Congress’s gift shops losing money

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.

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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.

Only a handful of the hundreds of tourists passing through the CVC on Tuesday could be spotted going into the shops.

Sitting forlornly on the shelves were the $18 U.S. Capitol stoneware mugs, $16 T-shirts and 5-inch replica of the Senate’s Ohio Clock, which retails for $120.

No one was buying the $55 George Washington platter, either.

“If the gift shop isn’t making money, they should get rid of it,” said Steve Ellis of Taxpayers for Common Sense, who decried the Architect’s office for refusing to reveal the exact size of the losses.

“There doesn’t need to be a gift shop,” said Ellis, who called for the March 31 report to be made public. “These reports are for Congress, but the public deserves to know as well.”

It is expensive to run the gift shops. According to the original House version of the appropriations bill, it costs $1 million annually to pay compensation to the store’s 20 employees, a figure that includes the cost of health benefits.

The Architect’s office said sales at the gift shop “fully pay for the restocking of inventory, supplies and store fixtures” — an indication that sales do not cover the costs of the employees.

Part of the problem might be the shops’ location.

They sit far from the entrance, ticket booths and passageway to the Capitol itself, and are concealed by large stone walls.

The layout for the CVC was revised repeatedly by Congress, part of the reason its construction costs ballooned to $621 million from $295 million.

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.

Appropriators acknowledge the Buy American restrictions put a crimp on the shops.

“The conferees understand that there are mitigating circumstances such as ‘Buy American’ requirements,” notes the omnibus report approved by Congress in December.

But the lawmakers ask the Architect’s office to come up with solutions within the existing “parameters,” suggesting Congress does not intend to allow goods made in China to be sold at the CVC.

Rep. Ander Crenshaw (R-Fla.), the chairman of the House Appropriations Legislative Branch subcommittee, worked on the language calling on the Architect’s office to report on how to make the shops profitable.

“The report language reflects that philosophy and commitment to be a good steward of the taxpayers’ money,” Crenshaw spokeswoman Barbara Riley said.

She referred more detailed questions on the gift shop finances to the Architect’s office. 

Ellis, noting a Washington Post/ABC News poll that found 84 percent of the public disapproving of Congress, had his own theory about why the shop is having problems.

“It is hard to sell memorabilia of unpopular people,” he said. “I am sure Nixon T-shirts weren’t selling well in 1973.”