Restaurants and bars rush to apply for new federal aid program
By Annie Karni
A total of 186,200 restaurants, bars and other eligible businesses applied for help from a new $28.6 billion federal aid program in the first two days it was accepting applications, President Joe Biden said Wednesday, indicating huge demand from a struggling industry for a limited pot of relief funds.
The Restaurant Revitalization Fund was created by Congress as part of the $1.9 trillion relief bill passed in March and began accepting applications online on Monday.
“That’s a staggering number,” Biden said of the opening flood of applications that came in from all 50 states. Business owners who were hit hard by the coronavirus pandemic can apply for grants of up to $10 million.
The return of the restaurant industry will serve as a major test of Biden’s goal of bringing the country back to some version of normal by this summer, both for 2.3 million people whose restaurant jobs disappeared during the pandemic and for vaccinated Americans eager to take advantage of newfound freedoms to go out and socialize again.
“Right now, only about a quarter of the restaurant owners expect to return to normal operations in the next six months,” Biden said. “We can do much better than that.”
Few sectors of the economy suffered the financial blow of the coronavirus pandemic last year as much as the restaurant industry, which saw business plummet with the shuttering of indoor dining in many states and closures of higher-priced restaurants that were not able to easily shift to takeout options. More than 110,000 restaurants and bars temporarily or permanently closed last year, according to the National Restaurant Association.
Biden’s aid plan for restaurants, while limited, is more robust than what has been available to them in the past. Restaurants were not included in the coronavirus relief package that former President Donald Trump signed into law in December. Trump had been dismissive of the jobs lost, while expressing optimism about the fate of the industry overall.
“It may not be the same restaurant, it may not be the same ownership, but they’ll all be back,” Trump told reporters last year during a news conference.
On Wednesday, Biden described restaurants as important foundations of their communities and gateways to opportunities that were “more than a major part of our country.”
“They’re woven into the fabric of our communities,” the president added.
He described the battered industry as one of the best paths for many people to achieve the American dream. “One in three Americans, a restaurant provided their first job,” Biden said. “More than half of all Americans have worked in a restaurant at some point in their lives.”
But for now, the relief the administration is offering falls far short of what is necessary to stabilize the decimated industry.
A group of owners of small food businesses who lobbied for the funds have contended that $120 billion is needed to stabilize independent restaurants. And Biden said Wednesday that he expected the current fund to be able to help about 100,000 restaurants and other eligible businesses — fewer than those that already applied in the first 48 hours of the website being operational.
“We know that the $28.6 billion is not enough to meet the demand,” Isabella Casillas Guzman, the small business administrator, said last week. “However, we need to demonstrate that demand, and we need to encourage everyone to apply and access this fund as much as possible and demonstrate what remaining need is out there.”
For the first 21 days, the Small Business Administration will approve claims only from businesses that are majority-owned by women, veterans or people who qualify as both socially and economically disadvantaged.
Biden said 97,600 of the applications received in the program’s first two days had come from businesses owned by people who fell into those categories. High demand for the funds, however, was not necessarily a good thing for a program that has limited funding and will have to turn many needy businesses away.
The White House press secretary, Jen Psaki, said the administration would be open to seeking more funding from Congress, but she offered no specifics. Biden said the high demand should prove to skeptics that the program was a necessity.
“We passed the American Rescue Plan,” he said. “Some people said it wasn’t needed. This response proves them wrong. It’s badly needed.”
Before his remarks at the White House, Biden purchased tacos and enchiladas from Taqueria Las Gemelas, a Mexican restaurant in Washington that was a beneficiary of the relief fund’s pilot program. The restaurant went from 55 employees before the pandemic to just seven, Biden said.
The program has yet to distribute any money to restaurants outside the limited pilot, but officials said they hoped to get funds out the door quickly.