President Donald Trump ended stimulus negotiations with Democrats Tuesday, effectively killing the restaurant industry’s chance at direct funds before the election.
In October, The U.S. House of Representatives passed a $2.2 trillion stimulus package that included the $120 billion RESTAURANTS Act. The grant program is intended to target small, local restaurants to cover costs such as payroll, benefits, mortgage, rent, utilities, maintenance, supplies, food, and debt obligations. That specific piece of legislation has support from 209 House members and 40 senators.
The bill also includes a second round of eligibility in the Paycheck Protection Program, expansion of the Employee Retention Tax Credit, $1,200 stimulus checks to most American adults, $436 million for state and local governments, and renewal of the $600 weekly increase in unemployment benefits.
But on Tuesday afternoon, Trump tweeted that he was instructing aides to walk away from the negotiation table until after the election. With the White House offering a $1.6 trillion deal, Trump tweeted that House Speaker Nancy Pelosi wasn’t negotiating in good faith. He also told Senate Majority Leader Mitch McConnell to focus on the confirmation process of Supreme Court justice nominee Amy Coney Barrett as opposed to the stimulus talks.
However, late Tuesday night, Trump appeared to reverse course on social media. He tweeted that the House and Senate should approve $25 billion for airline support and $135 billion for the PPP with unused funds from the CARES Act. Trump then said he’s ready to sign a standalone bill that contained $1,200 stimulus checks.
The reversal doesn’t include passage of funds for the restaurant industry. The Independent Restaurant Coalition, which has pushed for the RESTAURANTS Act, said it was disappointed with Trump’s move.
"If Congress and the President walk away from negotiations, even more of our neighborhood restaurants will go out of business,” the organization said in a statement. “Restaurant employment decreased in nine states in the last available report, and this industry remains the largest contributor to national unemployment. We cannot afford five or six more weeks of decreased revenue, more debt, and uncertainty about colder weather.”
In September, the foodservice industry gained roughly 200,000 jobs, but it’s still 2.3 million below pre-COVID levels. The national unemployment level has fallen a little below 8 percent, but more than 800,000 are still filing for unemployment benefits each week.
Federal Reserve Chairman Jerome Powell, speaking at the National Association for Business Economics annual meeting on Tuesday, stressed the importance of passing more stimulus programs, or else the economy may shift backward.
"Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth," Powell said. "By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste."
Mark S. Allen, president and CEO of the International Foodservice Distributors Association, added in a statement: “Discussions should continue with full force between Congress and the White House regarding additional COVID-19 stimulus legislation. As restaurants continue to struggle with closings, capacity limitations, and cooler weather which will impact outdoor dining, additional support is critically needed. Restaurants need direct financial relief to weather this storm. In addition, legislation to create another round of PPP loans that would provide badly-needed liquidity and expand allowable and forgivable uses of funds to include payments to suppliers has bipartisan support in both the House and Senate. The Administration and Congress must act now.”