Tag Archives: coronavirus pandemic

U.S. cities try new way to help the poor: give them money

By Andy Sullivan

WASHINGTON (Reuters) – Spurred by the coronavirus pandemic, dozens of U.S. cities are deploying a new tool in their war on poverty: cash.

At least 16 cities and counties are handing out no-strings-attached payments to some low-income residents, a Reuters tally found. At least 31 other local governments plan to do so in the months ahead.

That’s a departure from most U.S. anti-poverty programs, which provide benefits for specific needs like groceries or rent and require recipients to hold a job or look for work.

Advocates say the people receiving the aid, not bureaucrats, know best how to spend their money.

“It’s a complete rejection of the notion that we need to Big Brother people to a way out of poverty,” said Michael Tubbs, who set up the nation’s first “basic income” program in 2019 while he was mayor of Stockton, California.

Jonathan Pedro, 37, said he has been able to pay down debt and buy hockey equipment for his 11-year-old son thanks to the $500 monthly checks he gets through a Cambridge, Massachusetts program aimed at single parents.

“I’ve been trying really hard to bounce back and this check makes it so much easier,” he said.

Cash payments were a pillar of the U.S. safety net for much of the 20th century but fell out of favor amid criticism that they discouraged people from working. Democratic President Bill Clinton scaled them back, made them temporary and added a work requirement in 1996. Fewer than one in four poor families now get those benefits.

In recent years, the notion of a universal basic income has gained currency in the face of worries that automation will lead to widespread layoffs, and a belief among racial-justice advocates that the current system is inadequate and demeaning. Andrew Yang made it the centerpiece of his long-shot bid for the 2020 Democratic presidential nomination.

The federal government provided a proof of concept over the past two years, sending more than $800 billion to households in three COVID-19 aid packages. Washington delivered another $93 billion to 36 million families this year through an expanded child tax credit.

Those relief packages included $500 billion to state and local governments, and at least 16 local governments are using the money to set up Stockton-style basic income programs for low-income residents, records show.

Others are drawing on funds provided by Mayors for a Guaranteed Income, an advocacy group formed by Tubbs, or private philanthropy.

“We’re 60 years into the war on poverty, and the notion of giving money to poor people still feels profoundly new. Maybe that’s the problem,” said Melvin Carter, the mayor of St. Paul, Minnesota, which launched a basic income program last year.

Unlike Yang’s proposal, which would have covered everybody, the new city-based programs are small in scale, typically serving several hundred families, and are aimed only at low-income people.

Some cities invite people to apply and then do a random drawing. Others focus on specific populations: St. Paul targets families with newborn children, while Pittsburgh says half of its 200 participants will be Black women.

Durham, North Carolina, will provide checks to people getting out of prison. A program in Jackson, Mississippi, focuses on Black mothers in public housing.

Advocates hope these efforts will ultimately convince Washington to set up a national basic income program.

They point to a sheaf of studies that show positive results. Participants in Stockton’s program were more likely to be working full-time, while participants in Jackson were more likely to pay their bills on time. One survey found that recipients spent less on alcohol and tobacco than they did before.

‘ALTERNATIVE OPTIONS’

With many U.S. businesses struggling to hire workers, some say it would be better to expand existing programs.

“If the goal is more work, then we have alternative options,” said Kevin Corinth, who served as a top White House economist in the Trump administration and is now at the University of Chicago’s Harris School of Public Policy.

A national program also would be expensive. One proposal to keep every American above the poverty line, set at $26,500 for a family of four in 2021, would cost $876 billion, more than doubling U.S. anti-poverty spending. Another would cost more than twice that amount.

Advocates say their first step is to shore up the expanded child tax credit, which is due to expire at the end of this year. Cost concerns prompted Democrats to cut a permanent expansion from President Joe Biden’s imperiled $1.75 trillion “Build Back Better” spending proposal.

In the meantime, low-income participants like Andrea Coleman, 40, are finding it a little easier to make ends meet. The mother of three, who works as a home nurse, said she plans to buy a proper pair of shoes to replace the foam sandals that serve as her only footwear in St. Paul, Minnesota, where the temperature is expected to dip to 7 degrees Fahrenheit (-13.9° Celsius) this week.

“It’s that extra money that helps get over that little hump, helps get that burden off your back,” she said. “It gives me a free heart.”

(Reporting by Andy Sullivan; Editing by Scott Malone and Paul Simao)

‘Tidal wave’: Omicron could put U.S. COVID-19 surge into overdrive

By Joseph Ax and Barbara Goldberg

(Reuters) – Two years into the coronavirus pandemic, the United States is confronting another dark winter, with the red-hot Omicron variant threatening to further inflame an already dangerous surge of cases.

Hospitalizations for COVID-19 have jumped 45% over the last month, and cases have increased 40% to a seven-day average of 123,000 new infections a day, according to a Reuters tally.

Pfizer Inc, one of the chief vaccine makers, on Friday predicted the pandemic would last until 2024 and said a lower-dose version of its vaccine for children ages 2 to 4 generated a weaker-than-expected immune response, which could delay authorization.

The Omicron variant appears to be far more transmissible than previous iterations of the virus and more agile in evading immune defenses, according to early studies.

Public health officials say it is likely to become the dominant variant in the country, following fast-moving spreads in countries such as South Africa and the United Kingdom, and could strain hospitals still struggling to contain this summer’s Delta variant surge.

“GET BOOSTED NOW. Tidal wave of Omicron likely coming to a hospital near you soon,” Dr. Tom Frieden, former chief of the Centers for Disease Control and Prevention (CDC), posted on Twitter.

Preliminary data in South Africa suggests Omicron leads to milder illness than the Delta variant, which is still driving much of the current wave. But a British study released on Friday found no difference in severity between the two variants.

Either way, Omicron’s extraordinary level of infectiousness means it could cause many additional deaths, the top U.S. infectious disease expert, Dr. Anthony Fauci, said on Friday.

“When you have a larger number of people getting infected, the total amount of hospitalizations is going to be more. That’s just simple math,” Fauci told CNBC.

Fauci also said officials are discussing whether to redefine what it means to be “fully vaccinated” to include booster shots, which according to early studies significantly improve protection against severe cases from the Omicron variant. President Joe Biden warned on Thursday that unvaccinated Americans face “severe illness and death” in coming months.

The latest surge is creating yet another round of disruptions to daily life, though widespread lockdowns have not been put in place. Several states have hit alarming levels of cases and hospitalizations.

Exhausted hospital workers in Ohio who are in their 22nd month of pandemic response will be getting some help starting on Monday from 1,050 National Guard troops – including 150 nurses, emergency medical technicians and others with medical training – being deployed to hospitals around the state, Governor Mike DeWine told a news conference on Friday.

In New York City, Radio City Music Hall announced that Friday’s four performances of the Rockettes’ iconic Christmas show were canceled due to “breakthrough COVID-19 cases in the production.” Broadway shows have also canceled performances this week after outbreaks among vaccinated cast members.

Both the National Hockey League and National Basketball Association postponed games this week, and the NBA and National Football League imposed heightened COVID-19 restrictions after dozens of players tested positive.

The CDC released a new “test-to-stay” strategy on Friday that allows unvaccinated children to remain in school even if they are exposed to the virus.

The protocol is intended to replace automatic quarantines, which have required tens of thousands of students to miss school days this fall.

“If exposed children meet a certain criteria and continue to test negative, they can stay at school instead of quarantining at home,” CDC Director Dr. Rochelle Walensky told reporters.

Dr. Leana Wen, a public health professor at George Washington University, on Friday praised the test-to-stay school policy change but said implementation would still be a challenge, in part due to persistent testing shortages.

“I’m not sure how we’re able to literally implement this test-to-stay when we don’t even have enough testing for people who are symptomatic,” she told CNN.

(Reporting by Joseph Ax in Princeton, New Jersey, and Barbara Goldberg in Maplewood, New Jersey; Additional reporting by Nandita Bose, Carl O’Donnell, Susan Heavey, Caroline Humer, Mrinalika Roy, Leroy Leo and Frank Pingue; Editing by Howard Goller)

Iran wants resumption of nuclear talks that leads to lifting U.S. sanctions -Raisi

DUBAI (Reuters) – Iran wants a resumption of nuclear talks with world powers to lead to the removal of U.S. sanctions, Iranian President Ebrahim Raisi told the annual U.N. General Assembly on Tuesday in a pre-recorded address.

“The Islamic Republic considers the useful talks whose ultimate outcome is the lifting of all oppressive (U.S.) sanctions,” Raisi said in his address.

Hardline cleric Raisi, who is under personal U.S. sanctions over allegations of human rights abuses in his past as a judge, said the U.S. sanctions, imposed by former President Donald Trump in 2018, “were crimes against humanity during the coronavirus pandemic.”

Harsh sanctions reimposed by Trump since 2018 have prompted Tehran to violate the deal’s limits. However, Tehran says its nuclear steps are reversible if Washington lifts all sanctions.

Indirect talks between Iran and the United States to revive the 2015 nuclear pact stopped two days after Raisi was elected as Iran’s president in June. Parties involved in the negotiations have yet to announce when the next round of negotiations will resume.

However, Tehran said on Tuesday that talks with world powers in Vienna to reinstate the nuclear pact would resume in a few weeks.

(Writing by Parisa Hafezi; Editing by Chris Reese and Leslie Adler)

World needs to spend another $100 trln on U.N. fight against global woes – report

By Simon Jessop

LONDON (Reuters) – Global goals tackling poverty, inequality, injustice and climate change face a $100 trillion funding shortfall and are likely to be missed unless 10% of global economic output is directed to the U.N. targets every year to 2030, a report on Friday said.

The U.N.’s Sustainable Development Goals set targets on everything from the environment to health and equality and have the support of all member states, yet the supply of finance from governments, investors, banks and companies to help meet them has consistently fallen short.

Hampered by the impact of the coronavirus pandemic, the annual shortfall is now up to $10 trillion a year, the landmark report by the United Nations and the Force for Good Initiative, backed by the finance industry, shared with Reuters showed.

“Humanity is at a crossroads. More than ever, all stakeholders must partner to ensure this crisis is the beginning of a new economics for sustainable development with prosperity for all,” said Chantal Line Carpentier, Chief, UN Conference on Trade and Development in the New York Office of the Secretary-General.

Adding the costs of financing the global transition to a low-carbon economy to limit global warming, and total funding out to 2050 comes in at $200-$220 trillion, the report added.

The SDGs are a global “to-do” list addressing such issues as war, hunger, land degradation, gender equality and climate.

While more than 1.1 billion people have been lifted out of extreme poverty since 1990, failure to accelerate efforts on the SDGs risked fueling conflict and crises, they said.

After a slow start, the world’s finance industry has begun to do more, with $9.5 trillion committed to 2030 and a record $2.1 trillion deployed in 2020. However there are imbalances in the way the money is being invested, the report said.

While climate change-related goals represented 20% of the funding gap, the theme was currently attracting 44% of the committed capital, the report said. By contrast, human, economic and social-related goals made up more than half of the funding gap but were taking in just 32% of current funding.

“The financial sector is playing a rapidly expanding role in financing the SDGs and the transition to a sustainable digital future,” said Ketan Patel, Chairman of Force for Good and CEO and Co-Founder of Greater Pacific Capital.

“However, with less than ten years to go, there is a pressing need to explore even bigger and more radical solutions than those being deployed today.”

Among other leading financial companies involved in the initiative include BlackRock, JPMorgan, Bridgewater Associates and Schroders, the report said.

(Reporting by Simon Jessop, Editing by William Maclean)

U.S.-bound migrants fill Colombia town as COVID-19 border closures lifted

By Steven Grattan

NECOCLI, Colombia (Reuters) – After traveling for more than a year by ship, bus and car from Africa in hope of reaching the United States, Simon Gyamfi found himself stuck in a remote tourist resort on the coast of Colombia with thousands of other migrants.

The 42-year-old carpenter, a Christian, fled his home in Ghana because of a dispute with his late wife’s Muslim family, he said, and took a month-long ocean voyage to Brazil. The closure of borders due to the coronavirus pandemic left him stranded there for months.

Now, after the frontiers finally reopened, he has made his way by road to the northern Colombian town of Necocli, a gateway for migrants heading northward into Central America.

Every year, thousands of migrants pass through the small town, looking to catch a boat across the Gulf of Uraba toward the jungles of the Darien Gap on the isthmus of Panama.

There, people smugglers guide groups across the wild, road-less region, one of the most treacherous barriers on the clandestine route to the United States.

Now borders closures have lifted, the number of migrants arriving in Necocli is soaring.

In a typical year, an estimated 30,000 migrants pass through Necocli. But by August of this year, 25,000 have already been through, according to Colombian government figures.

Panama’s Foreign Affairs ministry said it expects to receive over 70,000 migrants crossing the country en route to the U.S. by the end of 2021, an unprecedented number in the country’s history.

The town has been struggling to accommodate migrants from Latin America and beyond – many of them driven by the economic hardship worsened by the pandemic – clamoring for scarce places on boats across the Gulf. Thousands crowd hotels and the beach as they wait weeks for a spot.

Colombia and Panama vowed last week to impose order on the migrant flows as they seek support from allies, including the United States, after the number of travelers stranded in Necocli topped 10,000.

The majority of the migrants moving through Necocli are Haitian or Cuban, fleeing dire economic circumstances in their homelands. But Reuters spoke to several others from further afield, including African nations such as Ghana and Mali.

Gyamfi had been in Necocli for almost a week, paying $7 a night for a hotel room.

“The journey has been hard and full of surprises. Last month, a friend of mine died on the road,” said the widowed carpenter, who hopes to save enough to bring his young daughter to join him if he reaches the United States.

“It takes a lot of money to get here and great risks.”

Necocli became a staging area for migrants just five years ago. Though it has thrived by charging migrants in dollars, not Colombian pesos, local officials say public services and housing in the town of 20,000 are not robust enough to cope with recent numbers.

DANGEROUS CROSSING

More migrants has meant increased profits for many in Necocli: especially for the guides, called coyotes, who take people on the week-long trek through the Darien Gap.

“Everyone here is benefiting from the migrant issue,” said a local guide leader, a man in his early 40s, who asked to remain anonymous for fear of attracting the attention of the authorities.

Colombia’s government has warned of criminal dangers to migrants moving through Darien, as well as the risk of injury or disease.

The man acknowledged some groups – usually comprising 20 migrants and a guide – have been robbed and women sometimes suffer rape.

The guides have increased the size of their groups to meet recent demand, but the man denied any criminal connections.

“People look at us like the monsters of this place. They think we are rich,” he said. “Those who do this make a living day to day. The coyotes aren’t millionaires.”

At 6 a.m. the sound of adhesive tape being ripped from its rolls sounded around Necocli’s port, as migrants with spots on that day’s boat frantically sealed their possessions into plastic trash bags for the 2.5-hour, $50 boat ride across the Gulf of Uraba.

The day Reuters visited, the mayor of Acandi – which lies on the other side of the Gulf, near the Panama border – decided to let just 200 of the usual 1,000 migrants cross because of what he said were environmental and security concerns.

The decision caused chagrin among local Colombian officials and nonprofits – who feared some migrants might make a dangerous informal crossing at night. In Necocli, angry migrants who had paid days in advance for boat tickets protested in the streets.

In Capurgana, 44-year-old Haitian Lenos Dorvilien, was frustrated after he had traveled across the Gulf ahead of his wife and 12-year-old daughter, who were now stuck in Necocli.

The family had left their homeland for Chile in 2016, but found work there was badly paid. They had planned to leave sooner but were delayed by coronavirus and finally left two weeks ago by bus.

Chile – which has one of the highest levels of income per capita in Latin America – is a popular destination for Haitians, but migrants there regularly complain of experiencing xenophobia.

“I put up with living in Chile but it’s a racist country,” said Dorvilien. “I had to work hard like the devil to be able to leave.”

Dorvilien eventually took another boat back to be with his family. Their money for hotels exhausted, they slept on the beach.

(Reporting by Steven Grattan, additional reporting by Aislinn Laing in Santiago; Editing by Julia Symmes Cobb, Aurora Ellis and Daniel Flynn)

Egypt’s Sisi calls for first bread price rise in decades

By Omar Fahmy

CAIRO (Reuters) – Egyptian President Abdel Fattah al-Sisi said it was time to increase the price of the country’s subsidized bread, revisiting the issue for the first time since 1977 when then president Anwar Sadat reversed a price rise in the face of riots.

Sisi on Tuesday did not specify the amount of any potential increase, but any change to the food support system in the world’s largest wheat importer would be highly sensitive. Bread was the first word in the signature slogan chanted in the 2011 uprising that unseated former president Hosni Mubarak.

Bread is currently sold at 0.05 Egyptian pounds ($0.0032) per loaf to more than 60 million Egyptians, who are allocated five loaves a day under a sprawling subsidy program that also includes the likes of pasta and rice, and costs billions of dollars.

“It is time for the 5 piaster loaf to increase in price,” Sisi said at the opening of a food production plant. “Some might tell me leave this to the prime minister, to the supply minister to (raise the price); but no, I will do it in front of my country and my people.

“It’s incredible to sell 20 loaves for the price of a cigarette.”

Previous attempted changes to the subsidy program, which caused deadly bread riots in 1977, were agreed as part of former President Anwar Sadat’s loan deal with the International Monetary Fund (IMF).

Sisi’s government has also turned to the IMF, which granted a $12 billion loan in 2016 and a one-year $5.2 billion loan last year, but specified that food subsidies should only reach those most in need.

The loan program also required higher fuel and electricity prices.

“I’m not saying we make it significantly more expensive, to as high as it costs to make it, 65 or 60 piastres, but (increasing the price) is necessary,” Sisi said.

“Nothing stays stagnant like this for 20 or 30 years, with people saying that this number can’t be touched.”

SUBSIDY PROGRAMME

The Egyptian supply ministry will immediately begin studying raising the bread price and will present its findings to the cabinet as soon as possible following Sisi’s remarks, minister Ali Moselhy told local newspaper El-Watan.

Sisi has sought to rein in Egypt’s massive subsidy program by targeting those deemed to be sufficiently wealthy while leaving bread prices untouched.

Hussein Abu Saddam, head of the farmer’s syndicate, told Reuters: “The decision is right and comes at a very suitable time. It helps us finish with the old practices and customs, in which the president was always afraid of touching bread prices, fearing the outcry of the poor.”

A hashtag which translates as “except the loaf of bread” trended on Twitter in Egypt by Tuesday afternoon with more than 4,000 tweets.

Last year the country shrank the size of its subsidized loaf of bread by 20 grams, allowing bakers to make more fixed-price loaves from the standard 100kg sack of flour.

“I hope that this is not poorly received, as if we are planning to make a big jump in prices … we are only talking about achieving balance,” Sisi added.

In its 2021/22 budget, Egypt allocated 87.8 billion Egyptian pounds ($5.6 billion) to subsidize supply commodities and support farmers.

Of that amount, 44.8 billion pounds are allocated towards the bread subsidy.

The government set a wheat price assumption of $255.00 per tonne in fiscal year 2021/2022, from $193.90 a tonne the previous year, according to the budget. Egypt last bought wheat on Monday for $293.74 a tonne c&f.

Wheat prices globally have rallied over supply concerns during the coronavirus pandemic.

($1 = 15.7100 Egyptian pounds)

(Reporting by Omar Fahmy; Additional reporting by Malaika Tapper; Writing by Nafisa Eltahir and Nadine Awadalla; Editing by David Goodman and David Holmes)

Thousands stuck in Colombia’s Caribbean amid migration surge

BOGOTA (Reuters) – Some 9,000 migrants are stranded in a Caribbean municipality in Colombia amid a surge of people passing through on their way to north America following the re-opening of international borders post-lockdown, the Colombian migration agency said.

The irregular migrants – who are mostly Haitians but also include Venezuelans and Cubans, as well as a number from African countries – are stuck in Necocli, in Colombia’s Antioquia province, migration agency director Juan Francisco Espinosa said in a virtual press conference.

“This is a recurring and historical phenomenon. Colombia is not the cause or the destination of this migration,” Espinosa said.

The migrants hope to pass from Necocli and on through the dangerous Darien Gap towards Panama and then onwards to north America, principally the United States or Canada, he added.

Though the region typically sees 30,000 migrants pass through in a normal year, Espinosa said just 4,000 people transited the region last year due to the impact of measures implemented by countries to control the spread of coronavirus.

However, with borders opening up, the level of migration in the region so far in 2021 has been much greater compared to the same period last year, Espinosa added.

“This year is presenting numbers that are absolutely alarming, where right now more than 25,000 irregular migrants have passed through this part of the country,” he said.

Some 74% of the more-than 25,000 migrants recorded passing through the region in 2021 are Haitian, a migration agency spokesman told Reuters.

Colombia reopened its land and river borders with Brazil, Ecuador, Peru and Panama in May, following a 14-month closure it used to try and curb the spread of the coronavirus pandemic.

The country opened its border with Venezuela in early June.

(Reporting by Oliver Griffin; Editing by Raissa Kasolowsky)

Canada border guards vote to strike days ahead of U.S. border reopening

By Moira Warburton

VANCOUVER (Reuters) – Canadian border guards and customs officials voted on Tuesday to go on strike just days ahead of the reopening of the border with the United States, unions representing the workers said, after working for three years without a contract.

A strike would slow down commercial traffic at the land border, the unions said, as well as impact international mail and collection of duties and taxes. But a spokesperson for the Canada Border Services Agency (CBSA) said 90% of employees have been identified as “essential” so will continue to work in the event of a strike.

Last week, Canada announced plans to reopen its border to fully vaccinated Americans on Aug. 9, and allowing international travelers starting on Sept. 7. The border has been shut for non-essential travel for more than 16 months because of the coronavirus pandemic.

The Public Service Alliance of Canada (PSAC) and the Customs and Immigration Union (CIU) said in a joint statement that strike action could begin as soon as Aug. 6 after 8,500 members voted in favor of the action. Contract talks reached an impasse in December 2020, the unions said.

“Taking strike action is always a last resort, but we’re grappling with systemic workplace harassment issues that must be addressed,” Mark Weber, CIU national president, said.

CBSA spokesperson Judith Gadbois said officers have proven their resilience since the beginning of the pandemic by helping to prevent the spread of the virus and its variants.

“We expect that our officers will continue to fulfill their duties with the highest level of integrity and professionalism.”

(Reporting by Moira Warburton in Vancouver; Additional reporting by Anna Mehler-Paperny in Toronto; editing by Grant McCool)

From ‘congratulations’ to ‘fully canceled’: California cafe owners hit roadblock

By Ann Saphir

(Reuters) – After more than a year of heavy losses at their two cafes in the San Francisco Bay Area, Amy and Chris Hillyard were relieved to get word in May that they’d been approved for a $381,000 grant from the U.S. Small Business Administration.

The money was from a fund earmarked by Congress for restaurants hurt by the economic fallout from the coronavirus pandemic, like the Hillyards’ Farley’s SF and Farley’s East operations.

Equal to their losses last year, it would let the couple pay back debt, hire new employees, expand opening hours, replace a broken freezer, buy tables and chairs for outdoor dining, and do all the other things Chris Hillyard says need to get done “to get back to normal and be ready for normal, come September,” when more workers might be expected to return to nearby office buildings.

Then, last month, the Hillyards learned they won’t get the money after all.

“We are back in a holding pattern” Chris Hillyard said. “It’s not a very fun place to be.”

Even after roughly $800 billion in aid from the federal Paycheck Protection Program (PPP) and nearly $30 billion more earmarked for hard-hit restaurants this year, small U.S. businesses face an uncertain outlook.

Many enterprises that were thriving before the pandemic are still hobbled.

At the same time, a widely predicted wave of bankruptcies has not materialized, with commercial bankruptcies in 2020 at their lowest level in five years and year-to-date filings lower still, according to data provider Epiq AACER.

Complicating the picture are regional discrepancies.

Some 35% of San Francisco Bay Area establishments like those of the Hillyards still report a large negative impact from the pandemic and more than 41% think it will take more than another six months to return to normal, a U.S. Census Bureau survey from mid-July shows. Meanwhile, in Atlanta, only 21% and 31%, respectively, of respondents reported the same concerns.

That suggests a genuine national recovery may be some ways off.

“The problem is for the economy, the pandemic has gone on longer than we thought, and it looks like different industries and different geographies have been affected very differently,” said Karen Dynan, an economics professor at Harvard University. “It’s just another reason that we are not going to see the economy go back to full employment overnight.”

NOT BACK TO NORMAL

Reuters has been following the Hillyards and their cafe business since March 2020, when they laid off their entire staff after California shut down all “non-essential” businesses. They reopened six weeks later with a PPP loan, got through the summer with help from donors like Golden State Warriors basketball star Stephen Curry, and pulled through the winter viral surge and renewed government curbs on business with a second PPP loan.

But despite the state’s decision to end all pandemic-era restrictions in mid-June, Farley’s in San Francisco is making only 70% of its pre-pandemic sales. Farley’s East in Oakland – the bigger operation of the two – is at just 40%, and any hope for improvement depends on how businesses manage their employees’ return to offices.

“I think the service sector that supported the downtown work community is one we should be worried about it,” Dynan said, because many businesses will likely allow at least some remote work in the post-pandemic period. “Breakfast places, lunch shops, dry cleaners, pharmacies downtown – they are just not going to see demand that’s as robust.”

The Hillyards have spent the $520,000 in federal aid they received, most of it on payroll for their 20 employees.

The latest grant the Hillyards were counting on was part of the $1.9 trillion pandemic relief package passed by Congress and signed by President Joe Biden in March, which included $28.6 billion for restaurants that lost money during the pandemic.

By the time the restaurant fund had run out, the owners of 278,000 restaurants had applied. Some 101,000 got grants ranging from as large as $10 million to as small as $1,000, critical support for one of the sectors hardest hit by the pandemic.

The Hillyards were relieved to be among them.

“Congratulations,” the May 18 email from the SBA read. “Your SBA Restaurant Revitalization Fund application has been approved.” It continued, “The SBA will now process the funding of this award directly to your Bank account within 3-7 business days from this notification.”

Weeks went by. The Hillyards made inquiries. “Be assured the award funds are reserved for those applications that have been fully approved and will be sent,” one SBA portal response reviewed by Reuters said.

On June 23, Chris Hillyard received another email from the SBA. “We regret to inform you that, due to recent court rulings, the SBA will not be able to disburse your Restaurant Revitalization Fund award,” it read.

A legal group founded by Stephen Miller and Mark Meadows, who held senior positions in former President Donald Trump’s White House, had sued the SBA in Texas, arguing that the Biden administration’s efforts to prioritize applicants on the basis of race and gender was unconstitutional.

On June 11, the court barred the SBA from handing out any more of the funds to priority applicants like Farley’s, which is majority woman-owned because of Amy Hillyard’s larger share in the business.

“In coming days … you will see the status of your application in SBA’s portal change to ‘fully canceled,'” the June 23 email said. Some 2,964 other restaurant owners got similar notices, SBA said. A spokesperson for the SBA said the agency was “frustrated” with the outcome and remains committed to helping disadvantaged businesses.

The Independent Restaurant Coalition, a U.S. trade group which lobbied to get the grant program into the pandemic relief bill in the first place, is now trying to convince Congress to replenish the program’s funds.

To the Hillyards, that’s cold comfort, even as the economy as a whole, despite the rising tide of COVID-19 infections, surges back to life. Their cafes continue to lose money each month.

“Everything is going back to normal – but our business is not back to normal, and it’s going to take us a lot longer to get there,” Chris Hillyard said.

(Reporting by Ann Saphir; Editing by Dan Burns and Paul Simao)

Fed’s Powell keeps to script on jobs recovery, feels heat on inflation front

By Howard Schneider

WASHINGTON (Reuters) – Federal Reserve Chair Jerome Powell on Wednesday pledged “powerful support” to complete the U.S. economic recovery from the coronavirus pandemic, but faced sharp questions from Republican lawmakers concerned about recent spikes in inflation.

In testimony to the U.S. House of Representatives Financial Services Committee, Powell said he is confident recent price hikes are associated with the country’s post-pandemic reopening and will fade, and that the Fed should stay focused on getting as many people back to work as possible.

Any move to reduce support for the economy, by first slowing the U.S. central bank’s $120 billion in monthly bond purchases, is “still a ways off,” Powell said, with millions of people who were working before the crisis still to be pulled back into the labor force.

“The high inflation readings are for a small group of goods and services directly tied to the reopening,” Powell testified, language that indicated he saw no need to rush the shift towards post-pandemic policy.

Representative Ann Wagner, a Republican from Missouri, challenged that conclusion, relaying what’s likely to be a refrain from lawmakers as long as inflation continues to rise: their constituents are getting worried.

At a prior hearing in February “you reiterated that price spikes were temporary. I can tell you that the families and businesses I represent are not feeling that these price spikes are temporary,” Wagner said.

“The incoming data have been higher than expected and hoped for but are still consistent” with a temporary bout of higher prices, Powell responded.

“It is housing, appliances, food prices, gas,” Wagner retorted, a sign of what could become growing political pressure on the Fed to get tougher on inflation if the spikes in prices continue.

Representative Anthony Gonzalez, a Republican from Ohio, took aim at a new Fed framework that aims to encourage higher employment by letting inflation run “moderately” above the central bank’s 2% target “for some time”

“How long is ‘some time’?” Gonzalez asked, arguing that the Fed’s current policies may be doing little to encourage employment at a time when employers are already posting record numbers of jobs.

“It depends,” Powell said, demonstrating the dilemma he faces if prices continue rising. “Right now inflation is well above 2%. … The question for the (Federal Open Market) Committee will be where does this leave us in six months.”

U.S. Treasury yields fell after the release of Powell’s prepared testimony earlier on Wednesday and remained lower even though prices of factory inputs rose at a higher-than-expected pace in June, an indication markets construed his comments as a sign the monetary taps will stay open.

Powell’s remarks were notable as well for excluding any mention of risks to the recovery from the coronavirus Delta variant, with the Fed chief saying the central bank expects strong upcoming job gains “as public health conditions continue to improve.”

The Fed’s June meeting saw officials begin a move towards post-pandemic policy, with some of them poised to tighten financial conditions sooner to ensure inflation remains contained. Renewed coronavirus-related risks, if they materialize, could push the Fed in the other direction of keeping support for the recovery in place longer in case household and business spending wane amid a rise in new infections.

Falling Treasury bond yields have indicated concern among investors about slowing U.S. economic growth, even as new data on prices this week showed consumers paying appreciably more for an array of goods and services, including appliances, fabric, beef and rent.

In a report to Congress last week, the Fed said that as the “extraordinary circumstances” of the reopening subside, “supply and demand should become better aligned, and inflation is widely expected to move down.”

RISING DELTA

While each month of high inflation makes it harder to stick to that conviction, Powell for now is keeping to the Fed’s core narrative of a job market that still needs massive help from the central bank to restore it to its pre-pandemic health and minimize the long-term damage from a historic, virus-driven calamity.

The Fed has said it will not reduce its bond-buying program absent “substantial further progress” in regaining the roughly 7.5 million jobs still missing since the onset of the pandemic in March 2020, a threshold policymakers feel will likely be met later this year.

That hinges, however, on continued reopening of the economy, recovery in the travel, leisure and other “social” industries devastated by the health crisis, and the willingness of currently unemployed or homebound individuals to fill the record number of jobs on offer.

When Powell last spoke about the economy at a news briefing after the end of the June 15-16 policy meeting, new daily coronavirus infections were falling toward recent lows, and the Fed dropped language from its policy statement that the pandemic “continues to weigh on the economy.”

Since then the Delta variant has pushed the seven-day moving average of cases from 11,000 to above 21,000, and health officials are concerned about the spread of the variant in parts of the country where vaccination rates are low. The numbers are more ominous globally.

Powell is scheduled to appear before the U.S. Senate Banking Committee at 9:30 a.m. (1330 GMT) on Thursday.

(Reporting by Howard Schneider; Editing by Dan Burns, Andrea Ricci and Paul Simao)