June 9, 2008 | Commentary on Economy
Recently, an attendant on my United Airlines flight drew groans when she announced that the price of our in-flight meal had gone up. Her captive audience would have to pay $7 instead of $5 for a box lunch with soft drinks and coffee.
Still, those of us in the air were better off than those who have their meals catered by the U.S. Senate restaurant. There, a simple sandwich and chips commands a hefty $11.50. Of course, that includes coffee or tea. Good thing, too, since a gallon of brewed coffee costs $26. And you thought $4 gasoline was expensive!
Apparently even those prices aren't high enough. "In fiscal year 2007, the restaurants lost $1.3 million, and we could easily see losses topping $2 million this year," the chief clerk of the Senate Rules and Administration Committee warned in a recent e-mail. "The prices for food and other items may need to be increased at least 25 percent."
This isn't a new development. "Since 1993, losses have averaged over $900,000 annually, and taxpayers have been required to provide $18.1 million in operational subsidies," the clerk wrote. That means taxpayers have bought a lot of sandwiches over the years -- ones they couldn't even enjoy.
Of course, the Senate isn't alone. Other government-supported businesses also lose money selling food. The General Accounting Office reports that in 2003 Amtrak lost $80 million on food. Yet the actual cost to taxpayers may be much higher. As Heritage Foundation transportation specialist Ronald Utt wrote last year, "Amtrak spends another $50 million annually to operate and maintain its dining, snack and lounge cars." That's over-and-above what it loses on food.
Our government could save us a lot of money by simply getting out of the restaurant business. And, as this column was going to press, the Senate finally voted to privatize its restaurants. "There are parts of government that can be run like a business and should be run like businesses," Sen. Dianne Feinstein, D-Calif., explained. That's certainly true but, unfortunately, Amtrak remains a financial black hole.
But never fear: The same people who have been losing our money in government-restauranteuring are confident they'll do a much better job handling the even more demanding energy business.
During recent hearings on Capitol Hill, Rep. Maxine Waters, D-Calif., gave oil company executives a piece of her mind: "This liberal will be all about socializing, uh, uh ... would be about ... basically taking over and the government running all of your companies." This isn't merely a pipe dream.
Senators recently debated a bill (Lieberman-Warner) that would have effectively given Washington control of our nation's energy supply. In order to reduce carbon-dioxide emissions, the federal government would have decided which companies could produce energy. In short, it would have adopted Waters' solution and given the government virtual control of energy production.
Would bureaucrats do a better job developing energy sources?
Yes, oil companies are indeed making big money. They're also paying out plenty in taxes. Exxon Mobil paid $9.3 billion in worldwide taxes in the first quarter of this year. That's an astounding 49 percent of its first-quarter gross income. (Full disclosure: Some oil companies have contributed to The Heritage Foundation. Their combined donations last year accounted for a paltry one-quarter of 1 percent of our revenues.)
Oil companies make big money by doing the increasingly hard work of getting petroleum out of the ground and turning it into gasoline, something everybody wants. The government, meanwhile, manages to lose money selling something else everybody wants -- food.
Federal policies already make food and energy far more expensive than need be. That's one reason United Airlines had to hike the price of its lunches. Any new federal scheme to further regulate our energy production would simply make matters worse.
Ed Feulner is president of The Heritage Foundation.