Restaurants Take Their Case to Congress: Swipe Fees, Immigration, and the USMCA Fight

500 Operators Walk Into the Capitol

In mid-March 2026, the National Restaurant Association dispatched nearly 500 restaurant operators and state association directors to Washington, D.C. for meetings with members of Congress. The mission was focused and specific: press three policy priorities that the association believes will determine whether the restaurant industry can sustain its recovery or slide back into financial distress.

The three priorities are credit card swipe fee reform, immigration reform, and protection of the United States-Mexico-Canada Agreement, the trade pact formerly known as NAFTA. Each issue touches a different pressure point for restaurant operators, and each faces significant political headwinds.

Michelle Korsmo, the NRA's CEO, and Sean Kennedy, the association's executive vice president of public affairs, coordinated the effort. Their primary instruction to operators was straightforward: lead with the fact that nine out of 10 Americans love restaurants. Every member of Congress understands how important restaurants are to communities. Start there.

But the real numbers behind the visit are less warm. The NRA reports that 42% of restaurants are currently losing money. The median pre-tax income at restaurants is just 3% of revenues. Food prices have increased 37% since 2020. Median profit margins for full-service restaurants declined to 2.8% in 2024 from 4% in 2019, while limited-service margins fell to 4% from 6%. These are the numbers operators carried to Congress.

The Swipe Fee Battle

Of the three priorities, swipe fee reform is the one where the NRA feels most confident. "I feel better about swipe fees every week than I did the week before," Sean Kennedy told reporters.

Credit card interchange fees have quietly become one of the largest expenses for restaurant operators, typically competing with rent to be the third-biggest cost after food and labor. As many as nine out of 10 transactions in restaurants are now conducted via card, meaning a fee is attached to virtually every sale.

The average interchange fee in the United States is approximately 2% of the transaction value. By comparison, the European Union caps interchange fees at 0.2% for debit cards and 0.3% for credit cards. The U.S. rate is widely considered the most expensive in the developed world.

For an industry generating median profits of 3%, a 2% processing fee on every transaction is enormous. Steven O'Neil, managing partner at The Manship Wood Fired Kitchen in Jackson, Mississippi, described the growth at the NRA conference: "In my 13 years, that swipe fee has gone from a nickel to 15 cents. That is a 300% increase in just over a decade that I have been a manager and an operator."

The financial services industry pushes back hard on this framing. The Electronic Payments Coalition argues that credit card fees fund the payment infrastructure and its security, that cards increase frequency and ticket size, and that credit card rewards programs would disappear if fees were capped. These are not trivial arguments. Consumer rewards programs are popular, and the banks that issue credit cards generate significant revenue from interchange fees.

But the restaurant industry believes 2026 is the year the political math finally shifts in its favor. Three factors have converged.

First, affordability has become the dominant political issue heading into the 2026 midterm elections. Anything that can be framed as reducing costs for consumers and small businesses has a natural constituency on both sides of the aisle.

Second, state legislatures are taking action. Legislators in Delaware recently advanced bills to curtail interchange fees at the state level, creating a precedent that increases pressure on federal lawmakers to act.

Third, and most significantly, President Trump endorsed the Credit Card Competition Act in January, a U.S. Senate bill that would introduce more competition into the credit card processing industry. Trump called the fees "out-of-control swipe fee rip-offs." Presidential backing of a specific bill, particularly from a president who commands significant influence over Republican lawmakers, changes the political calculus considerably.

"I am not buying champagne," Kennedy said. "I am certainly not shilling any. But we are definitely looking at a point where every elected official is going to say this is an untenable situation. We probably do need to figure out a solution. They cannot keep sweeping this under the carpet, which is what they have been doing for years."

Immigration: The Forty-Year Impasse

Immigration reform is the NRA's second priority and its most politically complex. The last time a major immigration bill passed Congress was 1986, forty years ago. The issue has been a political flashpoint ever since, undone repeatedly by disputes over border security, employment verification, and the status of undocumented residents.

For the restaurant industry, immigration is not an abstract policy debate. It is an operational reality. More than one in five restaurant workers was born outside the United States. That percentage is similar to industries like meat packing and agriculture, which also make up parts of the restaurant supply chain. Immigration policy affects both the labor supply and the cost of goods that restaurants purchase.

While the restaurant labor market has improved in recent years, more than one in five restaurants still report being understaffed, according to the NRA. The association wants Congress to protect the workforce that is currently here and provide a pathway to citizenship for people who came to the United States as children and have remained productive, law-abiding residents.

Sarah White, the owner of Westover Taco in Arlington, Virginia, illustrated the stakes at the NRA conference. Several of her workers are on temporary protected status. "We have three or four people on the same status," she said. "What would happen to our restaurant if we lose that every night?"

Kennedy offered what he called his "radical theory" on why immigration reform might actually happen this time. "My radical theory is that immigration has the highest chance of working under Donald Trump," he said. "If he is going to bring the MAGA base and the traditional Republican base together, only he can drive it. And he has got two years and nine months to achieve it. I think it can be done, but the stars have to be in alignment."

The argument has a certain logic: a Republican president with strong anti-immigration credentials may be the only political figure who can bring his base along on a comprehensive reform package without being accused of being soft on border security. Whether that logic translates into actual legislation in a divided Congress with midterm elections approaching remains to be seen.

USMCA: Protecting the Food Supply Chain

The third priority is the least visible to the public but potentially the most impactful for restaurant operators' bottom lines. The United States-Mexico-Canada Agreement, which replaced NAFTA in 2020, is scheduled for its six-year review in 2026. The NRA wants the agreement renewed without new tariffs on food products that cross North American borders.

The stakes are significant. Restaurants depend heavily on cross-border food trade. Mexico supplies a large share of the produce, avocados, tomatoes, peppers, and other fresh vegetables that restaurants use daily. Canada is a major supplier of beef, pork, and processed food products. Tariffs on these goods would directly increase food costs for operators who are already dealing with 37% food price inflation since 2020.

The NRA's position is clear: "Preserving the USMCA keeps the restaurant food supply stable and affordable. We encourage the Administration to maintain the agreement and avoid new tariffs to help keep menu prices and operator costs in check."

But the USMCA review intersects directly with President Trump's signature trade policy: tariffs. The administration has already imposed tariffs on various goods from Canada and Mexico, and the broader trade relationship between the three countries has been turbulent. The NRA is asking the administration to protect food imports from tariff escalation, which puts the association in the position of advocating for trade openness from an administration that has made trade restriction a central policy tool.

The complexity is further compounded by the Iran conflict and its impact on energy prices. Higher fuel costs make cross-border food transportation more expensive, amplifying the impact of any tariffs that are imposed. Restaurant operators face a potential double hit: tariff-driven food cost increases combined with fuel-driven distribution cost increases.

The Political Environment

The NRA's lobbying effort comes at a particularly challenging political moment. The U.S. has initiated military action in Iran. President Trump has threatened to veto all legislation until the SAVE America Act, a bill on voting identification, passes. Midterm elections are approaching, making members of Congress simultaneously more responsive to constituent concerns and more cautious about controversial votes.

Korsmo and Kennedy acknowledged these challenges but argued that the restaurant industry's unique political position gives it advantages that other industries lack. Restaurants employ 15.7 million people across every congressional district. Nine out of 10 Americans eat at restaurants. Members of Congress have personal relationships with local operators.

"Every member of Congress understands how important restaurants are to strong, healthy, happy communities," Korsmo said. "They understand the great scale of the restaurant industry in terms of a small entrepreneur that has created something that means a lot to their neighborhood."

Mike Axiotis, chairman of the NRA's board and CEO of the Red Robin and Wingstop franchisee Lehigh Valley Restaurant Brands, put the profitability challenge in personal terms: "We have credit card fees and third-party delivery fees and increasing prices from all our vendors. Rent has gone up. Taxes have gone up. To only make 2.8% profit margin doing the amount of work we do is very, very difficult."

The Outlook: Incremental Progress or Breakthrough

The most realistic assessment is that the NRA's three priorities face different odds of success.

Swipe fee reform has the best chance. Presidential backing, bipartisan interest driven by the affordability narrative, and state-level momentum create a plausible path to legislation. It may not happen in 2026, but the probability has increased meaningfully. If it does pass, the impact on restaurant profitability would be significant. Even a modest reduction in interchange rates, from 2% to something closer to 1%, would represent billions of dollars in savings across the industry.

Immigration reform remains the longest of long shots. The forty-year drought of comprehensive immigration legislation reflects fundamental political disagreements that are unlikely to be resolved in a single legislative session. Incremental protections for workers with temporary status are more achievable than comprehensive reform.

The USMCA review is the most uncertain. The outcome depends almost entirely on the administration's trade priorities and whether food imports receive favorable treatment. The NRA can advocate, but the decision ultimately rests with a president who has made tariffs a central pillar of his economic policy.

For restaurant operators, the message from Washington is mixed. The industry has allies in Congress, real momentum on swipe fees, and a compelling case on all three issues. But the political environment is volatile, the administration's priorities are unpredictable, and the midterm election cycle creates both opportunity and risk.

The 500 operators who walked into the Capitol last week carried the numbers with them: 42% not profitable, 3% median margins, 37% food cost inflation. Whether Congress hears those numbers clearly enough to act will determine much of the restaurant industry's trajectory for the remainder of 2026.