The House of Representatives is slated to vote Thursday on another round of coronavirus relief aid for restaurants that proponents say is still needed to keep small businesses afloat two years into the pandemic, but critics have panned it as an unnecessary government handout.
The legislation would add another $42 billion to the Restaurant Revitalization Fund, on top of the $28.6 billion that was previously approved in the American Rescue Plan that Democrats passed in 2021. The funds would be directed to the thousands of food service providers that lost out on funding in the first round of the program.
The House legislation would also create a new $13 billion Hard Hit Industries Award Program that would give up to $1 million grants to small businesses across all industries that suffered at least 40% pandemic-related revenue loss in 2020 and 2021, when compared with 2019 revenue.
"This bill is nothing more than another blue-state bailout," Jessica Anderson, executive director of Heritage Action, told Fox News Digital. "Left-wing governors and mayors destroyed small businesses for two years with endless lockdowns, and now their friends in Congress are looking to reward their bad decisions, to the tune of $42 billion."
Right-leaning Heritage pointed to reports that major recipients of the Restaurant Revitalization Fund grants are larger franchisees, such as Panera Bread, McDonald’s and Dunkin franchisees as well Lucky Strike Entertainment, a 16-unit bowling alley chain, according to Nation’s Restaurant News.
Businesses tied to Disney, which has caught heat from both the right and left for its recent political activism in Florida, also benefited from the fund.
JBI LLC that's based in Lake Buena Vista, Fla, got a $10 million grant – the maximum award. The company does businesses as Culinary Agents and owns the restaurant and bakeries in the France pavilion of Disney's theme park, according to Nation’s Restaurant News.
And Disneyland-related businesses got cash too in Anaheim, California. Ralph Brennan's Jazz Kitchen in the downtown Disney district was awarded $2.9 million, according to a spreadsheet of recipients published by the Small Business Administration (SBA).
"When Congress started this program a year ago, it became a buffet line for well-off woke corporations, including affiliates of Disney," Anderson said. "There’s no reason to believe it won’t happen again."
Soon after President Biden and Democrats opened the Restaurant Revitalization Fund, it ran out of money. More than 278,000 businesses submitted applications for $72.2 billion in requested funds – far exceeding the available amount of $28.6 billion in restaurant grants.
More than 100,000 businesses received funds during the first round of the program, including caterers, bars, breweries, wedding venues, airport concessions and wineries. But about 177,000 other businesses were turned away because there was not enough money, according the SBA.
The restaurants that lost out are still desperate for help, says House Small Business Committee Chairwoman Rep. Nydia Velazquez, D-N.Y.
"Since then, restaurant owners have made it clear that they need relief," Velazquez, said at a hearing earlier this week. "Nearly every day my office hears from small businesses saying that they were counting on a grant and that the RRF money will make a world of difference. They are holding out hope but absent more relief, their survival is not assured."
But Republicans said the new windfall is not necessary and will drive up inflation.
"Small business owners are reporting that their number one problem is inflation," said Ranking Member Blaine Luetkemeyer, R-Mo. "Unfortunately, injecting more money into the system will simply fuel the fire of inflation."
The Biden administration says the RRF was extremely impactful in funding 100,000 restaurants and powering the nation’s historic economic comeback.
As for criticism that large businesses got the cash, an SBA official told FOX Business the program was administered in accordance with the guidelines set up by Congress.
"Under eligibility rules, franchise locations (often associated with larger organizations) and some larger food suppliers were eligible," the official said.
For example, restaurants located in hotels with a separate Employer Identification Number (EIN) from a hotel EIN can be eligible for the Restaurant Revitalization Fund (RRF).
"Eligible entity ownership groups could have also had 20 or fewer locations to be eligible for RRF," the official said. "Large entities could be eligible under the statute."
Meantime, earlier COVID relief programs for businesses -- the Paycheck Protection Program and the Economic Injury Disaster Loan -- have been hampered by fraud. An SBA inspector general report in 2020 found $78.1 billion in potentially fraudulent loans and grants to ineligible entities. At least 300 fraudsters have been brought to justice with $1 billion seized, according to the House Small Business Committee.
Once passed in the House, the restaurant legislation will head to the Senate.