Will Congress Vote on More RRF Funding?

Some 80,000 restaurants nationwide have been forced to close due to the COVID-19 pandemic. The unemployment rate for the hospitality sector remains twice as high as the national average, and many restaurant and bar owners have resorted to selling personal assets to stay afloat during COVID. 

The restaurant industry is now well into its third year of a protracted crisis without much federal assistance.

Federal aid for restaurants was proposed in 2020, in the form of the RESTAURANTS Act. The acronym spelled out what many restaurant owners wish Congress would provide in 2022: Real Economic Support that Acknowledges Unique Restaurant Assistance Needed to Survive. If it had passed, the RESTAURANTS Act would have provided restaurants and bars with $120 billion in federal aid. The proposed bill never became a law, but it did highlight the challenges of restaurants at the national level.

Aid for restaurants and bars was included in the American Rescue Plan, a wide-ranging economic stimulus package passed in 2021. 

The American Rescue Plan created the Restaurant Revitalization Fund (RRF), which provided $28.6 billion in federal relief for qualifying restaurants. 

However, the available RRF funds only amounted to 24% of the aid originally proposed in the RESTAURANTS Act and this gap in funding had a devastating impact for the majority of the 278,000 qualifying restaurants.

The RRF ran out of money on June 30th, 2021, just a few months after its inception and was ultimately only able to help about one-third of the approved applicants. 

Senate Majority Leader Chuck Schumer referred to the RRF as a "down payment" for the restaurant industry. So if that’s the case, where is the rest of the federal relief for the struggling restaurant industry?

A bipartisan group of senators, including Senator Benjamin Cardin and Senator Roger Wicker, have been trying to obtain additional federal funds for restaurants and bars. They have proposed a $48 billion stimulus package that would replenish the RRF. The senators have been working to include their proposed legislation in the omnibus due on March 11th. Congress has passed H.R. 6617, which extends funding for the federal government through March 11th. At that point, President Biden would need to sign an omnibus bill to avoid a government shutdown. Groups in congress would like to attach appropriations for several causes to the omnibus, and revitalizing the RRF is one such addition.

However, the renewed RRF funding would be limited in scope — funds would only be available to restaurants that had previously qualified for (but had not received) RRF funds.

Regardless, it is clear that the RRF funds helped its initial recipients. Indicators point to the program actually functioning well for restaurants that received aid. 28% of restaurants without RRF funds expect eviction, while this only applies to 10% of funded restaurants. 42% of restaurants without RRF funding are nearly bankrupt, while only 20% of restaurants with funding are close to bankruptcy.

Revitalizing the RRF would provide dying restaurants with some insurance in the event of future shutdowns caused by some new post-Omicron variant of COVID-19, which is a very real risk. There is reason to hope that the mid-March omnibus will include additional RRF funds, but both Republicans and Democrats have failed before in their efforts to provide additional restaurant relief in 2021. For the next week, restaurant owners will just have to wait and see.