for the job you are doing. Our criticism is not of what you are doing but of the system and of the deficit it causes.

Mr. Chairman, may I go off the record?

Mr. ANDREWS. Yes.

(Discussion off the record.) Mr. LANGEN. Mr. Chairman. Mr. ANDREWS. Mr. Langen.

PROBLEMS INVOLVED IN RESTAURANT OPERATIONS

Mr. LANGEN. I think we have a problem here that we have to face up to in one way or another. In so doing let me say this first: With regard to the management-and I refer to Mr. Cowan and the Architect and everybody involved-to begin with you have an impossible job. You are doing an excellent job under the conditions under which you must operate. I fully appreciate how impossible your job is with the number of factors you have to operate under, over which you have no control. You have no control over the demands of members; you have no control over the wages you must pay; you have no control over the business that concentrates in certain hours of the day and certain days of the week. Those things make for conditions that are not conducive to a good business operation.

But the fact remains that even with the excellent job you have done under those conditions there does exist this deficit which, in the public eye, becomes a subsidy for meals. As a Member and as one who does patronize the various eating facilities here, I think we have to face up to that problem.

So where does that leave us? I think it leaves us in this position: There are only a couple avenues we have to pursue. One is that under the operation as it is presently conducted with all its unique requirements and unique demands, you have a deficit of $400,000. If we were to collect enough money to make up that deficit it takes an increase in prices of about 25 percent. That means for every dollar purchased it would cost $1.25 and every $2 would cost $2.50. So, unles we change the whole operation, the simple answer is to raise the prices by 25 percent or whatever it takes to meet that deficit.

You do not have control over that, either. That is a decision made by somebody else, as I understand, either the Speaker of the House or a committee or commission that looks after that. So, again, you are handicapped. But I think as far as this committee is concerned and the Architect is concerned, I would like you to recommend, "That if you want to erase this deficit, the way to do it is to raise prices y 25 percent." Then let the Members face up to that. I would not even object to that. I would pay the additional 25 or 30 percent, or whatever it takes. If it is essential that we continue operating under this syster.. because from my standpoint I would much rather make that contr bution than to have the criticism accrue to this committee and to the entire House as it has been pointed out has already been done. If ** don't want to do that, let us explore what can be done. Why not erplore whether it can be leased out? Maybe somebody would look this and say they want no part of it. But if somebody is interested it, I think we would be negligent if we did not explore that possibil Mr. YATES. Will the gentleman yield?

Mr. LANGEN. Yes.

Mr. YATES. It seems to me what we should do is consider the appointment of a special committee, not of the House of Representatives but a group of people who are in the restaurant business, and give them a member of the General Accounting Office to go over this with them to see what should be done. I think this would be a reasonable way to do it. Mr. Andrews of North Dakota has pointed out that he made a phone call to someone. Let that individual be on the committee and let them advise us if the restaurant is a permanent loser.

Mr. ANDREWS of North Dakota. Don't you think it would be better for the Architect to select those that might be interested? But we have to do something before we are asked to mark up the bill.

Mr. YATES. As I remember testimony in previous years, you said you had consulted with restaurant owners in the city of Washington about the possibility of saving money and none of them saw any alternative to what you were doing under the circumstances under which you were forced to operate. Is that correct?

Mr. CowAN. Mr. Roof may have said something like that. I myself have not talked to restaurant people.

Mr. ROOF. What I said was that the Senate had done this and, as you know, their facilities were operated by a concessionaire on the Senate side about 15 years and in 1961 they asked the Architect to take it over again.

Mr. YATES. What was the reason given?

Mr. ROOF. Well, they felt they were paying the deficit anyway. The deficit was there whether the Architect operated it or the concessionaire operated it, and they said they would at least save the management fee, which at that time was about $20,000 a year. So the chairman of the Senate Committee on Rules and Administration came and asked the Architect to take it back.

SENATE RESTAURANT DEFICIT

Mr. YATES. Do you know what the deficit in the Senate restaurants is?

Mr. Roof. We estimate it is about the same as for the House.

Mr. HENLOCK. During the years the concessionaire ran the Senate restaurant, the deficit for that restaurant did not cease. It continued, the same as the deficit in the House restaurant.

Mr. YATES. What happened?

Mr. HENLOCK. The deficit was appropriated, in addition to payment of a management fee.

Mr. ANDREWs. Is that the kind of contract the concessionaire had? Mr. HENLOCK. So I understand. We did not negotiate the contract. It was negotiated by the Senate Committee on Rules and Administration.

EFFORT TO GET GSI TO OPERATE SENATE RESTAURANTS

Mr. ROOF. Mr. Chairman, the nonprofit organization, GSI, that runs the restaurants downtown, before we took back the Senate restaurant in 1961, the Senate Committee on Rules and Administration explored with that organization whether they would be willing to take the Senate facility over and the GSI said they would not because it is

a money-losing proposition. They would take the cafeterias over under certain conditions if they were able to control the personnel, the prices, and the portions, but they would not take over the dining facilities.

QUESTION OF EXPLORATORY STUDY

Mr. LANGEN. Mr. Chairman, I want to emphasize I am not putting the onus on these people at all because I think they are doing a wonderful job under the conditions under which they have to operate. At the same time I do not think we, as a committee, can throw up our hands and say this is the only thing that can be done. Whether it takes a commission or whatever it takes, I think we should explore it. As has been pointed out, there are problems in dealing with a concessionaire, but I think we should know about those problems. This will give us something on which to base judgment and maybe when it is all said and done and explored thoroughly the answer will be we will have to raise the prices. If that is the case, I think this committee, in order to get away from this deficit problem, has to decide whether the course is one of raising prices or of pursuing some other type of operation. I say this in defense of this operation because I think Mr. Cowan has put up with any amount of requests and conditions that the ordinary person would not have stood up under all this time. I fully appreciate that.

So what I am actually saying is we should try to find a way to get out of this situation to the advantage of everyone to avoid the criticism and to relieve the grief those who have been working on this have had.

Mr ANDREWS. I want to concur in what Mr. Langen has said. We all appreciate the great handicaps under which you operate. I have observed the operations of Mr. Cowan for a long time and they are good. I do not know of a better manager we have ever had. We are not complaining about you people, we are complaining about the system under which you have to operate which, according to the record, is very, very expensive and is growing in leaps and bounds. If there is a better system we owe it to our constituents to pursue that system. It may be that after someone took a look at it he would say, "It is not for me.” We would have to cross that bridge when we get to it.

Mr. LANGEN. I think, Mr. Chairman, there is another point. It does not hurt for the Members to face up to the inflationary factors that affect the operation. Those factors are prevalent all over the country today. The costs have gone up on everything we have to buy. Maybe it would not hurt us to become aware of the fact it affects us as well as the rest of the public. There is no need to try to cover it up. Those are just the facts of life. As wages go up the costs go up also.

Mr. COWAN. Back in 1961 when the deficit was certainly more reasonable, the average annual wage of an employee in the House restaurant was $2,500. Now it is $4,400 per year, the average annual wage. That means a lot of money when you have 245 employees.

Mr. LANGEN. We have to realize the employees are faced with the same problem, and if they are going to live decently they have to have

more income. It is a matter of making enough money to survive. I think we ought to face up to that also.

Mr. ROOF. Mr. Chairman, there is just one other thing that we studied briefly. If you desire to reduce this deficit to something like $200,000 that is an arbitrary figure or about one-half of what it is now-it would mean about a 12-percent increase in our food sales. if the House were willing to do that.

Mr. ANDREWS. The committee will stand adjourned until 10 o'clock Friday morning.

FRIDAY, APRIL 5, 1968.

Mr. ANDREWS. The committee will come to order. We will resume our hearings this morning in connection with the Architect's Office and in particular the House restaurants.

Will you be asking for an increase in this item in connection with the forthcoming pay act supplementals and, if so, how much? Mr. STEWART. May I ask one of those more knowledgeable on the details to answer, please.

WAGE SCHEDULE OF RESTAURANT EMPLOYEES

Mr. Roof. Mr. Chairman, we do not expect at this time to ask for any deficiency based on the $400,000 that we have asked. We have requested the money that we feel is necessary except for the item I mentioned the other day that just appeared in the paper about the upping of the wage schedule for District food workers as announced by Mayor Washington.

Mr. ANDREWS. What is the total number of employees now in the eating places on the House side of the Capitol?

Mr. CoWAN. 245.

Mr. ANDREWS. Are they all under wage board regulations or civil service?

Mr. CowAN. Thirty-two of us are classified as administrative and management employees who are under the legislative pay system. The rest are wage board employees.

Mr. ANDREWS. Do they get automatic pay increases periodically? Mr. CowAN. The wage board people get step increases each year unless they are at the top of a certain grade.

Mr. ANDREWS. What do you mean by "at the top of a grade” in the wage board?

Mr. CowAN. The wage board has five steps to a grade. If a person is in the second or third step he would get an automatic raise each year to the next step.

Mr. ANDREWS. I wish you would put the schedule in the record. (The information follows:)

LOSS FROM OPERATION IN FISCAL YEAR 1968

Mr. ANDREWS. As to the fiscal year 1968 loss now estimated, which you cite as $354,000, that would be $64,000 more than you estimated when you were before us last year, is that correct?

Mr. Roof. Yes, sir.

Mr. ANDREWS. You enumerate an additional loss at the top of page 219. Take the 10 new positions that you list at $35,000, that would not be a full year's cost, would it?

Mr. CowAN. In the case of these positions it would be almost a full year's cost, Mr. Chairman. About seven of these positions are for porters in the Rayburn Building and it is just about a full year.

LEAVE SYSTEM-AND ABSENTEEISM

Mr. ANDREWS. What is the leave time alluded to? Explain that. Mr. COWAN. We have a leave time system that was put in with the wage board system in March of 1966. It is a leave system just about comparable with the civil service leave system uptown. Since we have had that system we have had absenteeism that is unbelievable, especially on Monday morning. Last Monday morning we had 31 people absent.

Mr. ANDREWs. What do you attribute this to?

Mr. CowAN. The fact that we have the system and that it is there and it can be used.

Mr. ANDREWS. Who promulgated that system, under what law was action taken?

Mr. CowAN. The General Accounting Office made the recommendation that we adopt this leave system when we put in the wage board system.

Mr. ANDREWS. Who adopted it? The General Accounting Office recommended it but who adopted it?

Mr. Roor. We adopted it, Mr. Chairman.

Mr. ANDREWS. The Architect's Office?

Mr. Roof. Yes, sir.

Mr. ANDREWS. Without resolution by the House?