GOP chairman: Large chains should not have received small business coronavirus aid

Sen. Chuck Grassley (R-Iowa), the chairman of the Senate Finance Committee, said on Tuesday that large chain restaurants should not have received money under a small-business aid program. 

Grassley was asked about Shake Shack and Ruth’s Chris Steak House both disclosing recently that they had received millions of dollars in loans under the Paycheck Protection Program (PPP). 

“They should not have gotten it because they had more than 500 employees. They could have legitimately got some help from another government program. … They should have gone to the Federal Reserve to get it, and not got it from the small-business program,” Grassley told C-SPAN. 

Grassley’s comments mark the latest criticism from lawmakers amid growing frustration that nationwide chains and companies received funds from the program, which was designed to provide loans and grants to businesses with fewer than 500 employees. 

Ruth’s Chris Steak House, which has 150 locations and $468 million in revenue, received $20 million in loans. The sandwich chain Potbelly, which has more than 400 locations, and Shake Shack, with more than 200 branches, each received $10 million from the fund.

Shake Shack subsequently announced that it would return its loan. 

The large companies say they were able to apply for the small-business funding because of an exemption for restaurants and hotels, which have been hard hit by the coronavirus pandemic, that allowed them to qualify as long as they didn’t have more than 500 employees at one location. 

Sen. Rick Scott (R-Fla.) said that “millions of dollars are being wasted” under the PPP, which ran out of an initial $349 billion late last week. 

Sen. Marco Rubio (R-Fla.), who chairs the Senate Small Business Committee, added that he would subpoena companies as part of his panel’s oversight of PPP distribution if the businesses would not comply voluntarily. 

“This fall, the Senate Committee on Small Business and Entrepreneurship will conduct aggressive oversight into the use of the PPP. If companies are not forthcoming, the Committee will use its subpoena power to compel cooperation,” Rubio said.