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, according to one report, and an estimated $2 million this year alone, according to another.
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, in a late-night voice vote, the Senate agreed to privatize the operation of its food service, a decision that would, for the first time, put it under the control of a contractor and all but guarantee lower wages and benefits for the outfit’s new hires.
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 end a seven-month Democratic feud and more than four decades of taxpayer bailouts.
Sen. Dianne Feinstein (D-Calif.), chairman of the Rules and Administrations Committee, which oversees the operation of the Senate, said she had no choice.
“It’s cratering,” she said of the restaurant system. “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.”
But Sen. Robert Menendez (D-N.J.), speaking for the group of senators who opposed privatizing the restaurants, said that “you cannot stand on the Senate floor and condemn the privatization of workers, and then turn around and privatize the workers here in the Senate and leave them out on their own.”
The Senate Restaurants, as the food service network is known, has a range of offerings, from the ornate Senate Dining Room on the first floor of the Capitol, where senators and their guests are served by staffers wearing jackets and ties, to the huge cafeteria in the Dirksen Building and various coffee shops throughout the Senate complex.
All told, they bring in more than $10 million a year in food sales but have turned a profit in just seven of their 44 years in business, according to the GAO.
…The rules committee began exploring its outsourcing options in 2005, when Republicans controlled the chamber. When Democrats took power last year, Feinstein ordered several studies, including hiring a consultant to examine management practices, before deciding privatization was the only possibility.
In a closed-door meeting with Democrats in November, she was practically heckled by her peers for suggesting it, senators and aides said.
“I know what happens with privatization. Workers lose jobs, and the next generation of workers make less in wages. These are some of the lowest-paid workers in our country, and I want to help them,” Sen. Sherrod Brown (D-Ohio), a staunch labor union ally, said recently. The wages of the approximately 100 Senate food service workers average $37,000 annually.
Feinstein made another presentation May 7, warning senators that if they did not agree to turn over the operation to a private contractor, prices would be increased 25 percent across the board.
Eventually, Democrats agreed to pass legislation that includes guarantees for those who go to work for Restaurant Associates. They would retain their current salaries and federal health and pension benefits. Employees who choose to leave instead would receive buyout packages of as much as $25,000 — paid by the Senate. Half the current employees are likely to take that deal.
I serve as Vice President of the Center for Freedom and Prosperity, a non-profit think tank dedicated to preserving tax competition and free markets. This site features my personal views, which are not reflective of CF&P.