Great news: Congressional gift shops also run deficits

posted at 3:05 pm on January 18, 2012 by Ed Morrissey

Well, why not?  After all, what tourist visit to Capitol Hill would be complete without some souvenir red ink?

Both of the gift shops at the Capitol Visitor Center (CVC) are losing money, despite the 2 million people who visit the U.S. Capitol every year.

The Architect of the Capitol’s office (AoC), which oversees the shops, won’t say how much they lose. An annual report from the office showed the shops had $3 million in revenue in fiscal 2010, but the report offers little information on its costs, making it impossible to figure out how much the shops are losing.

Lawmakers were worried enough about the mounting losses to include language in last month’s 2012 omnibus spending measure to figure out how to make the shops profitable. The provision asks the AoC to report back by March 31 with a plan to get the shops out of the red.

The gift shops employ 20 people, which costs more than a million dollars in personnel costs, including benefits.  That’s not a surprisingly large number, even for a retail environment.  If the overhead can be reasonably calculated at 25%, that would make the average annual salary for employees about $40K per year with another $10K in benefits.  That’s pretty good pay for retail — something just shy of $20 per hour — but it includes the pay for managers, and the shops are located in Washington DC, where personnel costs will be higher anyway.

I’ve been in the gift shops a few times.  They have two in the basement of the Capitol, but it’s not terribly clear why they need two shops.  For the traffic they generate, one should suffice.  The location of the shops are also puzzling; even in the commons area of the visitor center, they’re not easily seen, concealed as The Hill notes by large standing concrete walls, presumably to buffer the noise going both directions.

I’ve also seen the prices on the souvenirs, which make it hard to believe they’re selling the merchandise at break-even pricing.  The shop blames a 2009 “Buy American” directive for their fiscal woes:

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

“The gift shops operate under policies and procedures that differ significantly from typical retail establishments, including meeting ‘Buy America’ requirements,” said Eva Malecki, a spokeswoman for the office.

The Buy American restrictions were first imposed at the behest of Rep. Robert Brady (D-Pa.) in 2009, according to his office.

A gift shop employee, who asked to speak anonymously, suggested visitors find the shops’ gifts too expensive even if they support the idea that the shops should only sell items made in the USA.

“They don’t like ‘Made in China,’ but they go shop at Wal-Mart,” the worker said of those who visit the gift shops.

At least they’re not selling French fries and French toast!  Seriously, though, why does Congress feel the need to operate gift shops at a loss in a city where souvenir shops abound — and presumably don’t run in deficits for their private-sector owners?  People sell DC souvenirs and memorabilia everywhere in the district, including on the streets.  The material sold in the shops is objectively of higher quality than some, it’s true, but the Smithsonian gift shops sell high-quality merchandise without losing money, and their items can also be purchased on line.  Perhaps it’s time that Congress got out of the souvenir business and found a better use for its resources.

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That’s not a surprisingly large number, even for a retail environment.

It’s a lot of people for the revenue. About 12 too many.

lorien1973 on January 18, 2012 at 3:08 PM

Dang, man, now I can’t keep floating checks there anymore.

jake49 on January 18, 2012 at 3:13 PM

Who wants to buy Congressmen gifts? Don’t they have enough?

NoDonkey on January 18, 2012 at 3:13 PM

Close ‘em down.

D-fusit on January 18, 2012 at 3:14 PM

Wow, another government agency that is great at spending other people’s money. What a shock. Is there ANY agency/department that pays for itself?

search4truth on January 18, 2012 at 3:15 PM

Another shining example of the U.S. governments’ understanding of, and capability for running a for profit business.

Fail.

parke on January 18, 2012 at 3:15 PM

If they opened a shop that had tasers wired to our representative’s chairs we might be able to get this deficit problem tamed in a hurry. At a dollar a shot my guy would be dancing all day.

DanMan on January 18, 2012 at 3:16 PM

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

Look for the union label, baby!

BacaDog on January 18, 2012 at 3:16 PM

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

My parents went to Washington and all I got was this lousy tee shirt that could have been made more cheaply in Honduras.

radjah shelduck on January 18, 2012 at 3:16 PM

If I were the owner of those shops from a strictly private business perspective: I would close the shops. A business would file for bankrupcy or close the doors rather than lose capital (in this case, Capitol?) in such an environment.

Further proof the government doesn’t know a da**ed thing about making jobs or making a profit.

Turtle317 on January 18, 2012 at 3:16 PM

They need to issue a series of dartboards “Faces of the Congress” in the shop. The profits will skyrocket immediately.

Archivarix on January 18, 2012 at 3:16 PM

Let me guess, they were selling U.S. made solar panels!

parke on January 18, 2012 at 3:17 PM

Well, it would be hard to make a profit when they have to comp so many tacky tchotchkes so Barry and Michelle can gift them to foreign leaders.

mrsmwp on January 18, 2012 at 3:17 PM

I’m curious if the congresscritters sell themselves for a loss?

What am I saying? There’s no overhead at all for those empty souls.

Kraken on January 18, 2012 at 3:19 PM

Hey, why should the gift shop be run any differently than the country.

hepcat on January 18, 2012 at 3:20 PM

Perhaps it’s time that Congress got out of the souvenir business and found a better use for its resources.

But that would involve a reduction in government employment… YOU’RE AGAINST JOBS!!! /s

Marcola on January 18, 2012 at 3:20 PM

Hey, why should the gift shop be run any differently than the country.

hepcat on January 18, 2012 at 3:20 PM

No need to go any further on this thread.

jimfreedom on January 18, 2012 at 3:23 PM

If you say they should close them, lay anyone off, or make any cuts in any way – then you are heartless and cold just like Mitt “Bain” Romney!

CycloneCDB on January 18, 2012 at 3:23 PM

How much is a congressman going for these days? I here they’re for sale.

hepcat on January 18, 2012 at 3:23 PM

Is there any way we can outsource this to China or India?

hepcat on January 18, 2012 at 3:24 PM

There’s a little sign, in the window, as you enter the shops:

“WE ACCEPT MONOPOLY MONEY’

OhEssYouCowboys on January 18, 2012 at 3:25 PM

Perhaps it’s time that Congress got out of the souvenir business and found a better use for its resources.

But that would involve a reduction in government employment… YOU’RE AGAINST JOBS!!!

Marcola on January 18, 2012 at 3:20 PM/s

Congress, meet Bain…

parke on January 18, 2012 at 3:25 PM

iPods loaded with Barry’s speechifications didn’t sell out, as expected.

Christien on January 18, 2012 at 3:26 PM

I call BS on this.

How can a shop selling thong bikini posters of Nancy Pelosi and Helen Thomas be losing money?

I mean, c’mon.

Horace on January 18, 2012 at 3:28 PM

Perhaps it’s time that Congress got out of the souvenir business and found a better use for its resources.

But if they quit the tourist business, where would Obama find gifts for visiting dignitaries??

Book on January 18, 2012 at 3:28 PM

Didn’t Queen Michelle buy her plastic Presidential helicopter from one of these shops?

You can’t shut the shops down – what would Queen Michelle do, the next time she visits London?

OhEssYouCowboys on January 18, 2012 at 3:29 PM

s/b Republican-controlled Congressional gift shops.

Christien on January 18, 2012 at 3:29 PM

I call BS on this.

How can a shop selling thong bikini posters of Nancy Pelosi and Helen Thomas be losing money?

I mean, c’mon.

Horace on January 18, 2012 at 3:28 PM

What I can’t understand is why they aren’t making money on the Che Guevara tee shirts and the Cuban flags?

OhEssYouCowboys on January 18, 2012 at 3:31 PM

that would make the average annual salary for employees about $40K per year with another $10K in benefits. That’s pretty good pay for retail — something just shy of $20 per hour — but it includes the pay for managers, and the shops are located in Washington DC, where personnel costs will be higher anyway.

Aren’t these public jobs and, thus, the salary information is public?

There is a web site in NC where you can look up the salary of any state employee. Don’t the feds have such a site?

mankai on January 18, 2012 at 3:31 PM

we need a venture capitalist to come in and do a turnaround

gerrym51 on January 18, 2012 at 3:31 PM

What I can’t understand is why they aren’t making money on the Che Guevara tee shirts and the Cuban flags?

OhEssYouCowboys on January 18, 2012 at 3:31 PM

Are you serious? People are going to blow money on Che and Cuban flags when they can have posters showing Nancy’s and Helen’s “Yum-Yum” parts?

Give the people what they want – capitalism in action, baby!

Horace on January 18, 2012 at 3:34 PM

From the U.S. Capitol Visitor Center website:

The Gift Shops are on the upper level and are open 8:30 a.m. to 4:30 p.m. Monday through Saturday. The Gift Shops feature a unique selection of merchandise inspired by the Capitol’s art and architectural treasures, fun and educational gifts, books, jewelry and exciting custom-designed products unavailable anywhere else.

“Unavailable anywhere else”. Probably because privately-run companies knew they couldn’t make any money selling the crap.

hepcat on January 18, 2012 at 3:35 PM

OhEssYouCowboys

O/T A rabid Mizzou Tigers fan (my old school), but was glad your Cowboys made mockery of them snob boys from Stanford.

Horace on January 18, 2012 at 3:38 PM

Do they take foodstamps?

Buttercup on January 18, 2012 at 3:40 PM

Do they take foodstamps?

Buttercup on January 18, 2012 at 3:40 PM

Racist.

hepcat on January 18, 2012 at 3:44 PM

I call BS on this.

How can a shop selling thong bikini posters of Nancy Pelosi and Helen Thomas be losing money?

I mean, c’mon.

Horace on January 18, 2012 at 3:28 PM

Gonna be sick.

PXCharon on January 18, 2012 at 3:44 PM

20 employees-3 sales clerks, 4 managers, 3 assistant managers, 4 assistant supervisors, 3 supervisors and 2 general managers, Right!

rjoco1 on January 18, 2012 at 3:46 PM

I assume the shops pay zero rent, zero property tax, zero building upkeep and still can’t break even. Close them down.

oldman13 on January 18, 2012 at 3:49 PM

The congressional gift shop is the only one where you can get the Barney Frank Squeeze doll with extra sharp pencil. You can bend him, you can squeeze him and use the pencil to find his G Spot and when you do he squeals with delight. Only $29.95 at the shop or any man on man action website.

Smedley on January 18, 2012 at 3:51 PM

Do they take foodstamps?

Buttercup on January 18, 2012 at 3:40 PM

EBT Baby!

D-fusit on January 18, 2012 at 3:52 PM

Horace on January 18, 2012 at 3:28 PM

LOL! Love it.

Cindy Munford on January 18, 2012 at 3:57 PM

I love that they blame the made in the U.S. products and not the over staffing.

Cindy Munford on January 18, 2012 at 3:58 PM

But they are losing money “for the children.” Do you wingnuts hate children?

kunegetikos on January 18, 2012 at 4:02 PM

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

Just another example of government regulations making it difficult to operate a business profitably.

While I appreciate the “Buy American” sentiment – the Capitol Gift Shops are the only stores required to abide by that regulation – allowing the other D.C. gift shops to easily undersell them.

If only our president and members of congress could see how these far-reaching rules and regulations have an adverse affect on businesses both small and large.

Hill60 on January 18, 2012 at 4:02 PM

What happened to the profits from the Chia-Obama? I know that was a best seller.

I still have mine. I know…I’m racist

Ditkaca on January 18, 2012 at 4:04 PM

In my state you have to go to a state liquor store to buy liquor and wine. No other entity is allowed to sell anything other than beer. And being the only game in town, the state liquor stores have found a way to operate at a loss, necessitating subsidies to stay in business. If you’re the only game in town and you sell liquor and you can’t turn a profit, you must be drunk. Or a bureauocrat.

rogaineguy on January 18, 2012 at 4:09 PM

Do you suppose it might have to do with their product? I mean, who wants to walk around in a “U.S. Congress” tee-shirt, about the most despised group in the country right now. Sort of like trying to sell New York Giants shirts in Green Bay right now.

Trafalgar on January 18, 2012 at 4:13 PM

Cindy Munford

Your appreciation is most appreciated.

Horace on January 18, 2012 at 4:14 PM

O/T A rabid Mizzou Tigers fan (my old school), but was glad your Cowboys made mockery of them snob boys from Stanford.

Horace on January 18, 2012 at 3:38 PM

It was good to beat the stupid Tree, no doubt.

Sad to see your Tigers leave the Little 10. I think that the conference is in a death spiral – and I sure don’t blame you guys for going to the SEC. The competition is gonna be tough, but it’s the best football conference.

Best of luck to you guys.

I hope that my guys can end up in the Pac 12 – when the dust settles.

OhEssYouCowboys on January 18, 2012 at 4:22 PM

Wrong link in story

SirGawain on January 18, 2012 at 4:25 PM

Shouldn’t people be more concerned that Congressional grift shops are turning massive profits?

Christien on January 18, 2012 at 4:27 PM

posters showing Nancy’s and Helen’s “Yum-Yum” parts?

Horace on January 18, 2012 at 3:34 PM

BANHAMMER! My eyes! My poor eyes!

Laura in Maryland on January 18, 2012 at 4:38 PM

Do you suppose it might have to do with their product? I mean, who wants to walk around in a “U.S. Congress” tee-shirt, about the most despised group in the country right now. Sort of like trying to sell New York Giants shirts in Green Bay right now.

Trafalgar on January 18, 2012 at 4:13 PM

I saw a T-Shirt last week that made me smile for days, even though it was out of season:

“Jesus hates the Yankees”

Laura in Maryland on January 18, 2012 at 4:40 PM

OhEssYouCowboys

You folks probably will end up in the Pac-12, along with those nasty fellers down the road in Norman.

Big 12 has stability problems centering on Texas. Mizzou didn’t want to be standing out in the rain with Kansas, Kansas State, Texas Tech and Iowa State when the whole thing collapses.

Also think the Cowboys should have played LSU in the NC. Alabama had their chance and one loss, even if it was to Iowa State, shouldn’t have been decisive.

However, the BCS bastoids had their NC game set about half way through the season.

Maybe the Tigers will see you in a bowl. Your Cowboys took ‘em apart this past season.

Horace on January 18, 2012 at 4:44 PM

“Jesus hates the Yankees”

Laura in Maryland on January 18, 2012 at 4:40 PM

Would be a super-hot seller up in Boston.

Wish I had the franchise on that one.

Horace on January 18, 2012 at 4:46 PM

The media has reported that Harry Reid, the manager of one gift shop, verified that the manager of the other gift shop – Nancy Pelosi, had been agressively cutting prices and using non-union made merchandise, in an effort to run him out of business!

KOOLAID2 on January 18, 2012 at 5:02 PM

If the gift shop analogy doesn’t make you realize how the gov’t has screwed up this country, nothing will. Shops created by politicians and run by gov’t functionaries selling junk that is too expensive when made in the USA due in no small part to gov’t regs and reqs.

aniptofar on January 18, 2012 at 6:08 PM

The government couldn’t run a money-making operation if their lives depended on it!

GarandFan on January 18, 2012 at 6:14 PM

Let me guess, they were selling U.S. made solar panels!

parke on January 18, 2012 at 3:17 PM

Nope, MLK miniature monuments

bbordwell on January 18, 2012 at 7:10 PM

and i would have thought those queen nancy commemorative obamacare gavels set sales records…

mittens on January 18, 2012 at 7:43 PM

Turn it over to an independent contractor.

DaveO on January 18, 2012 at 9:31 PM

The government can’t run a simple gift shop. Surprised?

Dollayo on January 19, 2012 at 1:47 AM