Monday, June 09, 2008

Senate Votes To Privatize Its Failing Restaurants

Washington Post -- Year after year, decade upon decade, the U.S. Senate's network of restaurants has lost staggering amounts of money -- more than $18 million since 1993, and an estimated $2 million this year alone.

The financial condition of the world's most exclusive dining hall and its affiliated Capitol Hill restaurants, cafeterias and coffee shops has become so dire that, without a $250,000 subsidy from taxpayers, the Senate won't make payroll next month.

The embarrassment of the Senate food service struggling like some neighborhood pizza joint has quietly sparked change previously unthinkable for Democrats. Last week, the Senate voted to privatize the operation of its food service, a decision that would, for the first time, put it under the control of a contractor.

The House is expected to agree -- its food service operation has been in private hands since the 1980s -- and President Bush's signature on the bill would officially more than four decades of taxpayer bailouts.

Operation of the House cafeterias was privatized in the 1980s by a Democratic-controlled Congress. Restaurant Associates of New York, the current House contractor, would take over the Senate facilities this fall. The company wins high praise from most staffers and lawmakers, who say they are pleased with the wide variety of new items offered every few months.

Restaurant Associates turns a substantial profit -- paying $1.2 million in commissions to the House since 2003. By one estimate, Restaurant Associates would turn a large profit in the Senate within three years and would begin paying about $800,000 annually in commissions.

Bottom Line: The difference between capitalism and socialism? Capitalism works.

(HT: Travis Walker)

5 Comments:

At 6/09/2008 9:54 PM, Anonymous Fred said...

This could lead to privatizing DC.

 
At 6/10/2008 3:30 AM, Anonymous Anonymous said...

You mean privatizing Congress?

If so, one could only hope. :P

 
At 6/10/2008 6:50 AM, Anonymous KJ said...

The Post is out to lunch on this one. Consider this a small perk to the many folks who work on Capitol Hill. All that's going to happen now is prices will increase and the interns and other low paid staff have lost a small perk of their work.

 
At 6/10/2008 8:29 AM, Blogger Gregory said...

Oddly enough, I suspect prices were already too high. Afterall, the current managers are embarrased by losing money every year.

And charging prices high enough to make a large segment of your customers, namely interns, to bag lunch it loses you revenue with no real benefit. As such, I would have an intern discount, say 15% off.

 
At 6/10/2008 10:11 AM, Anonymous alex said...

KJ, cafeterias in other government buildings (including the two main Executive Office buildings) have been privatized for years, and the prices are comparable to (if not slightly lower than) many of the other private lunchtime eateries in the surrounding area of downtown.

 

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