Money-losing Senate restaurants to go private

Do you need more proof that the government should stay out of private enterprise? The Senate’s own restaraunt, after losing money 33 out of the past 44 years, is going private.The Senate last week passed a bill authorizing Senate restaurants, now run by the Architect of the Capitol, to go private, ending months of back-and-forth between Democrats appalled by the operation’s money-losing ways and other Democrats worried that restaurant workers would get thrown out like the ham bones.

Sen. Dianne Feinstein, D-Calif., who as chairman of the Senate Rules Committee has spearheaded the privatization drive. She wrote that the Senate restaurants last year cost taxpayers $1.3 million with food quality and service that is “noticeably sub par.”

In a masterful bit of understatement, Feinstein blamed “noticeably subpar” food and service. Foot traffic bears that out. Come lunchtime, many Senate staffers trudge across the Capitol and down into the basement cafeteria on the House side. On Wednesdays, the lines can be 30 or 40 people long. House staffers almost never cross the Capitol to eat in the Senate cafeterias.

Senator Dianne Feinstein wrote:

“Candidly, I don’t think the taxpayers should be subsidizing something that doesn’t need to be. There are parts of government that can be run like a business and should be run like businesses.”

In a letter to colleagues, Feinstein said that the Government Accountability Office found that “financially breaking even has not been the objective of the current management due to an expectation that the restaurants will operate at a deficit annually.”

She noted that in budget years 2003 through 2007, Senate restaurants racked up deficits of $4.7 million while the House received commissions from the operator estimated at about $1.2 million.

Losses could top $2 million this year, and the restaurants will need a transfer of $250,000 from the Senate’s emergency funds in July to make payroll, she wrote in a letter to other senators. Since 1993, losses have averaged over $900,000 annually, and taxpayers have been required to provide $18.1 million in operational subsidies.

What was the Senate Restaraunts only suggestion for turning things around? Raise prices. Just how much does food cost if you chose to eat there?A simple sandwich and chips commands a hefty $11.50. Of course, that includes coffee or tea. Good thing, too, since a gallon of brewed coffee costs $26.

Of course, the Senate isn’t alone. Other government-supported businesses also lose money selling food. The General Accounting Office reports that in 2003 Amtrak lost $80 million on food. Yet the actual cost to taxpayers may be much higher. As Heritage Foundation transportation specialist Ronald Utt wrote last year, “Amtrak spends another $50 million annually to operate and maintain its dining, snack and lounge cars.” That’s over-and-above what it loses on food.

So, in the end, a government run monopoly not only didn’t turn a profit, but didn’t expect to either. It routinely paid it’s employers more then the local industry average, provided sub par service with no fear of competition. It should serve as a reminder to the government what happens when private enterprise is replaced by government managed services.