Politics & Policy

Corporate Welfare for Mickey Mouse

Congress wants to use a critical counterterrorism tool to subsidize the travel industry.

Earlier this month, the Senate passed the Travel Promotion Act by a lopsided margin of 79–19. The name is innocuous enough. Read the fine print, however, and the bill becomes rather less appealing. It’s corporate welfare for Mickey Mouse.

Here’s a little background on the bill. The TPA directs the Department of Homeland Security to impose a $10 fee on foreign citizens who visit America under the visa-waiver program. That program lets people from 35 countries, mostly in Europe, travel to the U.S. without first obtaining a visa. Instead, travelers register with DHS’s online security system before coming to this country.

The DHS fee could bring in hundreds of millions of dollars over the next decade. (In 2006 alone, the United States welcomed some 18 million visitors from visa-waiver countries.) The fees will be used to fund a new nonprofit known as the Corporation for Travel Promotion. Its mission is to “promot[e] the United States of America to world travelers,” and it will do so via multimillion-dollar ad campaigns.

What could be wrong with that?

Well, for starters, the TPA is a stark example of mission creep. DHS’s online registry — the “Electronic System for Travel Authorization,” or “ESTA” — is a counterterrorism program. Its purpose is to help authorities identify the next shoe bomber before he sets foot on a flight bound for the U.S. The system was never intended to raise revenue, let alone to raise revenue for the benefit of big business.

Which brings us to another problem: The TPA is redistribution at its most rank; it is a regressive tax. Wealthy and powerful corporations will have their pockets lined with money fleeced from travelers — many of whom are of modest means, and all of whom, as non-citizens, have no voice in the American political process. The feds are robbing Pierre to pay Paul.

The TPA surcharge could discourage people from visiting this country. A German family of four planning a winter vacation in Florida is already on the hook for hundreds of dollars in checked-bag fees, extra-legroom fees, security fees, passport fees, and so on. Will they be eager to shell out another $40? It may not seem like much, but they could spend that money on sunscreen and sunglasses, a picnic on the beach, or a rental car for a day. The family might decide to scrap Florida and head for the Spanish coast instead.

American travelers stand to lose, too. Some countries in Europe are already threatening to retaliate with fees of their own. Europe is even thinking about restricting visa-free travel for some Americans. That means American tourists and businessmen could have to dig a little deeper into their wallets for their next trip to Paris, or even stand in line at the French consulate to get a visa first.

Disney World, Delta Airlines, and other players in the travel industry are rational actors. If they think ads will bring in more business, they’ll run them on their own. They don’t need a government handout to persuade them to pursue their self-interest.

Indeed, travel companies could always tack $10 surcharges onto their own price tags. But after watching the airlines take heat when they started charging for checked bags and in-flight meals, the industry apparently decided it’s better to let the government do the dirty work. Angry travelers will blame DHS for the fee, or maybe the United States as a whole, instead of the businesses that profit from the TPA. The costs are socialized, the benefits are privatized.

International travel is essential, both for its cultural rewards and its economic ones. As the U.S. recovers from a crippling recession, it’s important to draw tourists to our shores. But we shouldn’t be using a national-security program to enrich the travel industry at the expense of its guests.

– Nathan A. Sales is a law professor at George Mason University. He served in the George W. Bush administration at the Justice Department and as deputy assistant secretary of homeland security for policy.


The Latest