Shocker: Congress Can’t Even Run A Gift Shop Profitably

Some 2 million people visit the US Capitol every year, yet despite all that foot traffic the two gift shops run by Congress to sell souvenirs and other items to those tourists are in the red.

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.

Ed Morrissey attributes some of the problem to the shops being poorly located in the Capitol’s complex. I can’t speak to that. I’ve visited the Capitol a few times, but that was before the construction of the new visitor’s center and even then I don’t remember seeing the gift shops.

But beyond location, a larger part of the problem is (not surprisingly) policy set by Congress itself (specifically the Democrat majority in 2009) which prevents the shops from being run like truly free market enterprises:

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.

Congress could learn a lesson from this. Protectionism doesn’t work. It drives up prices by blocking competition from foreign markets, and in the end the consumers suffer.