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Congress is cooking up another relief bill for small business, but it could quickly expand beyond just small business to balloon in size, according to a Wall Street Journal editorial. The $1.9 trillion bill passed last March included $50 billion for small businesses, including $28.6 billion in grants for restaurants, but this money has been depleted. Maryland Sen. Ben Cardin and Mississippi’s Roger Wicker are cobbling together another relief bill for restaurants. “The restaurant money is a fairness issue. Some restaurants got it and others did not,” Mr. Cardin said. Twenty-eight mayors recently sent a letter imploring Congress to replenish the Restaurant Revitalization Fund from the March spending bill. They say 86% of independent restaurants and bars that didn’t receive grants “risk permanently closing,” and 177,000 applicants have been denied relief. The editorial sympathizes with restaurants, which are also having to deal with rising prices and worker shortages. Some have faced a drop-off in business during Covid surges as customers stay home. Yet the commentary asserts that restaurants in certain states seem to be struggling much more in part because of population flight during the pandemic. Data from the website OpenTable shows restaurant reservations were up 19% in Florida, 14% in South Carolina and 9% in Arizona on Jan. 3 compared to the same date in 2019. Reservations were down 78% in Maryland, 52% in New York and 45% in Illinois. Treasury has allowed states and localities to use the $350 billion in budget aid from the March bill to help struggling households, small businesses and industries. States and localities are swimming in revenue, so they can assist their own restaurants, though some like New York have preferred to pay off public unions and grow government programs instead. Congress could also repurpose money that states and localities haven’t spent to replenish the restaurant fund or hospitals, but there’s no need to appropriate new funds, the editorial argues. It has already spent nearly $6 trillion on Covid relief. Read more.(Subscription required.)

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Consumers pulled back their spending in December, as spiraling coronavirus caseloads kept many Americans at home late in the holiday season. Spending fell 0.6 percent last month, the first decline since February, the Commerce Department said Friday. Rapidly rising prices meant that spending, adjusted for inflation, fell 1 percent, the New York Times reported. The decline offered some of the clearest evidence yet of how the spread of the Omicron variant is affecting the economy. Forecasters expect the toll to worsen in January, when a record-breaking jump in cases kept millions of people home from work. Still, Omicron may not have been the only factor in the December slump. Spending on services — the part of the economy hit hardest by the pandemic — actually rose last month, though more slowly than in the fall. Spending on goods, however, fell. That may reflect supply chain issues, either directly — as consumers struggled to find the products they wanted — or indirectly, as holiday shoppers shifted their spending to earlier in the fall to make sure their gifts arrived on time. So far, at least, there is little evidence that Omicron has done more lasting damage to the economy. Personal income rose 0.3 percent in December, led by an 0.7 percent increase in wage and salary income, suggesting that employers continued to hire workers and offer raises despite the latest Covid wave. Households, in the aggregate, should have plenty of money to spend once Omicron fades. The combination of rising income and falling spending pushed up the personal saving rate to 7.9 percent. Americans collectively have accumulated roughly $2.5 trillion in extra savings during the pandemic, the result of reduced spending and increased government aid. Not all families are so fortunate, however. Savings for lower-income households have dwindled in recent months, according to data from the JPMorgan Chase Institute. And December was the last month in which families received monthly payments through the expanded Child Tax Credit, which expired at the end of the year.

Gyms, movie theaters and other businesses hurt by the coronavirus pandemic would receive state grants under a $185 million spending bill that won initial legislative approval yesterday, the Associated Press reported. The 96-6 vote in the House came more than a month after the Legislature and Gov. Gretchen Whitmer enacted $409 million in aid for businesses that lost money — funded with federal discretionary COVID-19 aid. Applications for those grants are due by April 1 and must be disbursed by July 1. The next round of proposed grants, which also would be paid for with federal funds, would go to fitness centers, convention bureaus, community development banks, cinemas, and live music and entertainment venues. The bill would also offset lost revenue if separate legislation is passed to waive 2022 liquor license renewal fees and refund licensing fees for workers and restaurants hampered by past pandemic orders. The Senate will consider the legislation next.

U.S. auto retail sales are expected to dip in January as reduced manufacturing due to the Omicron variant, supply chain constraints and global inflation caused prices to soar amid high demand, consultants J.D. Power and LMC Automotive said, Reuters reported. Retail sales of new vehicles could fall 8.3% to 828,900 units from a year earlier, a report released by the consultants on Wednesday said. "The volume of new vehicles being delivered to dealerships in January has been insufficient to meet strong consumer demand, resulting in a significantly diminished sales pace," said Thomas King, president of the data and analytics division at J.D. Powers. The COVID-19 pandemic has caused bottlenecks in supply chains, driving up costs for everything from labor to raw materials. With consumer demand exceeding supply, new vehicle prices continue to go up. The average new-vehicle retail transaction price in January is expected to reach $44,905, the previous high for any month was in December 2021 at $45,283. Total new-vehicle sales for January 2022, including retail and non-retail transactions, are projected to reach 932,099 units, a 15.6% decrease from last year.
https://finance.yahoo.com/news/u-auto-sales-slip-january-140001706.html

Momentum is building on Capitol Hill for more coronavirus relief funding to support restaurants and other businesses struggling to stay afloat in the face of the latest wave of the pandemic fueled by the omicron variant, The Hill reported. Lawmakers involved in negotiations say that support has been building among members for legislation aimed at supporting businesses that have been disproportionately hit by the pandemic. Sen. Ben Cardin (D-Md.), chair of the Senate Small Business and Entrepreneurship Committee and a leader in discussions on the matter, expressed optimism Thursday when discussing he and Sen. Roger Wicker’s (R-Miss.) efforts to gain more backing for the push among their colleagues. Cardin said the primary focus in talks has been to replenish relief funding for restaurants after a previous batch of funds allocated by Congress ran out months back. The funding would come at a crucial time, advocates say, as restaurants continue to grapple with the economic effects of the ongoing pandemic, particularly as staffing shortages persist in parts of the nation and inflation tacks onto food costs.

Business leaders who were scrambling to survey employees on their vaccination status and line up scarce testing resources breathed a sigh of relief after the Supreme Court overturned the Biden administration’s vaccine-or-test mandate for large private employers, the Wall Street Journal reported. The relief was short-lived. The surging Omicron variant has renewed the debate over how long the coronavirus pandemic will adversely affect companies in a range of industries. As news of the Jan. 13 Supreme Court ruling receded, businesses turned to grapple with a new set of challenges around how to keep their employees safe and productive. The Supreme Court ruling has given way to a new reality: Without a consistent set of rules on COVID-19, businesses will now have to fend for themselves, navigating an increasingly complex and often contradictory patchwork of federal, state and local regulations and guidelines on vaccines, testing and other safety measures. U.S. companies have reacted in disparate ways to the Supreme Court ruling. Some companies and business associations have expressed disappointment over the ruling, while others say they prefer having flexibility to tailor their approach to their workforces.

Triple Crown Kitchen and Bath LLC recently filed a voluntary bankruptcy petition in U.S. Bankruptcy Court, Western District of Kentucky, Louisville Division, Louisville Business First reported. Triple Crown Kitchen and Bath, solely owned by Michael Gaines, reported a revenue of nearly $921,000 in 2021, but only $3,700 in total assets. It has no physical office space in Louisville. According to the bankruptcy filing, the company has 26 creditors, the vast majority of which are individual Louisville residents. Those individual claims range from $200 to nearly $24,000. Three claims were tied to businesses, including Louisville Glass Experts ($852), HomeAdvisor ($2,400) and Hatch ($499). In total, the claims against Triple Crown Kitchen and Bath add up to $163,500. The company indicated all of the claims are contingent and disputed.

Toys “R” Us board members and owners face new allegations of fraud and breach of duty over the company’s 2017 bankruptcy, Bloomberg News reported. Creditors claim in ongoing litigation that seven company directors have now said they knew they shouldn’t have approved executive bonuses and onerous bankruptcy loans at the outset of the case that put the retailer on the fast track to a sudden liquidation six months later. The additional debt served to keep Toys “R” Us in business during its restructuring, but cost it more than $500 million in fees and interest and came with strict terms, or covenants, court documents show. The costs were borne by trade creditors and employees who continued to work with the company on the promise of a successful turnaround, but went unpaid when it couldn’t comply with the debt terms and shut down. Meanwhile, the owners and directors who signed off on the ill-fated financing received immediate bonuses of as much as $2.8 million as part of the plan, according to the filings. The creditors allege the authorization of those bonuses violated federal criminal law.