the fabric of our communities is at stake.
