On Tuesday night, Blaine Luetkemeyer, a ranking member of the House Committee on Small Business, introduced the ENTRÉE Act in an effort to provide aid to thousands of struggling restaurant owners.
Standing for Entrepreneurs Need Timely Replenishment for Eating Establishments, the act would provide $60 billion to the SBA’s now-empty Restaurant Revitalization Fund, and would be paid for by rescinding money from unspent Economic Industry Disaster Loans, as well as state and local funds within President Joe Biden’s American Rescue Plan, which the House Committee on Small Business called “reckless” in a release Wednesday.
The ENTRÉE Act would also increase oversight responsibilities and audit requirements for the SBA to safeguard American taxpayer dollars. Notably, it would eliminate preferential treatment for priority groups as well—an issue that plagued the RRF’s initial go-around. Nearly 3,000 restaurants and bars owned by women, socially or economically disadvantaged individuals, and veterans, had grant awards rescinded following lawsuits in Texas and Tennessee that ordered the SBA to cease honoring the 21-day priority period it created for marginalized groups.
In turn, the ENTRÉE Act promises to require all applications to be received, reviewed, processed, and distributed on a first-come, first-served basis. The SBA previously indicated If more money was appropriated to the RRF, it would process the applications in the order received. Meaning applicants already in the system that were left out the first time would begin getting reviewed again.
According to SBA data, 177,300 out of the 278,304 restaurants that applied didn’t receive any grant money.
“From the beginning, committee Republicans have pushed for additional RRF funding to ensure all American restaurant owners, no matter their background, receive the assistance they need to once again open their doors and provide for their communities,” Luetkemeyer said in a statement. “To replenish the RRF, we should be using unspent allocated dollars rather than continuing to recklessly print more money, which has led to widespread inflation. As Republican Leader of the Small Business Committee, I urge my colleagues to swiftly pass this legislation so restaurant owners everywhere can receive the assistance they so desperately need.”
Wednesday’s release claimed committee Republicans recognized the original allotted $28.6 billion in the RRF was “not nearly enough funding to assist all of the eligible restaurants and proposed amendments to add more commonsense funding to the RRF.”
“Democrats struck down these amendments and went forward without Republican support,” it added. “The American Rescue Plan created a 21-day priority period for women, veterans, and socially and economically disadvantaged applicants. This exclusionary decision was met with lawsuits that eventually halted the program and the SBA’s allocation of RRF funds.”
Sean Kennedy, EVP of Public Affairs at the National Restaurant Association, said the organization appreciates Luetkemeyer effort to introduce the act, and that it “shows that there continues to be strong bipartisan support for restaurants. There is an opportunity to find a path to consensus on how to ensure that the SBA is able to complete their mission by funding the nearly 200,000 applications left pending when the RRF closed.”
“From the outside looking in, the industry appears to be recovering, but looks are deceiving,” Kennedy added. “Restaurants that have been closed or operating under often severe capacity restrictions have months of debt that they are balancing with increased food and labor costs. Many are caught in a vicious cycle of wanting to fully open but lacking the resources they need to meet demand. For many of the operators stuck in limbo as they wait to hear about the RRF Replenishment Act, a grant could put them on solid ground.
“There isn’t a community in this country that hasn’t lost a small business restaurant or isn’t on the verge of losing one, which is why we haven’t given up on working with Congress and the Administration to find a path to more funding.”
Looking at the RRF pool now, there are $43.6 billion in unfunded applications. This as 1.3 million jobs have still not returned and food costs are rising at their fastest rate in seven years. Plus, additional debt thanks to some 337,000 Paycheck Protection Program Loans at $31 billion.
“Restaurants are not like other retail stores, operating on very small margins — often with just 16 days of cash on hand,” the Association said. “From fueling job growth to investing in local communities, restaurants are engines of the economy. Every $1 spent in the foodservice industry generates an additional $2 for farming, fishing, backing, and other related industries. Yet, they will continue to struggle unless Congress replenishes the RRF.”
“It is clear to everyone that cares about this issue that the Restaurant Revitalization Fund needs to be replenished so that all 177,000 small businesses that applied for, and still desperately need, relief can get it,” added Andrew Zimmern, industry and TV personality, and a co-founder of the Independent Restaurant Coalition, in a statement. “We didn’t get to this point by hoping for a government intervention. We got here because so many of the 500,000 independent restaurants nationwide, our 11 million employees, our 5 million suppliers, and more made enough noise that our lawmakers realized how critical it was to take action and save our industry.”
Tuesday’s introduction joins reps. Earl Blumenauer (D-OR-3) and Brian Fitzpatrick (R-PA-1) and Sens. Roger Wicker (R-MS) and Kyrsten Sinema (D-AZ) introduction of the Restaurant Revitalization Fund Replenishment Act in both chambers of Congress, which also offered $60 billion in additional funding for the RRF. This has enjoyed bipartisan support as 193 members of the House of Representatives have come out in support of the bill and 13 members of the Senate.
The IRC has campaigned for operators to “light up Congressional phone lines” by calling (202) 224-3121, and urging representatives to support the legislation. The week of action concludes Friday, as operators use the IRC’s take action tool to demand their members of Congress replenish the RRF.
“Even if we compete against each other, we are in the same trenches right now. Talk to your neighbors, educate your customers, talk to your elected officials — we must keep our elected leaders accountable,” said Bessie King, GM of Villa Mexico Cafe in Boston, in a statement