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BPAA Federal Policy Update - July 23, 2021

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Small Business Funding

 

  • Congress proposes Entrée Act to inject $60B into Restaurant Revitalization Fund Congressman Blaine Luetkemeyer (R-MO) introduced the Entrepreneurs Need Timely Replenishment for Eating Establishments (Entrée) Act on Tuesday that would inject $60 billion in additional funds to the Restaurant Revitalization Fund. The funds would come from rescinding money from unspent Economic Injury Disaster Loans (EIDLs) and other state and local funds within President Joe Biden's American Rescue Plan. 
  • The proposed legislation would also eliminate preferential treatment for priority groups and require all applications be received, reviewed, processed and disbursed on a first come, first served basis. 
  • The Entree Act proposal comes a week after the RRF portal was officially disabled while the industry waits to see if Congress will refill the fund. It also follows the National Restaurant Association's request that the Small Business Administration reprogram federal dollars to pay the nearly 3,000 RRF recipients who had their grant approvals revoked by the agency after judges issued injunctions on their disbursements.​ Read more at Restaurant Dive.

 

  • 24% of Restaurant Revitalization Fund grants were for $50K or less The U.S. Small Business Administration provided an update on the Restaurant Revitalization Fund, including which states received the most RRF grant money: California ($5.7 billion), New York ($3.6 billion), Texas ($1.6 billion), Illinois ($1.4 billion) and Florida ($1.3 billion).
  • This distribution reflects the states with the five largest restaurant industries, though in a slightly different order. According to the National Restaurant Association, California generated $97 billion in restaurant sales in 2018 (the most recent available data), compared to $51.6 billion for New York, $66 billion for Texas, $50.1 billion for Florida and $30.1 billion for Illinois.
  • RRF's distributed grants range from $50,000 and under to $10 million. The majority of grants (25.7%) were for between $150,000 and $350,000, while the second largest pot of funds (just over 24%) was for grants of $50,000 and under. But less than one-third of applicants received any funds, and the remaining applicants could go without federal grants unless Congress refills RRF.
  • The U.S. Small Business Administration provided an update on the Restaurant Revitalization Fund, including which states received the most RRF grant money: California ($5.7 billion), New York ($3.6 billion), Texas ($1.6 billion), Illinois ($1.4 billion) and Florida ($1.3 billion).
  • This distribution reflects the states with the five largest restaurant industries, though in a slightly different order. According to the National Restaurant Association, California generated $97 billion in restaurant sales in 2018 (the most recent available data), compared to $51.6 billion for New York, $66 billion for Texas, $50.1 billion for Florida and $30.1 billion for Illinois.
  • RRF's distributed grants range from $50,000 and under to $10 million. The majority of grants (25.7%) were for between $150,000 and $350,000, while the second largest pot of funds (just over 24%) was for grants of $50,000 and under. But less than one-third of applicants received any funds, and the remaining applicants could go without federal grants unless Congress refills RRF. Read more at Restaurant Dive.

 

  • Restaurant Revitalization Fund is closed, portal disabled July 14 The Small Business Administration closed the Restaurant Revitalization Fund, the agency wrote to RRF recipients in an email viewed by Restaurant Dive. Applicants who didn't receive funding as of Wednesday will have their applications held within the application platform to allow for processing in the order received if the fund is refilled by Congress. 
  • The SBA will disable access to RRF's portal on July 14. Until then, applicants can continue to check their status, address payment corrections and ask questions. The SBA closed the RRF to new applications on May 24. 

Lawmakers, along with the National Restaurant Association and Independent Restaurant Coalition, are pushing for the fund to be refilled with $60 billion.This amount is more than double the fund's allotment of $28.6 billion. More than 265,000 restaurant operators applied for the RRF's federal relief but did not receive funding, according to the SBA. Read more at Restaurant Dive.

What’s Happening in Congress

 

  • Spending Bills, Infrastructure and Debt Limit:
  • House Spending Bills to Floor: House Democrats plan to take up a seven-bill appropriations package next week comprised of some of the most popular spending measures among Democrats. The House Rules Committee announced the amendment process for three additional spending bills beyond the seven-bill package set for floor consideration next week. The panel set a deadline of today for amendments to the fiscal 2022 State and Foreign Operations (H.R. 4373), Commerce-Justice-Science (H.R. 4505), and Legislative Branch (H.R. 4346) spending bills. The committee said it’s likely to meet on the measures next week to set up consideration for later in the week. Read more from the House Rules Committee.
  • Both parts of President Joe Biden’s two-track economic agenda ran into some roadblocks on Wednesday. Senate Republicans stymied efforts to open floor debate on a $579 billion infrastructure package, the latest sign of the challenges that come with trying to advance the yet-to-be-written legislation. The vote, called by Senate Majority Leader Chuck Schumer (D-N.Y.) was meant to push the process along, but the bipartisan group of lawmakers hashing out the details say they will need more time.
  • Sens. Rob Portman (R-Ohio) and Sen. Mitt Romney (R-Utah) said they may be able to secure enough Republican votes—at least 10 are needed—for the procedural vote early next week. Biden, during a CNN town hall, said the Senate will probably vote on Monday to begin debate on the bipartisan deal.
  • But the bipartisan deal may not go far enough to get the backing of all Democrats. In the House, its critics include progressive Democrats who want more funding included and Republicans who say it is too expensive.
  • Separately, Democrats in the Senate are trying to coalesce around a budget package that would advance Biden’s economic and climate change-fighting initiatives.
  • Schumer had set a Wednesday deadline for an agreement on top-line spending levels. But Senate Budget Chairman Bernie Sanders (I-Vt.) said he hopes that proposal will be ready for a floor vote by early August.
  • Bloomberg Government reports: Debt Limit Chasm Raises Reconciliation Question: Partisan tensions over the debt limit worsened yesterday as Democrats criticized Republicans for withholding support for a clean increase or suspension, a development that could push Democrats to address the matter without GOP support through reconciliation.
  • Senate Finance Chairman Ron Wyden (D-Ore.) criticized Republicans’ “effort to hold our economy hostage” by threatening to oppose a debt limit measure. Senate Minority Leader Mitch McConnell (R-Ky.) told Punchbowl News he doesn’t expect “a single Republican in this environment that we’re in now” to vote to raise the debt limit. Senate Budget ranking member Lindsey Graham (R-S.C.) said he’ll release a proposal next week to tie the debt limit measure to the creation of a commission to address the financial sustainability of Social Security and Medicare.
  • The debt limit’s current suspension ends Aug. 1, but Treasury officials can push that deadline back by “extraordinary measures” such as delaying payments. Treasury Secretary Janet Yellen and others have warned it’s difficult to tell when the effective deadline will be.
  • The deadline will fall “most likely in October or November, although an earlier or later date is possible,” the Congressional Budget Office said yesterday.
  • Schumer called McConnell’s comments on the debt ceiling “shameless, cynical and totally political,” adding that debt is from Covid-19 relief and former President Donald Trump, Megan Howard reports.

Democrats still haven’t determined how they’ll address the debt limit. They can raise the limit through reconciliation, which would avert the need for Republican support but force Democrats to solely vote for a specific debt figure, likely greater than $30 trillion, which could be politically risky. House Budget Chair John Yarmuth (D-Ky.) has said he doesn’t believe it’s possible to suspend the debt limit through reconciliation, meaning suspension would require Republican support to get 60 votes in the Senate. 

Unemployment & Labor

 

  • House Democrats Push Paid Leave: More than 80 House Democrats, led by Reps. Chrissy Houlahan of Pennsylvania, Rosa DeLauro of Connecticut, Judy Chu of California and Ayanna Pressley of Massachusetts, sent a letter to House leadership Friday urging passage of paid family and medical leave as part of the bipartisan infrastructure package, rather than as part of the reconciliation bill. “Many of us have long supported universal, comprehensive paid family and medical leave as cosponsors of the FAMILY Act,” they wrote. “We are thrilled that both President Biden and Chairman [Richard] Neal have introduced universal paid family and medical leave programs that build off of the FAMILY Act.”
  • But, the lawmakers wrote, they "also want to highlight that increasing access to job-protected leave will be critical in helping our nation’s families and economy recover and rebuild from the coronavirus pandemic. … This is particularly harmful for low-wage workers, who are disproportionately women of color.”

 

  • 1.8M Americans turned down jobs due to generous unemployment benefits: poll More than 1.8 million unemployed Americans have turned down jobs over the course of the pandemic because of the generosity of unemployment insurance benefits, according to a poll published Wednesday by Morning Consult. Of those surveyed who were actively collecting unemployment benefits, 29 percent said they had turned down job offers during the pandemic, according to the poll. And among the group who said they had passed on a job, 45 percent cited the generosity of the benefits “as a major reason why they did not accept the job offer.” The findings are based on Morning Consult’s survey of a representative sample of 5,000 US adults from June 22 to June 25. Read more at the New York Post.

 

  • Study: Labor shortages, food costs are now restaurants' biggest concerns Nearly eight out of 10 operators are confident in their ability to survive beyond the pandemic, according to research from Quadrant Strategies, jointly commissioned in June by DoorDash and Uber Eats. This is a marked improvement compared to the peak of the pandemic last year, during which a majority (53%) of restaurants worried about their survival. Despite this optimism, more than 75% of restaurant operators are concerned about rising food costs and worker shortages. Increased cost of goods is the top concern for restaurant operators (43%), followed by employee shortages (35%), reduced demand due to COVID-19 (29%), employee wages/costs (24%) and rising minimum wage (23%). Read more here.

 

Tipped and Non-Tipped Work Back Under the Microscope The old “80/20 rule” is back again for tipped workers under the latest proposed Final Rule issued by the Department of Labor (DOL) last month. Employers in the service industry, especially those employers who take a tip credit and/or implement a tip pool for their employees, should keep an eye on this latest Final Rule. Under the Trump Administration, the DOL had issued a different Final Rule in its final weeks which was intended to formally incorporate a 2018 tip credit amendment to Section 3(m)(2) of the Fair Labor Standards Act (FLSA) into the DOL’s tip regulations and guidance. Read the full analysis on the announcement here.

Tax Update

 

  • Senate GOP Urges Biden to Drop Plan for Capital Gains on Estates All 50 Senate Republicans are calling for the Biden administration to drop a proposed change to how stocks, real estate, and other assets are taxed at death. The proposal, part of President Joe Biden’s plans to raise taxes on corporations and the wealthy, would eliminate the tax adjustment known as the “step up in basis.” Currently heirs can use the value of an asset at the time they inherit it—rather than the original purchase price—as the cost basis for calculating capital gains when they sell those assets. In a letter sent Wednesday, Senate Republicans called the change a “backdoor death tax on Americans.”
  • “These changes are a significant tax increase that would hit family-owned businesses, farms, and ranches hard, particularly in rural communities,” said the senators, led by Sens. John Thune (S.D.), Steve Daines (Mont.), Mike Crapo (Idaho), and Mitch McConnell (R-Ky.).
  • Groups backing the call from Republicans include the Associated General Contractors of America, National Association of Manufacturers, and the U.S. Chamber of Commerce.
  • Some congressional Democrats have also expressed concern over the proposal, which is meant to offset the cost of some of Biden’s infrastructure and social spending aims. All of Biden’s plans are still subject to congressional negotiation, which is ongoing.

 

Oregon Democrat Proposes Senate Bill To Overhaul Tax Break For Pass-Through Businesses Senate Finance Committee Chairman Ron Wyden, D-Ore., on Tuesday released a bill to overhaul a controversial deduction for certain businesses, which was part of Republicans 2017 sweeping tax legislation. Currently, the so-called qualified business income deduction, also known as 199A, allows certain businesses, such as sole proprietors, partnerships and S-corporations, to write off up to 20% of net income. The bill would phase out the tax break for households making more than $400,000 per year, sticking with President Joe Biden’s campaign pledge, Wyden told reporters on a call. At the same time, the proposal also expands eligibility for the write-off by removing “extraordinarily arbitrary restrictions” on which industries qualify, he said. Read More at CNBC

Political Update

 

  • Ex-Rep. Finkenauer Seeks Grassley Senate Seat: Former Rep. Abby Finkenauer (D-Iowa) announced she’s running for the Senate in 2022 for the seat held by long-time Sen. Chuck Grassley (R-Iowa). Finkenauer lost re-election to Iowa’s 1st Congressional District last year. “After 46 years in DC, @ChuckGrassley has lost touch,” she said in a Twitter post today. “I’m from a proud union family. We don’t back down. I’m in this to win.”

 

  • BATTLE FOR THE SENATE: Scott Holds Out Hope for Doug Ducey, Larry Hogan Appearing on the Ruthless podcast, NRSC Chairman Rick Scott said that there’s still a shot that Arizona Gov. Doug Ducey (R) runs against Sen. Mark Kelly (D), and added that there’s a “chance” that Maryland Gov. Larry Hogan (R) runs against Sen. Chris Van Hollen (D).
  • He also said that he bugs Sen. Ron Johnson (R) daily about committing to running for reelection.
  • SCOTT SAYS: “There’s always a chance that Doug Ducey will run. We’ll see what happens there.” (Hotline reporting)

 

  • TX-06: An internal poll from former state legislative aide Susan Wright (R) conducted by American Viewpoint (July 19-21; 400 LVs; +/-4.9%) found Wright leading 2018 candidate Jake Ellzey (R), 44%-34%. The special election runoff to replace the late Rep. Ron Wright (R) is July 27. See here from the Texas Tribune.

 

  • NEVADA 03: Fifth Republican Challenges Susie Lee Army veteran Noah Malgeri (R) launched a challenge to Rep. Susie Lee (D) today. Malgeri said in an announcement video that he would fight “critical race theory racism” and “rampant election fraud.” Four other Republicans have also filed challenges to Lee. (release)

 

Conservative PAC Agrees to Cease Using ‘Trump Reagan’ Branding: The Constitutional Rights PAC and Political Media Inc. have agreed to stop using President Ronald Reagan’s name, image, and likeness in fundraising and other commercial activities, according to a joint stipulation and proposed permanent injunction filed in the U.S. District Court for the Central District of California. The Reagan Foundation says that it was alerted to CRPAC’s “Trump Reagan Club” advertising campaign “on or about” June 10, 2021, after receiving an email “purporting to be a newsl etter” that offered a free "@trumpreagan.com” email address with any donation. Read more from Holly Barker

 

 

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