HEROES Stimulus Bill & the Restaurant Act Finally Sees Movement

HEROES Act mostly targets independent restaurants and excludes companies that are publicly traded or considered a chain restaurant with 20 or more locations, including excluding franchisee owners as well. (Stimulus Relief for Restaurants)

The latest $2.2 trillion HEROES Act proposed by the House includes the Restaurant Act, a $120 billion relief program for independent restaurants, food services, and bars. The original House proposed stimulus was over $3 trillion compared to the Senate’s $1 trillion Heals Act, resulting in a stalemate for months. 

With the latest reduction in total cost, Treasury Secretary Mnuchin was reported to be confident the bill may be able to move forward. CNBC reported him as saying, “I say we’re going to give it more serious try to get this done and I think we’re hopeful that we can get something done”. 

The Restaurants Act was proposed back in June by Rep. Earl Blumenauer of Oregon. The program is designed to offset the expected $240 billion in lost sales by injecting $120 billion specifically for the country’s second largest industry employer. Support would include covering payroll, rent, utilities, supplies, and personal protection equipment (PPE). The funds would be a direct grant and would not be required to be paid back. With winter months approaching and outdoor dining becoming less of a viable option, bars and restaurants are wondering how they will hold on. Already, 100,000 restaurants and bars are estimated to have closed permanently, which is nearly one in six locations.

Congressman Bluemenauer sees this predicament and said, "With winter coming, independent restaurants that are holding on by a thread will face even greater challenges to survive. Congress must seize this opportunity to provide restaurants the relief they need." In addition, the bill as written, would give 14 days priority to women and minority owned businesses that ran operations with revenue less than $1.5 million. Grants would be determined by comparing year over year sales figures by quarter. 

The bill is mostly targeting independent restaurants and excludes companies that are publicly traded or considered a chain restaurant with 20 or more locations, including excluding franchisee owners as well. The National Restaurant Association, the largest lobbying arm for restaurants, released a statement on the latest House bill. Sean Kennedy, VP of Public Affairs, stated that “the House proposal denies federal support for small regional chain restaurants, as well as individual owners of small franchise restaurants. After six months of a pandemic that has brought our industry to its knees, policymakers cannot pick restaurant winners and losers for federal relief.” Kennedy referenced the Senate version of the bill that provides federal aid to all restaurants. The association also urged Congress to pass a second round of the Paycheck Protection Program and Employee Retention Tax Credit regardless if the HEROES act does not pass. “These fundamental short-term tools to help thousands of restaurants that will otherwise close as outdoor dining becomes less viable”, continued Kennedy. 

While the details are worked out of who exactly is to be included, the fact of the matter remains- this needs to urgently pass now. Restaurants and bars across the country are looking at this bill as a potential lifeline to make it to 2021 or make the hard decision to close their doors before going into further debt. Let's hope Congress doesn't keep them waiting long.