Update: Congress said that it removed $15.6 billion in Covid-related relief aid from its $1.5 trillion spending bill on Wednesday. The Covid relief was intended for coronavirus prevention and preparation efforts in the event of a new variant, though some members of Congress took issue with how it would be paid for. The Covid portion was cut into its own bill that could still be considered in the future.
Some businesses aren't just hungry for more federal aid -- they're famished.
Everyone hoped that 2022 would welcome a sanguine post-pandemic future -- one that teased the promise of a closer return to "normal." But the Omicron variant, supply chain disruptions, and a spiraling inflation rate -- which hit a brand new high, at a 7.5 percent annualized rate for January -- have made that vision seem quaint. Meanwhile, the federal programs that doled out Covid aid during the pandemic are mostly depleted.
The combination of challenges has encouraged some business owners to appeal to lawmakers for more aid. In a recent survey, 86 percent of businesses supported a reauthorization of the Covid Economic Injury Disaster Loan (EIDL) program, which provided loans to small businesses to support their Covid-related recovery efforts. The January 2022 survey was from Goldman Sachs's 10,000 Small Businesses Voices, an initiative that helps small businesses with policy advocacy.
Whether they'll see another dime for the EIDL program -- or a resumption of policies that tamp down on inflation, for instance -- is another matter entirely.
Members of Congress had signaled renewed interest in authorizing additional aid. As recently as early January, it was reported that Senators Ben Cardin (D-MD) and Roger Wicker (R-MS) held talks about re-upping economic stimulus efforts, as a result of the Omicron wave. And Arizona Senator Kyrsten Sinema (D-AZ) introduced legislation in June that sought to add $60 billion to the Restaurant Revitalization Fund (RRF), a grant program that handed out $28.6 billion in emergency funds to struggling restaurants affected by Covid. However, legislation to replenish the RRF has stagnated.
Inflation is something of a different animal. Federal Reserve Chair Jerome Powell has broadcast a desire to rein in spending and tighten rates -- he's widely expected to move to tighten rates at least three times this year, for instance. If inflation continues to surge, the Fed may back even more rate tightening. That could potentially cut into the labor market's robust growth. At a 4 percent unemployment rate, the U.S. is presently near maximum employment -- that is, when everyone who can work is employed.
Regardless of what's in store, any shot at a new aid package would need to come soon. There's a brief window between February 18 and March 1 in which lawmakers could slip one in, says Sean Kennedy, executive vice president of public affairs at the National Restaurant Association (NRA). The NRA is a trade group for the food-service industry.
That's when a temporary spending measure funding the government expires and when Biden is set to give his State of the Union Address. Congress could, Kennedy explains, add a targeted spending bill to a package aimed at funding the government. "The degree of difficulty to get congressional attention and get them to open the pocketbooks will be much harder if we're not on this bill."
The time is now, agrees John Pepper, but not because it's smart legislative timing. The owner of Boston-based restaurant chain Boloco says business conditions remain tough. "The work-from-home trend is definitely causing a downturn in sales that doesn't seem to be reversing," says Pepper, who recently had to shut down one of his locations in Boston over anemic sales. The chain operated at 22 different locations at its peak in 2016, but now it's down to just six locations.
For its New Hampshire location, Boloco received $275,000 from the RRF. But for its Massachusetts locations, it has yet to see a dime of the $5.4 million that the funds formula yielded for the restaurant. One entity owns the Boloco unit in New Hampshire, while another entity owns the five Boloco locations in Boston.
"That's expansion money," says Pepper, noting that even if Congress can't get another aid package done, just paying out against existing programs would be a huge help -- and it could help the nation hit maximum employment. He adds: "One to two million [dollars] would have put us back into a position where we could fully employ people and put in safety measures."