The National Restaurant Association penned a letter to President Donald Trump and congressional leaders Wednesday outlining a dozen steps the administration and Congress could take to provide relief and aid recovery during what’s quickly become a sobering time for the nation’s million restaurants and 15.6 million employees.
The Association said economic impacts from COVID-19 on America’s second largest private sector employer could reach at least $225 billion during the next three months, with 5 million to 7 million jobs lost.
“We are revising our business model to provide meals in different ways, takeout, delivery, safety-enhanced dine-in, but we are facing economic headwinds that will lead many restaurants to shut down operations, lay off workers, and end service in our communities,” Executive Vice President of Public Affairs Sean Kennedy said in a statement. “Taken together, these proposals will ensure that restaurants have increased liquidity and access to necessary financing to help the industry and its employees recover.”
The Association proposed three separate categories of protection for industry restaurants and employees in the letter: directed/targeted financial relief; loans/insurance options for impacted small businesses; and tax measures.
It said direct relief should include a Department of the Treasury-established $145 billion restaurant and foodservice industry recovery fund to help cover operations and pay employees; a proposed $35 billion community development block grant for disaster relief for regions and communities especially hard-hit—similar to the program deployed to help areas following the 9/11 attacks; and assistance in allowing businesses to defer mortgage, lease, and loan obligations.
The Association noted loan and insurance protections should include $100 billion in federally backed business interruption insurance to help sustain businesses and their employees over an anticipated long-term recovery; establishing a new federal loan program to backstop lost revenue to be provided if an employer keeps its workers on payroll and supports sick leave requirements; a $45 billion expansion in affordable federal and conventional loans; and $130 million in disaster unemployment assistance that will aid employees with financial assistance during interrupted employment because of closures or hardships.
On the topic of tax programs, the Association said efforts should include a fix to the Qualified Improvement Property (QIP) technical correction, which was a drafting error in the 2017 tax bill that would help facilities across the country fund improvements and hire local vendors and service providers; delay and forbearance provisions for certain tax obligations to assist already tight cash flow during the crisis; tax credits for businesses that retain employees during the hardship; reduced credit card fees, and a temporary payroll tax cut to stimulate activity.
“The National Restaurant Association represents one of the cornerstones of every community—a restaurant that Americans call their own. From nationally known chains, to favorite local independents, to corner diners, we are an industry that is the first stop for individuals looking to nourish themselves and their families,” the Association wrote in the letter.
The Association applauded regulatory efforts to keep Americans safe, such as states ordering dine-in shutdowns, but rightfully noted these aggressive steps have hurt an industry “based on welcoming everyone through our doors.”
“The restaurant industry is one of low margins, tight cash flow, and a workforce that depends on us for their livelihood. Without aggressive and immediate action from the federal government, many restaurants that are a staple of local communities will simply never resume service,” the Association said.
“In the coming days, the Association will submit additional recommendations to address the challenges confronting our restaurant owners and operators as this situation rapidly unfolds,” it added.
On Tuesday, the President said he spoke with several restaurant companies, including Subway, McDonald’s, Chick-fil-A, and Yum! Brands, and encouraged them to keep their drive thrus open.
According to CNBC, one executive asked the White House to support a fund that would provide extra cash flow to help small businesses. A source said Trump responded by saying, “I think you’re really going to like what we’re doing.”
CNN also reported discussions centered on an $850 billion economic stimulus package that includes aid to small businesses, although that plan has received pushback from Democrats.
Additionally, Treasury Secretary Steven Mnuchin indicated that the White House wants to send checks to Americans immediately. Mnunchin didn’t disclose an amount and said he will discuss that matter with Republicans, although $1,000 has been floated by several pundits.
“We’re looking at sending checks to Americans immediately and what we’ve heard from hardworking Americans, many companies have shut down, whether it’s bars or restaurants, Americans needs cash now and the president wants to get cash now,” Mnunchin said during a briefing. “And I mean now, within the next two weeks.”