Congress moved forward this week on legislation creating a federal program to promote international tourism. Tourism industry leaders are pleased, but perhaps not as pleased as the lawmakers and lobbyists who pushed the industry to call for such a program.
With their rapid rush to pass “lobbying reform” and their regular complaints about “corporate influence,” you would think congressmen find lobbyists annoying—or at least you wouldn’t expect lawmakers to try and multiply the number of Capitol Hill lobbyists. The case of the Travel Promotion Act (TPA), however, shows how lawmakers often directly spur the lobbying industry with which they confer over how to distribute taxpayer dollars.
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This week, senators advanced TPA to create a quasi-governmental agency called the Corporation for Travel Promotion (CTP) – funded partly by tax dollars, partly by new fees on foreign visitors, and partly by a new tax on the tourism industry. The CTP would basically be an overseas advertising firm for tourism in America.
Adherents of the free market and skeptics of big business might ask, “why should the government be involved at all in advertising for the tourism industry?” A first glance at federal lobbying records suggests a case of corporate lobbyists shaking down Washington for cash. The story behind this legislation, however, shows a more interesting tale and reveals a more subtle dynamic between Capitol Hill and K St.
On April 20, 2005, Rep. Bill Delahunt, D-MA., spoke at the U.S. Chamber of Commerce before 500 executives in the tourism industry. Delahunt’s chief of staff, Steve Schwadron, issued a press release afterward reporting that the congressman had “called on the industry to wage a more aggressive, bipartisan campaign.”
In short, Delahunt was saying, “lobby me.” This is often how lawmakers push their agenda, they ask business groups to lobby their colleagues. When a congressman asks business executives to do something, it usually gets done.
A few months after Delahunt’s call on the tourism industry to intensify its lobbying, executives at Disney, Intercontinental Hotels, Loews Hotels, and other industry giants launched the “Discover America Partnership,” with offices just off of K St. in downtown Washington. The Partnership described itself as “an aggressive, Washington, D.C.-based advocacy campaign.” In short, it was a new lobbying powerhouse.
Schwadron, Delahunt’s longtime chief of staff, soon left Congress and joined as a lobbyist for Sher & Blackwell. This year, the Discover America Partnership hired Sher & Blackwell and deployed Schwadron to Capitol Hill to lobby for them.
Schwadron already knew the industry well, having been the guest of the Association of Travel-Related Industry Professionals (a predecessor to the Discover America Partnership), in Cancun, Mexico, as a Delahunt staffer in 2003.
This year, Delahunt sponsored TPA, which would involve the federal government in an enterprise Americans have typically left to industry, namely, encouraging foreigners to visit the U.S. and spend their money here.
The industry and its Capitol Hill allies argue that TPA imposes no costs on taxpayers, but that’s misleading. The CTP will initially be financed by an interest-free loan from taxpayers, but after that, it will be funded through assessments of firms in the travel industry and a new government fee on foreign travelers.
The “assessments” must be approved by a referendum of the industry, with bigger companies receiving more weighted votes, so they amount to a new tax on hotels, car rental agencies, and other companies who would benefit from a tourism surge. Because these assessments are industry-wide and not specific to foreign visitors, Americans who stay in hotels or rent cars domestically will foot most of the bill.
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The bill also creates new government offices and jobs in the Department of Commerce, whose salaries and benefits will come from taxpayer wallets. The ultimate cost to each taxpayer may be small, but this corporate welfare for the tourism industry piles one more industry subsidy onto the back of the American worker.
Examiner columnist Timothy P. Carney is a senior reporter for the Evans & Novak Political Report.
