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Biden Calls for Grants to Support the Struggling Restaurant Industry

President-elect Joe Biden told a virtual panel of restaurateurs this week that he sees federal guarantees, rather than loans, as the best way to help the restaurant industry survive the pandemic.

During an economic roundtable earlier this week, President-elect Joe Biden expressed his support for providing restaurants with grants instead of loans, stating that the restaurant industry "affects the ability of the economy to continue to grow."

Dan Jacobs, a member of the Independent Restaurant Coalition and the only small business owner on the panel, asked the president-elect to back the Restaurants Act, a bill that would establish a $120 billion grant fund to support restaurants and bars. Jacobs told the panel the Payment Protection Program loans have not been enough to financially support restaurants during the pandemic, especially since funding for many restaurants has run out. 

"For restaurants specifically, the PPP program falls far short. Only 8% of the businesses that received PPP loans were restaurants, however our industry was the hardest hit, mainly because restaurants' first or second largest expenses are food and beverages costs, and these are not eligible as grant expenses," Jacobs said during the roundtable. "Our company personally exhausted our PPP loan in October. It’s winter here in Milwaukee ... add that to the exploding COVID positivity rate, that's come to form a perfect storm of loss of revenue."

Like many of the nation’s estimated 500,000 independent restaurateurs, Jacobs said his existing operations have seen dramatic revenue losses. Since June 1, he said, his company’s restaurants DanDan and EsterEv have experienced a $700,000 loss revenue. In November alone, his company lost $23,000, he added. 

Jacobs continued, “the Restaurants Act would immediately help independent restaurants across the country. Independent restaurants count for 11-plus million workers plus another 6 million workers just outside our bubble. Think about bakers, fishermen, farmers, foragers. These are the people that work outside of us.”

As of right now, the Restaurants Act is co-sponsored by Vice President-elect Kamala Harris and has passed the House of Representatives, but has yet to gain traction in the Republican Senate. On Monday, however, Sen. Patty Murray (D-Wash) became the 49th senator to sign the bill, putting roughly half of the chamber in support of the proposed legislation. 

“You should be in a position where you can have all that ventilation changed, all the dividers put up, all the social distancing that you need, and make sure that your staff is safe as well, both indoors and out,” Biden said during the roundtable. “But it costs a lot of money to do that.”

Biden’s statements in support of the Restaurants Act represent some of his first acknowledgments of the dire situation thousands of restaurants find themselves in. 

Biden also pushed Congress Tuesday to pass a bill before his administration begins on Jan. 20. President Donald Trump also urged Congress to support restaurants in a tweet on Nov. 27.

The Restaurants Act's $120-billion restaurant grant program is part of the Heroes Act, which, according to the proposal, would "prioritize awarding grants to marginalized and underrepresented communities, with a focus on women- and minority-owned, and women- and minority-operated eligible entities" for the first two weeks. During that period, restaurants with more than $1.5 million in annual revenue wouldn't be eligible, but  the grants would be open to any restaurant afterward, Eater reported.

Biden has made other campaign promises that would affect the restaurant industry as well,  such as ending the tip credit and raising the minimum wage to $15. Although, these measures are a bit more controversial among the restaurant community. 

"Small business is the economic engine of the country,” Biden said during the roundtable. “And restaurants are a major part of that small business."