Sen. Schumer Explains How the Stimulus Bill Will Help Restaurants Recover 2020 Losses

March 19, 2021 Admin 0 Comments

This week on Eater’s Digest, the Senate Majority Leader discusses how grassroots lobbying for restaurants helped shape the relief package

Since the start of the pandemic, restaurant owners, workers, and fans have been calling for a bailout, and Senate Majority Leader Chuck Schumer (D-NY) is here to report help is finally on the way. “It was a long, hard road, but we got there. We got there,” he says.

Schumer relayed on the Eater’s Digest podcast this week that the $28.6 billion carve-out in the new $1.9 trillion American Rescue Plan will be replenished should it run out. The program allows for grants — not loans — for full 2020 losses for owners of food businesses, including food trucks, caterers, brewpubs, and brick-and-mortar restaurants. Solo operators can claim up to $5 million in grants and groups (so long as they have fewer than 20 locations) can claim up to $10 million. “And here’s the good news,” he says, noting his confidence in the money being renewed, “This was bipartisan. This wasn’t Democrat or Republican.”

Schumer credits the work of the Independent Restaurant Coalition and their lobbying efforts across America over the last year with the success of the bill. “They did lobbying in most states. So when I went to people and said, We have to do this, I got a lot of good positive reception,” he says. “They actually made sure we talked to different restaurateurs of different types and that mattered. And not just the owners, but the workers too. I went to a whole bunch of restaurants where the owner told me of their travails, but then I spoke to the workers and you feel for them and you ache for them. You don’t want them to lose their jobs.”

As far as getting the funds, Schumer is confident the process will run more smoothly than the first round of Paycheck Protection Program loans last April and says the Small Business Administration is ready to get the money out quickly and fairly, while making it easy for restaurant owners to apply.

Read the full interview with Sen. Schumer to hear his thoughts on the federal minimum wage, the tipped minimum, and how the Save Our Stages program paved the way for restaurant support. Listen and subscribe to Eater’s Digest on Apple Podcasts.

Eater: We want to talk about what the new stimulus will provide for restaurant owners and then also what it will provide for restaurant workers. But first, can you just talk about how the restaurant industry got a carve-out at all? What were the conversations there and how did you become personally interested and personally attached to this issue?

Chuck Schumer: Well, first the RESTAURANTS and the restaurant bill [that’s part of ARP] combine two things near and dear to my heart. The first of course is restaurants. I spend lots of time eating in restaurants. They’re the glue of New York and the heart and soul of New York. It’s more than just eating, as great as that is. It’s experiences and seeing people and mixing and mingling. If New York didn’t have restaurants it would be, and Brooklyn, my home borough of Brooklyn, it would be a much lesser place.

But second, my dad was a small businessman. He didn’t own a restaurant. He was the opposite. Instead of bringing things to life, he killed things. He was an exterminator and he killed rats and roaches, although he worked in restaurants. But he suffered being a small business owner; whether it’s a restaurant or something else, you know what people have to go through. And he would pace the floor Sunday nights at 2 a.m. We’d hear him. He hated going to work Monday morning. It was a small little junky business and I’d see how he struggled. So I feel instinctively for small business people and restaurants.

When I walk down the streets of New York and you know, now people can eat at the curbside and I see the curbside set up with the little tents and all that and the heaters and no one’s there, my heart breaks because I remember my dad. So the combination of loving restaurants and having such sympathy for small businesses made me care a lot about restaurants. And of course, then the restaurants themselves organized. Tom Colicchio, who of course is on Top Chef, I knew him a little bit. I had eaten at his establishment and he got me involved. So I resolved that we’re going to solve the problem for restaurants. And it was a long, hard road, but we got there. We got there.

So their nascent lobbying efforts actually helped to get the ear of lawmakers like yourself.

Absolutely. And I had to tell them we have to put together a plan that works. The plan is really a good plan. It recognizes that restaurants have been about the hardest hit industry. Any industry where people gathered by nature by definition are hardest hit. So even though we had the PPP program, the small business program — it helped, don’t get me wrong — but it wasn’t adequate for restaurants. We knew we needed a new and separate proposal. The original... Joe Biden did not propose it in the ARP, but I’m Majority Leader and that gives me ability to put things on the floor of the Senate. And I basically said to everyone, I’m not going to put a bill on the floor of the Senate without restaurants in it. The House agreed and they put it in their bill. We actually increased the amount. So it’ll really help our restaurants a lot.

Can you talk about the $28.6 billion in grants and what that will look like for small business owners?

First and foremost, it’s a grant, not a loan. During the tough times restaurant owners had to borrow money, many of them. So to say, well, we’ll allow you to borrow more money, that’s not so great. So it’s a grant. It goes up to $5 million per individual restaurant, and to $10 million for groups, but you can’t have more than 20 restaurants in your group. One of the things we wanted to avoid is the big chains coming in and scooping this up when we had independent restaurant owners who needed the help more. So, you know, the Red Lobsters and the Olive Gardens, they can’t get this.

Second. It’s very broad in what it can pay for. It can pay for payroll and benefits. It can pay for the mortgage. It can pay for rent. It can pay for utilities, maintenance, supplies, including protective equipment and cleaning materials. It can pay for food, operation expenses, you name it. It’s very broad. And it goes through December 31st so that we hope God willing, COVID is over by then and our restaurants will be back on their feet. And it’s not just restaurants. It’s caterers, it’s brewpubs, it’s taprooms, it’s tasting rooms. All are available. So it’s really well done. The one thing is, well, what if they use up to $28 billion before COVID is over?

That was our next question.

I’m beating you to the punch. But anyway, we will renew it. And here’s the good news. This was bipartisan; this wasn’t Democrat or Republican. In fact, it was the first amendment I put on the floor of the Senate as majority leader. It was sponsored by Kyrsten Sinema, Democrat of Arizona, and Roger Wicke, a Republican of Mississippi. I was proud of two things. I was proud that my first amendment that I allowed on the floor as majority leader was restaurants. But second, that it was bipartisan, which is good.

Would you talk a little bit about what you have to give up or what kind of handshakes you have to make in order to get an amendment like this passed? Because I assume you can’t just decide to do it and then it’s done.

I give the restaurant industry, Colicchio and the Independent Restaurant Coalition and everyone lots of credit. They did a lot of lobbying, and not just in New York where I’m from, which I would like to regard as the restaurant capital of the world and the food capital of the world. But they did lobbying in most states. So when I went to people and said, we got to do this, I got a lot of good positive reception. Because we were helping so many other people in this bill and because we had helped small businesses and we had previously gotten in a provision that would help independent venues, our arts venues, the stages and in movie theaters, we sort of paved the way.

It took some work to get it done, but I didn’t have to say, well, I’ll mess around and hurt these people in order to help restaurants; we just added the amount. It was a generous bill. So we had enough money to do it and didn’t have to take away money from somebody else.

Are you concerned at all about the rollout? I know with the Paycheck Protection Program, there were some bumps in the road with the Small Business Administration and with lenders. Or, are there provisions to get the money out more expediently?

Yes. There are provisions to get the money out more quickly. There are provisions that the smaller restaurants should get a little bit of a preference because they’ll have a rougher time applying. And the SBA administrator, we just confirmed her nomination yesterday, but I met with her long before and I said, You’ve got to roll this program out very quickly. One of the reasons they think they can roll it out quickly is Save Our Stages, which as I said, was a smaller program because there aren’t as many independent arts venues and places like that as there are restaurants, but they had experience doing that, so this should be relatively quick. We’ve told them to make the application process very, very easy. They’re going to have all kinds of people available at the Small Business Administration, or if you have a banker or an accountant, they’ll know how to apply.

Within a few weeks, people are going to be able to apply and get the money. And the process is not going to be a very difficult one. You do have to show what your receipts were last year, what your receipts are this year, and stuff like that. But it’s going to be easy. ... We wanted to make sure restaurant owners could pay employees with this money. A restaurant is sort of an organic thing. It may be a chef and an under chef. It may be a bunch of waiters and people who clean up and the owner, but they come together. And if everyone’s scattered to the winds, then you’d never bring it back. So having enough money to keep your employees onboard, even though your revenues are less, was just as important as being able to pay the rent, to pay food costs and things like that.

When you talk about making something like this easy to sign up, is that just a technical question or is there a balance between having it being simple for people who actually need it and while deterring the right amount of fraud?

Yes, you have to balance it. But given the experience that SBA has had with small businesses in the past, they’re pretty good at it. We just want to make sure they don’t make it too complicated for people. That’s the side we erred on. So far in the PPP program, which is a little different than this, there hasn’t been much fraud. People need the help and they get it. And so there is a balance. It’s a very good question, but I think we’ve achieved it without making it too onerous for restaurant owners, particularly small restaurant owners, to apply.

Now, when we talk about the workers, I think keeping them employed is important, but what other provisions are in the stimulus that will help everyday and low income workers, including child tax credit and beyond?

Well, yes, first everyone whose income is below $75,000 for an individual for below $150,000 if it’s a couple, gets these checks $1,400 a person in each family. So, for single person, it’s $1,400 in addition to the $600 people got in December. We wanted it to be $2,000 in December, but the Republicans wouldn’t let it, so we got $600. Now we add the $1,400 now that we’re in charge. If it’s a family of two, they get $2,800. If it’s a family of four, they get $5,600. There are unemployment benefits for people who lose their jobs.

A third of the restaurants in New York told us that they probably couldn’t make the rent over the next three months if we didn’t do this bill. That’s one of the urgencies of it. So many people would have lost their jobs and so many restaurants would have closed down.

But in any case, if you lose or don’t have your job, not only do you get the state unemployment, but you get $300 more each week for the unemployment benefits. So that’s very helpful. You also can get help in a variety of other ways: If you don’t have money to pay your rent for your apartment, there’s rental assistance to keep you going. This is in line with Eater. There’s a lot of food assistance. We really bolster the money for soup kitchens and pantries that hand out food to people. Breaks your heart to see so many people waiting on line for food to feed themselves, feed their families, feed their children. So there’s money there. It’s a very, very comprehensive bill.

There’s also another thing that restaurants and anyone else can use called the ERTC. ... Let’s say you’re paying a chef $30,000, but you say you have to let him or her go. The federal government will give you a tax credit of 70 percent of 30,000. And you may be able to keep that person on. This is all on the theory that this crisis, God willing, will be over with the vaccines getting out quickly. And we’ve done a good job in this bill with vaccines. They’re going to get out much more quickly than people thought. It is thought that by early summer, maybe even late spring, enough people will be vaccinated and combine them with the people who have the antibodies because they’ve gotten COVID, and thank God survived, that we’ll be able to get back to normal.

So, hopefully we’re back to normal and our restaurants are full and brimming and happy long before December 31st. Economists think that the restaurant business and the travel business is going to boom because all the pent-up demand of people who couldn’t eat in restaurants and couldn’t eat out is going to be there. So let’s hope that’s true.

The roaring ’20s, as they have been saying.

Yes, the roaring ’20s.

One of the most influential aspects of the bill in my mind is the child tax credit, because it is so hard for so many restaurant workers to find good childcare that they can afford. Do you think there’s a chance that could extend beyond this year?

Yes. It won’t start until June or July. If you have a child, you get a $300 tax credit per child per month. And if the child is below six, it is, I believe it is $360 or $3,600 for the year and it’s per month. It’s really good news for people. Even if you don’t have much of an income, it’s refundable, it’s going to take half the children who are in poverty, out of poverty. Many of them are children of color. That’s another thing in this bill. The child tax credit greatly increases, as does the earned income tax credit. If you’re a single person and working without children, you often didn’t get the earned income tax credit. Now you will. This is going to apply to a lot of restaurant workers and it will be available to just about everybody. Unless you have a very high income.

Now that you’ve spent some time and you’re seeing the finances of restaurants a little more intimately. Is there anything that you would consider doing in the future? Do you think that restaurants should be treated differently from a tax perspective or do you think they should get some exemptions because they’re such community hubs?

Yeah. As I said, I saw my dad struggle as a small businessman as an exterminator. Any way that we can help our small businesses survive is good. Maybe one of the things we should do: there may be different valleys that don’t affect everybody. COVID affected everybody, but maybe a certain region, a certain type of restaurant or even an individual restaurant gets into a temporary problem. And maybe there should be a way to help them get through that problem so they don’t close.

It needs some exploring, but it’s a great question.

I would love to get into the minimum wage a bit, the gradual climb to a $15 minimum wage was an inclusion in there. I know a lot of Senators and Congresspeople wanted that and it didn’t make it. Where do you fall on that proposal? Is there a future for raising the minimum wage?

Yes. I think there is a future for raising the minimum wage. Now we had eight Democratic Senators who voted against it, but six of them had trouble with the tipped wage part of it, which I know some restaurants have some problems with too. I want to go forward on minimum wage. I think if you work hard, you should have a decent life, but we’re going to put the heads together of a group of Senators who have diverse views and see if we can come up with some-

Do you think eliminating the tipped wage could ever be in one of those conversations or is that a bit of a third rail?

Well, who knows? I don’t want to prejudge it. We’re just going to... some of the people voted no, as I said, voted against it. They said they’d be for 15, but they got to keep in the tip wage. So we’ll have to see where the discussions go, but we would like to get something done.

I just wanted to go back to something a little bit earlier. When you said the coalition did a good job of lobbying in, not just in New York, but in many states. I don’t mean for this to be too much of a general politics question, but what does that mean exactly?

First, restaurants had a good lobbying force just on its own. A senator goes to a restaurant and most of us, even when I don’t know the owner, I always ask a question, given my dad’s hardships: “How’s business?” I ask every small business person I see, including restaurants. When they say “good,” I feel happy. When they say “bad,” I feel sad. It’s just who I am. You had lots of people saying we got trouble we might close. Every Senator, every Congressman saw restaurants closing. I walk down some of the streets of my neighborhood in Brooklyn and see restaurants that I’ve known for 15 years closing. I knew the owners, and it’s heartbreaking. So that gave you a good base.

But then the Independent Restaurant Association, Colicchio, and the other groups made sure that Senators got put in touch with individual restaurant owners. The personal stories are the best.

So it wasn’t just, they came in and said there were 3,811 restaurants about to close. They actually made sure we talked to different restaurateurs of different types and that mattered. And not just the owners, but the workers too. I went to a whole bunch of restaurants where the owner told me of their travails, but then I spoke to the workers, and you feel for them and you ache for them. You don’t want them to lose their jobs. A lot of restaurant owners were very generous and kept paying their workers, even if it was at a loss to themselves because their revenues were only 25 or 30 percent [of what they used to be].

So what do you think about the businesses on the margins of a bill like this? Like, you know, gyms and other public businesses that don’t exactly fit these qualifications.

We’ve worked for the arts and we’ve worked for restaurants. There are probably some other industries that need particular help: again, where people congregate in large numbers. We will look at that in the future. In the meantime, the PPP program will help them for a shorter period of time.

PPP goes for eight to 24 weeks. And by the way if you have an immediate need you can apply for PPP and get that. And then when you get the grant, you just pay back the PPP [loan]. Let’s say your restaurant grant is $50,000. But you’ve already applied for PPP and you’ve gotten $5,000 from that. You use the $50,000 grant to pay back the $5,000 PPP loan.

So that can keep you going in the short term. So people are desperate and don’t want to wait the few weeks before the restaurant bill is actually implemented, they can get PPP, then apply to Restaurants and just pay back the amount they got out of PPP out of the loan... out of the grants that they’re getting in the Restaurants bill.

Yeah. I think that’s a really good point that if restaurateurs need it, it’s not going to disqualify them for applying for the grant later.

Correct. Correct.

So they should go ahead and get what they can get.

You got it.

We want to be respectful of your time, but before you go, can you tell us some favorite restaurants, either in DC or New York that have been getting you through this pandemic?

I’m a New York guy. DC, I’m usually eating at my desk late at night. Let me tell you, I love pizza. I’m a New Yorker. Roma Pizza. I’m so nutty, I would go around and survey restaurants or pizzerias for the best pizza and I’d rate it. I’d have a rating. One to 10 on three things. Sauce, I like it spicy, not smooth, not sweet. Crust, I like it thin and malty, and cheese, quality and amount of cheese. Roma Pizza is the best one, in my opinion. I love Junior’s Cheesecake. I send that to people as gifts. Junior’s is a restaurant in downtown Brooklyn that’s been there a long time. And for pasta, there’s a great restaurant and the owners were pretty active in the Restaurant Association, a restaurant called Lilia in Williamsburg. And I’m I’m gluten resistant ... I can eat gluten, but they have a good gluten-free selection.

And have you been dining outside? Have you done indoor? Are you doing takeout? What’s your deal?

I love restaurants and that’s often how we socialize. Even in the coldest weather, I’d be eating in a big jacket and a beanie. I even tried to cut my food with gloves on so we could keep eating. A lot of the New York restaurants and restaurants around the country were quite creative in creating these outdoor areas for themselves. Now, when it gets to be spring, they won’t need it as much.

Yeah, of course. I mean, it’s amazing what the streets of New York look like compared to what they did last year.

Yes. We’ll be back. New York always comes back from our crises and I am a New Yorker and a Brooklynite to my bones and our restaurants are going to come back and New York’s coming back.

Love to hear it. Thank you so much.

This interview has been edited and condensed for clarity.