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Tuesday, Jun 6, 2023

Federal Stimulus Package Reopens PPP

Leaders of the U.S. Senate on Sunday announced a deal with the House of Representatives to pass a $900 billion economic stimulus package that includes forgivable loans for businesses and single payments to qualifying adults.The centerpiece of the legislation is a $284 billion refill of the Paycheck Protection Program, which uses the Small Business Administration as a vehicle to deliver forgivable payroll loans to small businesses.In addition to business support, the legislation includes stimulus payments of up to $600 for qualifying adults and dependent children, with the amount decreasing for people who made more than $75,000 in 2019. People who made more than $99,000 in 2019 won’t get any money.Also, the bill includes a $300 weekly supplement to federal unemployment benefits that will last up to 11 weeks. That program is expected to cost $180 billion.Notably absent from the bill is direct support for restaurants. House Democrats had proposed a “Restaurants Act” in stimulus negotiations earlier this year that would have allocated $120 billion for grants to restaurants and bars that are not publicly traded and have annual revenue of less than $1.5 million, but the agreed-upon legislation does not include that that provision.The only extra relief for restaurants is baked into the PPP program. In this new round, restaurants can apply for loans of up to 3.5 times their monthly payroll costs. Other businesses can only apply for loans of 2.5 times payroll.National Restaurant Association Chief Executive Tom Bene said in a statement: “A second round of PPP, combined with unique enhancements for the restaurant sector, will provide critical access to capital. … The action taken by Congress today will keep tens of thousands of restaurants from closing in the coming months.”However, the Independent Restaurant Coalition saw it differently, and released a statement saying the bill “falls woefully short of giving 11 million independent restaurant workers the job security they need before the holidays.” The trade group pointed out the first round of PPP loans did little to prevent mass layoffs and closures in the restaurant industry.The stimulus package includes an industry-specific bailout for movie theaters. A “Save our Stages” provision allocates $15 billion for live venues, independent movie theaters and other “cultural institutions.” It is unclear whether large movie theater chains such as AMC and Regal will benefit from the package.Of particular importance to the Valley economy, cruise lines were left out of the bill, as they were in the $2.2 trillion CARES Act in March. Airlines, however, will receive payroll support from a $15 billion pool. The commercial aviation industry previously received $25 billion under the CARES Act.Of the stimulus package’s remaining budget, $82 billion has been set aside for education programs; $19 billion for childcare; $16 billion for vaccine development; and $25 billion for renters to pay utilities and rent during the eviction ban.

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