On Sunday, the U.S. Senate failed to move forward on a reportedly $2 trillion economic stimulus package after Democrats said the legislation catered to large corporations and not the working class.
The package needed 60 votes to pass, but received just 47. Democrats are not pleased with $500 billion—referred to by many as a corporate “slush fund”—in loans and loan guarantees for large companies without enough guidelines.
The news is not welcomed by small businesses and consumers, which are both supposed to receive financial assistance as part of the bill. CNN reported that senators are apparently close to agreeing to $250 billion each for direct payments to American adults and expansion of unemployment insurance. That reportedly includes $1,200 in direct payments to most adults and $500 to most children. Also on the table is $350 billion to help small businesses meet payroll.
Treasury Secretary Steve Mnuchin said the stimulus package is meant to last 10 to 12 weeks. After that period, lawmakers would reevaluate and see if another package is required.
House Speaker Nancy Pelosi announced that the House of Representatives will introduce its own economic stimulus package, which complicates matters further.
The discussions are considered the third phase of COVID-19 relief. The second portion was passed last week in the form of a $100 billion law that expanded paid sick leave for workers, added free testing, and added more dollars for unemployment benefits, food assistance programs, and Medicaid.
Many brands and associations have pleaded to the federal government to pass a stimulus package soon to bring relief to small businesses.
Goldman Sachs predicted that about 2.25 million Americans filed for their first week of unemployment benefits last week. That would be up from 281,000 Americans the week before last.
The National Restaurant Association said in a letter to the federal government that the restaurant industry could see losses of $225 billion in the next three months, along with the loss of 5 million to 7 million jobs. The Association asked for a $145 billion restaurant and foodservice industry recovery fund to help cover operations and pay employees.
In the letter, Mark Allen, president and CEO of the International Foodservice Distributors Association, said that foodservice distributors typically operate at a 2 percent margin or less, meaning a large change in sales can have a significant impact. He also noted that the foodservice distributor industry is valued at $280 billion, including 15,000 distribution centers, 350,000 employees and more than 153,000 vehicles.