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The nation’s restaurants stand to lose at least $275 billion and shed as many as 7 million jobs over the next three months due to the coronavirus, the industry told lawmakers yesterday in appealing for help.
The National Restaurant Association wrote to President Trump and congressional leaders outlining a dozen steps it says Washington could take to provide relief and aid recovery for the nation’s one million restaurants and 15.6 million employees. The proposals include a federally-backed business interruption insurance program along with direct financial relief and tax measures.
“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,” said Executive Vice President of Public Affairs Sean Kennedy.
Kennedy said the proposals aim to ensure that restaurants have “increased liquidity and access to necessary financing to help the industry and its employees recover.”
The group’s proposal has three parts:
Loans and insurance protections would include $100 billion in federally backed business interruption insurance to help sustain businesses and their employees over an anticipated long-term recovery; establish 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 which will help employees with financial assistance during interrupted employment because of closures or hardships.
Direct relief would include a Department of the Treasury-established $145 billion restaurant and food service 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 a program used to help areas following the September 11 attacks; and assistance in allowing businesses to defer mortgage, lease, and loan obligations.
Tax programs would 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.
Rep. Maxine Waters (D-Calif.), chair of the House Financial Services Committee, issued a memorandum with consumer relief and economic stimulus ideas that include the Pandemic Risk Insurance Act, which would create a reinsurance program similar to the Terrorism Risk Insurance act for pandemics, by capping the total insurance losses that insurance companies would face. This was a request from the National Retail Federation, according to the memorandum.