$55B aid package for restaurants & small businesses

The House passed a $55 billion package of aid to restaurants and other pandemic-ravaged industries following months of stops and starts, sending it to the Senate for negotiations with a rival bipartisan package that takes a different approach.

The nearly party-line vote Thursday was 223-203, with six Republicans crossing the aisle to back the bill and four Democratic "no" votes. Seven Republicans who had cosponsored an earlier version of the bill dropped off after the revised version was released and did not end up voting for the bill (H.R.3807). 

The House legislation would provide $42 billion to replenish a fund for struggling restaurants, food trucks, bars, caterers, brewpubs, bakeries and more after the money ran dry quickly last year. The measure would tack on another $13 billion for small businesses that suffered revenue losses of at least 40 percent during the pandemic, without regard to what industries they operate in, with grants capped at $1 million each.

That's a key difference with newly unveiled Senate legislation that would set aside $8 billion for specific groups on top of $40 billion for restaurants, bars and other food service establishments. That $8 billion would be carved up into pots of money directed to gyms and fitness centers, live entertainment venues, motorcoach and ferry operators, minor league sports teams, and small businesses that were cut off from customers and suppliers due to border closures.

House Democrats defended their proposal as the more appropriate way to help struggling businesses. House Small Business Chair Nydia M. Velázquez called the new $13 billion fund an "industry-neutral relief program for the small businesses most impacted by the pandemic ... rather than picking winners and losers." 

Congress provided $28.6 billion for restaurants in pandemic relief legislation last year, but only one-third of those that applied were able to receive a grant before funding ran out. Velázquez, D-N.Y., said 177,000 applicants were left out as a result.

The restaurant relief portion of the House and Senate bills are similar, despite the $2 billion gap. To prevent another issue on funds running dry, both bills stipulate grants would be reduced by equal percentages if there isn't enough to provide full grants to all applicants.

Velázquez stressed the House bill would be paid for by recovering fraudulent pandemic-era spending. But Small Business ranking member Blaine Luetkemeyer said federal investigators wouldn't be able to find enough money. He cited data provided to the committee that only about $8 billion had been recovered from misspent grant funding. 

"This process takes time and it's not going to get all the dollars back," said Luetkemeyer, R-Mo. "It's not near enough to cover the $55 billion this program wants to spend."

He criticized Democrats for bringing to the bill to the floor without a committee markup or Congressional Budget Office score, and argued it would only further stoke inflation and harm the businesses it's intended to help.

"If Democrats were serious about helping restaurants and small businesses, they would have called for an end to the ever-changing mandates and lockdowns that forced so many small businesses to close their doors," Luetkemeyer said.

The White House didn't request any additional restaurant or small-business aid as part of its $22.5 COVID-19 relief request, which is dedicated to health care needs such as antiviral pills, vaccines and testing capacity. The Office of Management and Budget didn't submit a formal statement of administration policy prior to the House debate, as it usually does.

But an administration official, speaking on condition of anonymity, seemed lukewarm to the idea of providing new industry-specific relief. The official pointed to strong job growth and a low unemployment rate as well as "a historic amount of relief to small businesses, including restaurants" already delivered.

"We continue to engage with Congress on ideas for additional targeted relief, if needed," the official added.

There's also a question of how far legislation that isn't completely offset can get through the evenly divided Senate.

Senate Small Business Chair Benjamin Cardin (D-MD), introduced his chamber's version (S 4008) with Sen. Roger Wicker (R-MS), as a stand-alone bill after their plan to attach it to a $10 billion COVID-19 supplemental bill (HR 4373) for vaccines, therapeutics and tests was dashed when Democratic leaders decided not to open the measure to amendments.

That decision led to a standoff with Republicans, and senators began leaving town Thursday without taking up the pandemic aid bill, which itself required a hard-fought compromise over offsets.

Some of the original offsets Cardin and Wicker identified for their small business aid bill were pulled for the $10 billion supplemental. The bill they unveiled Wednesday only has $5 billion in offsets from tapping unspent funding in the lapsed pandemic-era Paycheck Protection Program, which provided nearly $800 billion in forgivable business loans.

"I wish we could offset more. But it's a matter of getting the votes," Wicker said.

Cardin is open to the House offset of recapturing fraudulent funds but said he’s been told the CBO may not estimate much savings from that. “The scoring of that is squishy," he said.

Cardin said Senate Majority Leader Charles Schumer (D-NY) has promised a stand-alone vote on the Senate restaurant aid bill after foreclosing the amendment option, though it could also still be attached to another moving package. "We want to get the first train to the finish line," he said. 

Cardin and Wicker defended the Senate's approach to doling out aid rather than opening the money up to all businesses with a demonstrated need, while noting they’re ready to negotiate with the House. 

"I think making it more open is going to end up costing more in the long run. But I'm certainly happy to deal with our House counterparts on that issue," Wicker said.

Cardin said he’d like to “pre-conference” the bills and resolve differences with the House so whenever the Senate is ready to move it can take up a version that can pass both chambers.

One concern Cardin has with the House’s industry-neutral approach is it could draw far more applicants than there is money available. Senate negotiators have thoroughly vetted the needs of the industries provided for in their bill, he said.

Cardin also worries about “unintended consequences” in the House approach. "There are industries that could have had a substantial loss of revenue that we would not particularly want to include,'" he said, declining to elaborate. "I think our approach is better."

But Cardin said the differences aren’t insurmountable, saying the House bill is “90 percent of what we want.”

Rep. Dean Phillips (D-MN) one of the lead House negotiators, said he did not see “anything of great substance” dividing the two chambers. The greater challenge will be getting 10 Republican votes in the Senate, which Cardin admits he’s not confident he and Wicker have yet on their version. 

Unlike in the House, the Senate bill doesn't include a prohibition on aid to businesses with violations of wage laws on their books, which was a demand of progressives like Rep. Rashida Tlaib (D-MI).

Cardin said that provision would likely be difficult to get through the Senate, but he would talk to Republicans about it since adding it was key to House passage.

The Senate's industry-specific bill would provide $2 billion each to gyms, live event operators and transportation services like buses and ferries, and $500 million for minor league sports teams. 

It would provide more than $1.4 billion for small businesses located near land ports of entry that were closed due to the pandemic, and $85 million for small businesses in Alaska, Washington and Minnesota communities that weren’t accessible when the border was closed. 

With exceptions, applicants for the various pots of money generally would have to demonstrate they've suffered revenue losses of at least 25 percent below pre-pandemic levels, a less onerous requirement than the House bill's requirement that businesses demonstrate a 40 percent revenue drop.

Grants for gyms and fitness center operators would be capped at $2 million, or $1 million per physical location; live venue operator grants would also be capped at $2 million each.

Border-adjacent firms would be eligible for up to $350,000 or half of their 2019 gross receipts, whichever is less, if they have 25 or fewer employers. Of the $1.4 billion, at least one-third would be set aside for businesses within 50 miles of the Canadian border, and at least one-third for those within 50 miles of the Mexican border.

Of the remaining $85 million, $75 million would be set aside for Alaskan communities near the U.S.-Canada border that were cut off from Canadian towns where they typically would obtain supplies like food and medicine.

Minor league sports teams would have to demonstrate a 50 percent or more revenue loss, though they could receive up to $5 million each. But the bill would disqualify teams owned by individuals that have a greater than 10 percent stake in a separate major league franchise, which is problematic for Sen. Tammy Baldwin (D-WI).

She said that as currently drafted, the bill wouldn't benefit the Milwaukee Admirals, a minor league hockey club. That's because the Admirals' owner is also a minority owner of the Milwaukee Brewers major league baseball team. But the bill doesn't make an allowance for circumstances where the ownership spans two different sports.

Cardin, who spoke to Baldwin earlier Thursday about her concerns, said the hockey team “made a pretty passionate plea, [but] the challenge is if it has ownership by major league teams.”