Does not matter: How Covid-19 is exacerbating racial disparities in food security — PPP money flowed to restaurant chains

Jul 07, 2020

With help from Ryan McCrimmon and Doug Palmer

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Quick Fix

— Covid-19 is exacerbating long-standing racial disparities in food insecurity rates. Black and Hispanic households with children are nearly twice as likely to be struggling with food as similar white families, a new analysis found.

— Private equity-backed restaurant groups Five Guys, P.F. Chang's and TGI Friday's are among the companies that received large Paycheck Protection Program loans, according to recently released data from the Small Business Administration.

— House appropriators unveiled their fiscal 2021 ag spending bill and cleared it for a full committee markup later this week. The $24 billion measure hits back at several Trump administration food policies, including its crackdown on eligibility for Supplemental Nutrition Assistance Program benefits.

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Driving the Day

FOOD INSECURITY RATES HIGH; RACIAL GAPS 'APPALLING': The percentage of households considered food insecure has surged during the pandemic — already to levels much higher than during the depths of the Great Recession — but Black and Hispanic households are faring far worse than white households, reports yours truly.

Tracking racial disparities in real time: The latest picture on food security comes from economists at Northwestern University who analyzed weekly surveys conducted by the Census Bureau — a little-noticed data tool that's giving a near real-time look at the economic fallout of the pandemic as well as the stark racial disparities emerging.

Huge gaps: Black and Hispanic households with children are nearly twice as likely to be struggling with food as similar white families, with nearly 4 in 10 now considered food insecure. The wide racial gaps have persisted week to week throughout the pandemic, according to the analysis. The gap between Hispanic and white households also appears to be worsening.

The government defines food insecurity as a household that's either uncertain about or unable to get enough food to feed everyone under their roof at some point during the year because of a lack of money. During the pandemic, the Census Bureau has been asking households about their ability to access food and feed their households during the past seven days.

"This is uncharted territory," said Diane Whitmore Schanzenbach, an economist and director of the Institute for Policy Research at Northwestern University. "We've never seen food insecurity rates double, or nearly triple — and the persistent race gaps are just appalling."

Alarming stats on children not getting enough to eat: About 16 percent of households with kids are reporting that children did not eat enough in the previous week, according to a separate analysis by the Brookings Institution's Hamilton Project slated to be released this week.

Disparities at every level: That report, also based on the weekly Census Bureau survey data, found extreme racial disparities as well, with 29 percent of Black households and 24 percent of Hispanic households reporting that children were not eating enough, compared with 9 percent of white households.

The political context: The high levels of food insecurity do not appear to be improving, even as some states reopen. The studies come as Democrats on Capitol Hill are again trying to get a 15 percent increase in food stamp benefits into the next coronavirus aid package.

HAPPENING TOMORROW AT 12 PM EDT - HOW IS MAYOR FRANCIS SUAREZ APPROACHING THE COVID-19 SPIKE IN MIAMI? A rapid spike in coronavirus cases has forced Miami to scale back reopening plans. What will come next? Join POLITICO Nightly author Renuka Rayasam and Miami Mayor Francis Suarez for a conversation about the next steps, including plans to handle the virus' resurgence, measures that will take shape when schools reopen, and how a city reliant on tourism can recover from the devastation wrought by the pandemic. REGISTER HERE.

PPP MONEY FLOWED TO RESTAURANT CHAINS: Restaurant chains well known to consumers were among the list of more than 650,000 employers that secured billions of dollars as part of the SBA's $670 billion Paycheck Protection Program.

Major restaurants dive in: Burger chain Five Guys, which has locations across the U.S. and Canada, took a loan of between $5 million and $10 million, according to the SBA database. The new data showed that TGI Friday's and P.F. Chang's also took loans in the $5 million to $10 million range. All three corporations are backed by private equity firms, which face restrictions on how their portfolio companies can apply for the aid.

Backlash risk: The disclosure comes after other big restaurant operators such as Shake Shack and Ruth's Chris returned their PPP loan money amid a public backlash.

What is small government, anyway? The Americans for Tax Reform Foundation, whose sister group, Americans for Tax Reform, advocates for small government and is vocally critical of farm subsidies, also got aid.

Lobbying firms also dipped into the pie, as did businesses and organizations linked to lawmakers and congressional caucuses.

HOUSE ACTION ON AG SPENDING BILL BEGINS: The House Appropriations Committee will mark up its new Agriculture-FDA measure on Thursday after the bill was approved during a sleepy subcommittee hearing on Monday.

Hands off the farm stimulus: This year, the annual appropriations bill is overshadowed by the massive farm rescue programs that Congress and the Agriculture Department have already delivered (with likely more farm aid on the way in the next stimulus package). The fiscal 2021 measure largely steers clear of those emergency efforts, even though lawmakers have raised concerns with aspects of USDA's direct farm payments and food box deliveries.

But the bill includes some notable spending and policy provisions, like blocking USDA from granting meat processing line-speed waivers during the pandemic. It would also hike funding for rural development, including a big increase for broadband deployment efforts, and provide $5 million to resolve "heirs property" issues. Pro Ag's Ryan McCrimmon has the rundown here.

Trade Corner

BIZ GROUPS: HOW TO MAKE CHINA PHASE ONE DEAL WORK: Agriculture groups on Monday joined broader business interests in issuing detailed recommendations for making the phase one trade deal between the U.S. and China a success.

"We encourage both sides to redouble efforts to implement all aspects of the agreement, including purchases of U.S. manufactured goods, energy products, services and agricultural goods, where implementation appears to be lagging," the groups said in a letter to Chinese Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer.

On thin ice: There is concern that either President Donald Trump or Chinese President Xi Jinping could pull out of the agreement because of growing tensions over Hong Kong, the coronavirus, technology trade and other issues.

Phase one still important: The business groups said successful implementation of the phase one agreement was vital to any chance of negotiating a phase two agreement to tackle more difficult issues. They called on China to increase purchases of agricultural goods, among a long list of other American products, ranging from autos to medical devices, as part of its phase one implementation.

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Row Crops

— There's a beefy lineup of candidates running for Kansas' "Big 1st" district with Rep. Roger Marshall eyeing a run for Senate to fill the shoes of Pat Roberts, who is retiring. Four Republicans and two Democrats have filed. High Plains Public Radio has a look at who's who.

— Smithfield Foods has asked a court to intervene after OSHA subpoenaed South Dakota state health officials last month regarding the Covid-19 outbreak at its Sioux Falls plant, the Argus Leader reports.

— Activists are calling on Tyson Foods to do more to protect its workforce from Covid-19 and they're going to investment managers , including The Vanguard Group Inc. and BlackRock Inc., to apply pressure to the meat giant, Bloomberg reports.

— Rural logging communities in Oregon have suffered as profits and tax revenue have been siphoned by Wall Street investment funds' growing control of private forestlands, reports ProPublica, in partnership with OPB and The Oregonian/OregonLive.

— The Maine lobster industry is on precarious ground as Covid-19 continues to dampen tourism and eating out, the New York Times reports.