Main Street is struggling with climbing prices on inventory, supplies, labor, transportation and more due to rising inflation, right on the heels of COVID-19-related inflation, and many are hoping for a helping hand. In a survey conducted Jan. 24-30, 2022, 62% of small business owner respondents indicated they supported more federal assistance for small businesses.
However, Congress gave no signal that financial relief for small businesses would be forthcoming in recent discussions over the federal government’s spending bill. Any future pandemic-related relief seems likely to be evaluated by Congress on a case-by-case basis rather than part of a sweeping package.
For the time being, Congress’ time appears to be consumed with dealing with the Russia-Ukraine war, President Joe Biden’s Build Back Better plan and Ketanji Brown Jackson’s Supreme Court confirmation hearing. As a result, business groups fear pressing concerns like the disrupted supply chain, rising inflation, labor shortages and soaring energy costs will not get the attention they need.
Industry groups had been holding out hope for the rekindling of measures like the Employer Retention Credit and Restaurant Revitalization Fund. The latter programs came with price tags of $50 billion and $8 billion respectively. However, given the hefty price tag of the RRF and the fact that it targeted only one industry, efforts had shifted to restoring the ERC, whose end date was moved up from its original Jan. 1, 2022, to Oct. 1, 2021.
According to policy watchers, all may not be lost. Federal spending for several agencies is higher now than it was during the Trump administration. Some consider it a good sign that the current administration is undertaking greater social investment. On the state level, the allocation of funds provided in the American Rescue Plan — which at one point was in jeopardy of being clawed back in an effort to balance the budget — has provided an upside for small businesses. The plan gave states considerable latitude in terms of how they distributed the funds, and many allocated them to support small firms.
In the meantime, small business proponents like the Main Street Alliance favor grants over programs like the Paycheck Protection Program, which included forgivable loans but were not made available to many eligible candidates. “Grants are much more efficient and provide relief more quickly,” said Didier Trinh, the organization’s director of policy and political impact. “States know how to administer grant programs at the local level.”
According to small business owners, their three main challenges warrant support from the White House, Democrats and Republicans alike. But many think the legislative docket in the run-up to midterm elections will not have much room for small business relief measures that could help them stay afloat in this year of rising costs and inflation.
