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Commonwealth Business Travel Group

This article discusses the state of American politics, including the 2008 Presidential Election, the Obama agenda, and the 2010 Election outlook. It also explores domestic travel priorities, aviation security, and international travel facilitation.

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Commonwealth Business Travel Group

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  1. August 5, 2010 C. Stewart Verdery, Jr. Monument Policy Group Commonwealth Business Travel Group

  2. 2010 –The State of American Politics • Domestic Travel Priorities • Aviation Security • International Travel Facilitation Overview

  3. State of American politics • 2008 Presidential Election • Obama Agenda • 111th Congress • 2009 Special Elections • 2010 Election Outlook • Campaign Issues

  4. 2008 Presidential Election

  5. 5

  6. Obama Agenda • Administration Accomplishments • American Recovery and Reinvestment Act (Stimulus) • Financial Bailout of Auto Industry • Supreme Court Appointments of Sonia Sotomayor and Elena Kagan • Health Care Reform • Financial Reform • Unfinished Priorities • Closing Gitmo • Immigration Reform • Comprehensive Energy and Climate Change Legislation • Distractions • Oil spill • Racial incidents

  7. Congressional Leadership U.S. Senate 59 Democrats - 41 Republicans U.S. House of Representatives 258 Democrats – 176 Republicans

  8. Recent Elections: Sign of things to come? DSCC Chair Sen. Bob Menendez (D-N.J.) stated, “I have no interest in sugar coating what happened in Massachusetts.”

  9. 2010 Election Outlook • “Unlike in the House, where Republicans could win a majority with Category 4 hurricane winds at their back, their Senate colleagues would need a Category 5 to win 16 out of the 18 seats in play” • “The Cook Political Report last week upped its projection from a 30-40 seat net gain for Republicans to a 32-42 seat net gain . . . [M]y gut feeling -- which, in years like this one, factors in national mood, relative intensity and enthusiasm between the parties and how independents seem to be breaking -- is suggesting somewhat bigger numbers. The wave is still the wave, and it still looks pretty strong and unabated.” – Charlie Cook

  10. 2010 Senate Elections • Real Clear Politics Predictions • 48 Democrats, 42 Republicans, 10 Toss Ups Likely Dem: CT: Open (D), NY: Gillibrand (D), OR: Wyden (D), WV: Open (D) Toss Ups: CA: Boxer (D), CO: Bennet (D), FL: Open (R ), IL: Open (D), MO: Open (R), NV: Reid (D), OH: Open (R), PA: Open (D), WA: Murray (D), WI: Feingold (D) Leans GOP : KY: Open (R), NH: Open (R), NC: Burr (R) Likely GOP: AR: Lincoln (D), DE: Open (D), IN: Open (D), IA: Grassley (R), LA: Vitter (R)

  11. 2010 House Elections

  12. 2010 Campaign issues • Economy • June unemployment rate 9.5% • Fight brewing over renewal of Bush tax cuts • Government Spending • Stimulus success/failure • Growing deficit • Healthcare • Debate will continue over passage of legislation and implementation • Homeland Security • Terrorism Prevention and National Security

  13. Economic Recovery?

  14. Domestic Travel Priorities • FAA Reauthorization and NextGen • Passenger Rights • Airline Fees • Hotel Taxes • Travel Regulation • Travel Promotion • Oil Spill • Energy and Climate Change

  15. Over the last three years, the Federal Aviation Administration (FAA) has been operating under a series of short term funding extensions due to the inability of Congress to reach an agreement on long-term reauthorization • Controversial provisions include FedEx unionization language, Passenger Facility Charges and Reagan National landing slots • House passed the bill twice (2007 and 2009) and the Senate finally approved their version of the legislation in 2010 • Since then, the House and Senate have been in informal negotiations on the bill • Once passed, the bill will provide long-term funding to the FAA for the development and Implementation of the Next Generation Air Transportation System (NextGen) Federal Aviation Administration Reauthorization

  16. Benefits of NextGen • Customer Service - Reduced flight delays, greater system capacity, and increased aviation efficiency • Jobs - Stimulus to overall economy • Airlines - Improved financial • picture for airlines/employees via • greater reliability of operations, • fewer delays, improved travel/ • shipping times and less fuel burn • Environment – Improved performance through more efficient aircraft routing and spacing, reducing fuel burn and GHG emissions by up to 12 percent 16

  17. Inefficiencies of ATC can be addressed through NextGen Additional burn due to reroute1493 lbs Optimal Route Burn5883 lbs. Boston, MA Actual Route flown Optimal Route Actual Route Burn7376 lbs. Large Air Carrier: DCA to BOS, December 2008 Washington, D.C. 17

  18. Airline Passenger rights • DOT issued new passenger protection rules on December 21, which became effective April 2010 • Prohibits tarmac delays in excess of 3 hours (except for security concerns) • Must provide food and water within 2 hours • Prohibits airlines from scheduling chronically delayed flights • Requires airlines to adopt customer service plans • Requires airlines to designate an airline employee to monitor the effects of flight delays and cancellations • Additional Passenger rights provisions included in stalled FAA Reauthorization Bill

  19. Airlines increasingly relying on ancillary fees • During the first quarter of 2010, airlines collected $1.3 billion from fees for checked baggage and reservation changes • Debate in Congress over fee transparency Airline fees

  20. House Transportation Committee Chairman James Oberstar (D., Minn.) called fees a "backdoor price increase” • Congress examining fees following a report from the Government Accountability Office in mid July, and may subject them to taxation • Senator Menendez is leading Senate efforts to increase fee transparency for consumers • Major fight underway between airlines and GDS’s airline fees Cont.

  21. Highways and Trains • The American Recovery and Reinvestment Act of 2009 put $789 billion into the economy • $48 billion was invested in transportation, namely highway and bridge construction projects, as well as rail projects • The Obama administration has invested over $10 billion in the President’s high-speed intercity rail program

  22. Localities seeking to subject service fees charged by online travel agencies (OTA) to local hotel occupancy taxes • Over 40 lawsuits • NYC and NC changed hotel taxation statutes • OTA’s Fighting Back • Potential federal legislation to preempt local taxation • Grassroots efforts underway Hotel Occupancy Tax

  23. Travel Regulation and perceptions • TARP • Backlash against Executive Compensation and spending by companies receiving assistance from the Troubled Assets Relief Program • Stimulus provision • Treasury Department required TARP companies to have policies on “excessive” and “luxury” expenditures via Interim Rule finalized in June

  24. Administration attacks/gaffes on travel have continued • Las Vegas and other leisure destinations singled out corporate and government meetings • Biden stated he would not fly during Swine Flu scare • Administration called for decrease in government travel for environmental reasons • Industry response • Economic research • Grassroots • Lobbying

  25. The Travel Promotion Act (TPA), signed into law in March 2010, creates a public-private partnership to promote travel to the United States and communicate United States entry policies to travelers • Board of Directors applications for the Corporation for Travel Promotion are currently under review • TPA Funding would come from: • Private sector contributions combined with a $10 ESTA fee once every two years on visitors from Visa Waiver Program countries • ESTA fee collection would provide $10 million to CTP in start-up funds, then up to $100 per year. Travel promotion act

  26. The largest offshore spill in world history Consequences have been far-reaching for the environment, health, fisheries and tourism The subsequent offshore drilling moratorium has exacerbated economic difficulties In Louisiana alone, the oil industry accounts for over 300,000 jobs Deepwater Horizon oil spill 2010

  27. Deepwater Horizon oil spill 2010: Tourism • Vacation cancellation rates reached 80% by the end of June along some parts of the Gulf Coast • University of Central Florida economist Abraham Pizam said the oil slick may become “the worst disaster in the history of Florida tourism.” Initial cost estimates were that the impact along Florida’s Paradise Coast could be $3 billion • A study by Oxford Economics found that the spill could cost the U.S. coastal economies $22.7 billion over a period of three years

  28. December 2009 Terror Plot • Terrorist Watchlist Responsibilities • Short and Long-Term Security Changes Following the Failed Terror Attempt • Transportation Security Administration • Advanced Imaging Technology • Registered Traveler • Secure Flight Aviation Security

  29. Northwest Airlines Terrorist Plot • On December 25, Umar Farouk Abdulmutallab boarded a flight from Amsterdam to Detroit with explosives sewn into his underwear • Had been screened via magnetometer for metal • Had not gone through explosives screening • U.S. government failed to connect data points pre-flight • Had been placed on a broad database of approximately 550,000 names of individuals with possible ties to terrorism after his father alerted the State Department – would have been questioned upon arrival by U.S. Customs and Border Protection • National Counterterrorism Center did not connect name to separate intercepts regarding plot involving Nigerian • Department of State misspelled Abdulmutallab’s name and had neither revoked his visa nor placed him on “no-fly” list of around 4,000 individuals

  30. Department of Justice/FBI • Terrorist Screening Center (Consolidated Terrorist Watchlist) • National Counterterrorism Center (NCTC) & Intelligence Community • Operates Terrorist Identities Datamart Environment (TIDE) list of people suspected of or known to be associated with terrorist activities • Transportation Security Administration • Certifies airline security • Certifies international and domestic airport security • Can deny landing rights for non-compliant carriers • U.S. Customs and Border Protection • Reviews airline manifests pre-boarding • Conducts immigration and customs processing in U.S. • Immigration Advisory Program operates at select foreign airports • State Department • Visa issuance and revocation U.S. Government Responsibilities

  31. TSA Response – Short Term • Following the attempted attack, TSA enacted several new safety measures on December 26 • Passengers flying into the U.S. faced enhanced baggage screening and a higher frequency of pat-downs • One hour prior to landing electronic devices were required to be turned off, all personal items stowed, and passengers required to remain seated • On January 4, TSA updated enhanced screening rules • Passengers traveling to U.S. from 14 countries and their carry-on baggage required to undergo physical screening • State Sponsors of Terrorism: Cuba, Iran, Sudan, and Syria • Countries of Interest: Afghanistan, Algeria, Iraq, Lebanon, Libya, Nigeria, Pakistan, Saudi Arabia, Somalia and Yemen

  32. TSA Response – Long term • On April 2, Secretary Napolitano announced TSA’s plan to implement new enhanced security measures for all air carriers with international flights into the US • These measures superseded the short term security solutions immediately following the December 25 attack and included: • Enhanced security and random screening measures throughout the passenger check-in and boarding process • Increased use of explosives trace detection • Implementation of advanced imaging technology • Additional canine teams • Increased frequency of pat-downs

  33. TSA Administrator • On June 25, John Pistole was confirmed as TSA Administrator, the first for the Obama Administration • Two previous nominees withdrew prior to Senate confirmation • Pistole circulated his agency priorities on July 16: • Improving TSA’s counterterrorism focus through intelligence and cutting edge technology • Supporting the TSA workforce • Strengthening the agency’s relationships with stakeholders and the traveling public • More emphasis on surface transportation security, i.e. trains and subways • Looming fight over unionization issue

  34. Advanced Inspection Technology • U.S. • 34 U.S. airports currently have AIT scanners in use • 14 more airports will receive the technology soon • Deploying 300 scanners by year’s end and another 500 next year • Foreign airports • U.S. urging foreign governments to adopt full-body imaging technology • Canada to buy 44 and Britain and the Netherlands to deploy nationwide • Finland, France, and Italy have begun testing the devices

  35. TSA privacy precautions • Images reviewed by separate TSA employees that do have not direct interaction with traveler • Images not saved or stored • Can request pat-down • Alternatives • Canines • Other machines – “puffers” • “Profiling” Advanced Inspection Technology

  36. Domestic Registered Traveler (RT) • Clear, the largest RT vendor, ceased operations at all airports in June 2009 • Assets purchased by Alclear • Plans to re-launch CLEAR in the Fall of 2010 at select locations – Denver first • Subscriptions for previous 160,000 members will be honored • Membership fee of $179 per year • IQueue about to reopen operations at Indianapolis

  37. Secure Flight transfers watch list matching responsibilities from airlines to TSA • The program seeks to improve accuracy and decrease false positives by increasing consistency in the process through TSA and requiring additional information from passengers Secure Flight

  38. Visa Waiver Program • Electronic System for Travel Authorization • Global Entry Program International Travel Facilitation

  39. The Visa Waiver Program (VWP) allows citizens from 36 participating countries to travel to the United States for up to 90 days without obtaining a visa • 8 countries added in 2008, Greece in 2010 • Further expansion requires biometric US-VISIT Exit • DHS Secretary Napolitano reviewing options since mid-2009 • Some in Congress urging de-coupling of Exit and VWP in order to continue expansion • Electronic System for Travel Authorization (ESTA) • Requires VWP travelers to apply online before traveling to US • ESTA is good for 2 years after approval • Mandatory enforcement began March 20, 2010 • May include airline fines and denied entry for not-compliant travelers • www.cbp.gov/esta Visa Waiver Program and ESTA

  40. Andorra Australia Austria Belgium Brunei Czech Republic Denmark Estonia Finland France Germany Visa Waiver program countries Greece Hungary Iceland Ireland Italy Japan Latvia Liechtenstein Lithuania Luxembourg Malta Monaco Netherlands New Zealand Norway Portugal San Marino Singapore Slovakia Slovenia South Korea Spain Sweden Switzerland United Kingdom

  41. International Registered Traveler • Global Entry currently at 20 airports; Over 58,000 members • Requires thorough background check, in person interview, and $100 fee for 5 years of enrollment • Bypass customs office and proceed to automated kiosk • Median time spent at kiosk is 33 seconds • Bilateral agreements with the Netherlands (active), Canada (active), Mexico, and Germany • www.globalentry.gov

  42. Questions or Comments? C. Stewart Verdery, Jr. Partner and Founder, Monument Policy Group stewart@monumentpolicy.com

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