Is Travel Promotion Act a bailout for tourism industry?


Now that Disney has bought Marvel comics, it is reaching out for another partner: the federal government. Next week Congress may pass the Travel Promotion Act, derided by its critics as bailout for the tourism industry.

But the real lesson of this government expansion is about K Street’s growth into all sectors of the economy.

The Travel Promotion Act would create a new government agency and a new quasi-government agency charged with luring foreigners to see America, funded by a tax on every foreigner who visits America.

Skeptical Capitol Hill staffers call the bill a “bailout for Harry Reid.” Reid, in re-election trouble, may be hoping government advertising for the Las Vegas Strip might win him some votes and campaign cash from grateful casinos.

But the legislation championed by hotels, airlines, and other giants in the travel industry is modest in some ways: Its price tag is only $200 million per year. And rather than a tale of corporate America’s clout in Washington, it’s a tale of K Street and Capitol Hill luring corporate America into the Beltway swamp.

Consider the bill’s conception: In 2005 Rep. Bill Delahunt, a Democrat who represents Cape Cod, addressed the Washington Summit of the Travel Business Roundtable, and urged it to lobby more. Fed News reported, “The Congressman called on the industry to wage a more aggressive, bipartisan campaign.”

It’s not every day that a lawmaker issues a clarion call for more lobbying, so the industry obliged with enthusiasm. The Travel Business Roundtable registered as a lobbying organization in 2006, changed its name to the Discover America Partnership, and hired Steven Schwadron, Delahunt’s longtime chief of staff, as its K Street lobbyist. Nobody can say Delahunt doesn’t take care of his employees.

Delahunt this year sponsored HR 2935, the Travel Promotion Act, which creates a Corporation for Travel Promotion, funded through voluntary contributions from tourism businesses, plus a $10 tax on every foreigner entering the United States.

This tax has received some push-back from European diplomats. Ambassadors from the European Commission, Sweden, and the Czech Republic wrote U.S. officials, “Taxing foreign travelers to promote tourism seems peculiar.”

While this looks like a bailout for the tourism industry, it seems to be paid for by the tourism industry, and it could discourage as many visitors as it brings in. Maybe the real beneficiaries are not Disney and Vegas as much as their lobbyists.

The Washington Post’s Jeffrey Birnbaum covered the industry’s lobbying push in 2008. The Discover America Partnership hired former health maintenance organization lobbyist Geoffrey Freeman to assemble a lobbying army. Freeman got major hotels and theme parks to pony up good cash for his effort.

The partnership started shelling out $20,000 a month for the advice of former Homeland Security Secretary Tom Ridge. Freeman hired polling firms, research firms, and public relations firms. The industry brought on new K Street firms, including Schwadron’s.

The U.S. Travel Association multiplied its lobbying spending tenfold from $75,000 in 2005 to nearly a million dollars in the last 12 months. The problem, they said, was burdensome visa processes and unnecessary and intimidating security measures that gave the impression that foreigners were unwelcome in the United States.

The lobbying response was typical of government and K Street. When government creates a problem, lobbyists are reluctant to tell Washington to back off. Instead of trying to minimize government’s deleterious effect, politicians and lobbyists work together to create a new government program.

Considering the ego of politicians, a lobbyist has more success asking “can you help us out?” as opposed to “can you please just get out of the way?” Hence the vicious circle of Big Government: One government program causes a problem, and another comes in to solve it.

Also, getting government out of the way might obviate the need for more lobbyists. Once you’re on the government teat, though, you’d better keep up your K Street army.

Sen. Jim DeMint, who is concerned that the bill could backfire internationally, is waging a lonely war against the measure. His staff asks why the businesses can’t do its own travel promotion. But because the bill claims to impose no costs on the taxpayer, it’s sure to pass.

We always assume that corporations use K Street to influence Congress. But as this episode shows, congressmen also welcome the attention of lobbyists.