This column, from the weekly opinion piece MATTER OF FACT, first appeared on BrooklynReporter.com, the Home Reporter and Spectator dated December 25, 2020
As this very difficult year nears its end and Christmas is upon us, the strain on many local businesses and their workers has been painfully evident of late. New York City restaurants and bars have been hit particularly hard, especially with the recent closure of indoor dining.
After attempts to get a federal pandemic relief bill passed for seven months, Congress finally sent a piece of legislation to the president’s desk on December 21. Though the benefits included in the bill will help, they are far from what is needed and a fraction of what had been in previous pieces of legislation the Democratic-controlled House had sent to the Republican-controlled Senate in May and October.
While restaurant owners and workers have been in dire straits these past several months, the GOP objected to the $3.4 trillion price tag of the May House bill, then to the reduced cost of the second $2.2 trillion version the House passed in October. They objected to another round of $1200 stimulus checks to Americans, refused to negotiate unless provisions were added to protect corporations from facing lawsuits if they forced employees to work in unsafe conditions, and insisted that the Federal Reserve Bank lose its power to create emergency lending programs.
In the end, Republicans agreed to a $900 billion bill with reduced $600 stimulus payments and abandoned their demands related to corporate liability and hamstringing the Federal Reserve Bank. Senate Majority Leader Mitch McConnell, who had prevented relief for months, has said that he was motivated to reverse course because this issue was hurting the reelection campaigns of the two incumbent Senators facing tight races in the January 5 runoff election in Georgia. He prevented help from getting to American citizens and small businesses for seven months because he did not feel they were worth the money and that protecting corporations was more important, only changing his mind when that decision was threatening two of his own.
“… if our country has been able to assist billionaires in increasing their wealth by about 40 percent this year, we can afford to put money in the pockets of poor, working, and middle class Americans.”
All of this has had disastrous consequences for our local restaurants and bars. The previous relief packages the House had passed this year included the RESTAURANTS Act, which would have earmarked $120 billion to help independent restaurants and bars. The financial assistance would have been given as grants.
Instead, the only aid these hard-hit businesses will have available under the compromise that was just signed, is limited to a refunded Paycheck Protection Program, though the PPP is getting less money than the House bills had proposed and being allotted less than the last time, when it mostly benefited large companies, not small businesses.
The food service industry, which employs more than 11 million Americans, lost 17,000 jobs in November and nearly one in five of all establishments have closed this year. Many restaurants that received PPP assistance the first time around, still have not had their loans forgiven. Asking them to apply for additional loans, with uncertainty as to whether the promised forgiveness will ever be approved is not a viable solution, as struggling restaurants cannot take on additional debt when they are making little money.
The new PPP again provides requirements that 60% of the money be used on payroll, which is a good way to help workers, but it also prevents businesses from using the loans for some of their most significant operating expenses, like rent, and it limits how much can be spent on vendor expenses, which in turn hurts the businesses that support restaurants.
During this pandemic, billionaires have added about $1 trillion to their total net worth. Some of that is due to the business successes of Amazon and technology-based companies, but another huge factor was the carveouts in the first pandemic stimulus that specifically helped corporations and wealthy individuals.
The cost of getting relief to Americans and stimulating the economy has to be considered, but if our country has been able to assist billionaires in increasing their wealth by about 40 percent this year, we can afford to put money in the pockets of poor, working, and middle class Americans. Christmas is the time of giving, but this would be less a handout and more an investment in those who are the backbone of our economy.
