When the U.S. Senate passed the wide-ranging tax bill early on the morning of Dec. 2, it opened the door to the automatic implementation of previous legislation that, in effect, would require the de-funding of Brand USA (officially, the Corporation for Travel Promotion) and deep cuts in the programs of U.S. Customs and Border Protection (CBP).
While awaiting word from the U.S. Travel Association as to what it thinks about the possibility of the elimination of Brand USA’s funding, here’s what we found out from various sources.
In February 2010, Congress passed and President Barack Obama signed into law The Pay-As-You-Go Act of 2010 (Title I of Public Law 111-139)—also called Paygo—which reinstated a law enacted in 1990 under President George H.W. Bush and was effective until 2002. The act is designed to ensure that most new spending is offset by spending cuts or added revenue elsewhere (with several major policy exemptions). The tax cut bill will cost the U.S., by most estimates, some $1.5 trillion. Hence, the Paygo cuts.
As explained by the New York Times, with the exception of Social Security, the U.S. Postal Service and some income-based programs such as unemployment benefits and food stamps, most mandatory spending programs are subject to Paygo. For 2018, the law would take away $14 billion in some farm aid programs, $1.7 billion for Social Security block grants, Meals on Wheels and millions here and there for scores of federal programs.
The Times lists 228 programs whose funding would be claimed as a result of Paygo (see the list here: https://www.nytimes.com/interactive/2017/11/29/upshot/paygo-medicare-cuts-tax-bill.html). Number 223 on the list is a $100 million for the Corporation for Travel Promotion (DBA Brand USA). The $100 million is the amount of funds that is collected of visitors to the U.S. from Visa Waiver Program counties via a fee when they register for their travel through the Electronic System for Travel Authorization (ESTA). Through a one-to-one match of contributions from the private sector, Brand USA can received up to $100 million in funds.
Equally startling is Number 94 on the list, which identifies $1.344 billion in funds for operations and support for U.S. Customs and Border Protection. There is no specific indication as to what operations and support will be cut.
Can It Be Reversed? “Congress has found a way to slip around the rule in the past by including an exception in legislation from the Paygo cuts,” noted the Times. “But because of the special budget process Republicans are using for tax overhaul this year, the tax bill itself can’t include such an exception.”
Jonathan Grella, executive vice president of public affairs for the U.S. Travel Association, told us: “Brand USA is one of hundreds of programs in the bucket of mandatory spending items which could be affected by the rules required for spending offsets. We don’t believe that Brand USA is being singled out in anyway.
Added Grella, “In the hunt for revenue, cutting Brand USA would be a big step in the wrong direction. Brand USA is critical to helping maximize the economic benefits of travel. Last year, Brand USA’s activities generated $615 million in incremental federal taxes—more than four times its budget—and another $552 million in state and local taxes.”