[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



   TRAVEL AND TOURISM AND HOMELAND SECURITY: IMPROVING BOTH WITHOUT 
                           SACRIFICING EITHER

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                COMMERCE, TRADE, AND CONSUMER PROTECTION

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 23, 2004

                               __________

                           Serial No. 108-96

                               __________

      Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house


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                    ------------------------------  

                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
RALPH M. HALL, Texas                   Ranking Member
MICHAEL BILIRAKIS, Florida           HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
CHRISTOPHER COX, California          SHERROD BROWN, Ohio
NATHAN DEAL, Georgia                 BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
Mississippi, Vice Chairman           TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MICHAEL F. DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       CHRISTOPHER JOHN, Louisiana
JOSEPH R. PITTS, Pennsylvania        TOM ALLEN, Maine
MARY BONO, California                JIM DAVIS, Florida
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
LEE TERRY, Nebraska                  HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey            CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho
JOHN SULLIVAN, Oklahoma

                      Bud Albright, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

        Subcommittee on Commerce, Trade, and Consumer Protection

                    CLIFF STEARNS, Florida, Chairman

FRED UPTON, Michigan                 JANICE D. SCHAKOWSKY, Illinois
ED WHITFIELD, Kentucky                 Ranking Member
BARBARA CUBIN, Wyoming               CHARLES A. GONZALEZ, Texas
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
JOHN B. SHADEGG, Arizona             SHERROD BROWN, Ohio
  Vice Chairman                      PETER DEUTSCH, Florida
GEORGE RADANOVICH, California        BOBBY L. RUSH, Illinois
CHARLES F. BASS, New Hampshire       BART STUPAK, Michigan
JOSEPH R. PITTS, Pennsylvania        GENE GREEN, Texas
MARY BONO, California                KAREN McCARTHY, Missouri
LEE TERRY, Nebraska                  TED STRICKLAND, Ohio
MIKE FERGUSON, New Jersey            DIANA DeGETTE, Colorado
DARRELL E. ISSA, California          JIM DAVIS, Florida
C.L. ``BUTCH'' OTTER, Idaho          JOHN D. DINGELL, Michigan,
JOHN SULLIVAN, Oklahoma                (Ex Officio)
JOE BARTON, Texas,
  (Ex Officio)

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Allred, Barry, Chairman, Jacksonville Regional Chamber of 
      Commerce...................................................    46
    Brown, Mark H., Executive Vice President, Association and 
      Club Services, AAA.........................................    42
    Friend, Patricia A., International President, Association of 
      Flight Attendants--CWA.....................................    50
    Lounsberry, Fred J., Senior Vice President of Sales, 
      Universal Studios Recreation Group.........................    33
    Pearson, Eric, Senior Vice President, E-commerce, 
      Intercontinental Hotels Group..............................    37
    Verdery, C. Stewart, Jr., Assistant Secretary, Border and 
      Transportation Security Directorate, Department of Homeland 
      Security...................................................     7
Additional materiial submitted for the record:
    Baker, Douglas B., Deputy Assistant Secretary of Commerce for 
      Service Industries, Tourism and Finance, prepared statement 
      of.........................................................    65
    Travel Business Roundtable, prepared statement of............    68
    Travel Industry Association of America, prepared statement of    74

                                 (iii)

  

 
   TRAVEL AND TOURISM AND HOMELAND SECURITY: IMPROVING BOTH WITHOUT 
                           SACRIFICING EITHER

                              ----------                              


                        WEDNESDAY, JUNE 23, 2004

              House of Representatives,    
              Committee on Energy and Commerce,    
                       Subcommittee on Commerce, Trade,    
                                   and Consumer Protection,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2322 Rayburn House Office Building, Hon. Cliff Stearns 
(chairman) presiding.
    Members present: Representatives Stearns, Shimkus, Shadegg, 
Radanovich, Bass, Terry, Otter, Barton (ex officio), 
Schakowsky, Gonzalez, Green, McCarthy, and Davis.
    Staff present: Chris Leahy, majority counsel and policy 
coordinator; Brian McCullough, majority professional staff; 
William Carty, legislative clerk; and Jonathan J. Cordone, 
minority counsel.
    Mr. Stearns. Good morning, everybody. I am pleased to 
welcome everyone to the Commerce, Trade, and Consumer 
Protection Subcommittee hearing on ``Travel, Tourism and 
Homeland Security: Improving Both Without Sacrificing Either.''
    Today's hearing will take a fresh look at our travel and 
tourism industries through the prism of the increased homeland 
security measures that were instituted in the wake of 9-11 
attacks. We also will hear more about the current state of the 
industry and how the additional security measures necessitated 
by global terrorism are being facilitated and deployed by the 
U.S. travel and tourism sector.
    With the official start of summer just having passed, our 
beaches, resorts and National Parks and amusement parks are in 
full swing and providing travelers, both domestic and 
international, the best this great country can offer. Families 
are packing up their cars, boarding planes and heading to 
destinations far and wide to enjoy their hard earned vacations.
    As a member representing a State with a vast array of 
favorite destinations and attractions, I am especially pleased. 
I also realize that everyone in the country's 50 states--in 
fact, almost every community--feels the positive impact of 
travel and tourism in its local economy.
    According to the Department of Commerce, the travel and 
tourism sector contributes an average of 3.5 percent to U.S. 
GDP and employs, directly and indirectly, over 17 million 
Americans. In fact, the travel and tourism sector is one of the 
few with a trade surplus, due in part to the lucrative business 
from international visitors attracted to the incredible variety 
and quality of U.S. tourist destinations for both business and 
pleasure.
    I think it is fair to say that the travel and leisure 
business is a serious business here in the United States. There 
is no question that the September 11 attacks severely impacted 
the travel and tourism business nationwide, particularly in 
States like mine that derive a very significant part of their 
economic wellbeing from the travel and tourism sector.
    While the period following September 11 was full of anxiety 
and unprecedented challenges, average Americans dealt with its 
challenges and stayed on course with their own lives. Americans 
kept flying, driving, vacationing and simply living their lives 
in the face of this change. This resolve and optimism got us 
through some very dark days and now is contributing to the 
resurgence of this very important sector of the U.S. economy.
    In fact, AAA reports that for the first 4 months of 2004, 
sales from their agents have jumped 23 percent over last year, 
and are beginning to close in on pre-9-11 levels. Recent 
surveys indicate that travelers feel more secure than ever when 
they travel and visit destinations.
    Much of this renewed confidence is a direct result of the 
hard work being done to integrate heightened security into the 
existing travel and tourism infrastructure. The result is that 
more people are going on that dream vacation, because they feel 
things are safer than ever before.
    I share that enthusiasm, and would like to commend the 
representatives from the travel and tourist industry and the 
Department of Homeland Security who have joined us today for 
their team effort to keep Americans and all travelers safe and 
able to enjoy all the fantastic sights and attractions this 
great country offers without undue fear and concern.
    My colleagues, I would also like to especially welcome Mr. 
Barry Allred, Chairman of the Jacksonville Regional Chamber of 
Commerce, that represents an area I am especially proud to 
serve in the Congress and call home. Jacksonville, like the 
rest of the Nation, had a great deal to contend with after the 
9-11 attacks: A travel and tourism sector battered by an 
immediate collapse in business activity and an economy heavily 
dependent on tourism.
    I am very proud to say that Jacksonville has since 
weathered those difficult times by using novel marketing, 
expanding new tourism business investment, notably in the 
cruise ship business, and managing risk while developing a 
growing travel and tourism sector, skills and expertise that 
will serve the Jacksonville area as we proudly host the 
Superbowl in February next year.
    Jacksonville's success highlights the importance of finding 
ways to help better facilitate coordination between the 
government authorities and stakeholders to make our skies and 
highways safer and our resorts and attractions more secure.
    We are off to a good start, with much work to be done. 
Fundamental issues like security processing standards, 
international harmonization, passport/visa policy are 
challenges. So I look forward to hearing from our witnesses on 
where things are today currently standing.
    I am also anxious to explore how Congress can assist to 
improve industry-government cooperation in this continuing 
endeavor, including hearing about the progress we have made as 
well, and the obstacles that remain.
    Again, I want to thank you all for your important work to 
establish the United States as the first and, I believe, safest 
choice for worldwide travel and tourism. I welcome the 
witnesses, and look forward to their testimony.
    With that, my distinguished colleague. Ms. Schakowsky.
    Ms. Schakowsky. Thank you, Mr. Chairman, for convening 
today's hearing on travel and tourism and homeland security. I 
appreciate the opportunity to address this critical aspect of 
the U.S. economy and U.S. national security. With the summer 
travel season official off to a start, today's hearing is 
particularly timely.
    International travel is one of the largest exports for the 
United States, ahead of agricultural and automotive, and making 
it the largest services export category, amounting to 27 
percent of all service exports. In 2003, the travel surplus in 
the travel and tourism sector was $4 billion.
    This accounts for the higher level of spending by 
international visitors to the United States versus what U.S. 
residents spend abroad. International visitors, along with 
business travelers, constitute the most lucrative part of the 
U.S. travel market. According to data, international visitors 
spend four times what a domestic traveler spends while 
visiting.
    In contrast to increased travel and tourism by Americans, 
international visitors, however, have been in slight decline, 
with about 40.4 million in 2003, down about 4 percent from 
2002, and we certainly do hope that that is increasing.
    I talked to my office, which my district is one of the most 
diverse in the country, and we have a lot of requests from 
people abroad who want to come and visit here. While in this 
time since 9-11, etcetera, we have rightfully taken a closer 
look at our visa processing system, major problems seem to 
exist.
    Would-be international visitors have been subject to 
unnecessarily long visa approval times, have been arbitrarily 
denied visas, and have been inconvenienced in the process. Many 
of these travelers simply wish to come to the United States and 
spend money on travel, lodging, dining, entertainment and 
retail products.
    If we want to help the industries that rely on those 
travelers and the huge profits they reap from them, we need to 
find ways to stop arbitrary visa denials and implement a policy 
with some realistic, consistent and responsible rationale.
    My Congressional office has dealt with numerous cases where 
people have been invited to attend conferences and meetings on 
human rights, labor, the environment, and other issues, but 
because they are not personally wealthy, they are usually 
denied.
    I have a case, and have had similar cases before, where a 
Russian scientist, a prominent and respected theoretical 
biophysicist who runs the General Physics Lab at the Russian 
Academy of Sciences, has been invited to speak at the Bio-
Electromagnetic Society Conference this week. His case has been 
going through ``administrative processing'' for months, and he 
was unable to attend the conference, because his visa never got 
approved. I sent four e-mails to the consulate on this case.
    I have heard from constituents who have been separated from 
family members for years. Their relatives are repeatedly denied 
visas because of the assumption that they will try and stay 
here. These constituents have offered to put liens on their 
homes and businesses and to post bonds to ensure the return of 
their relatives, but there is not a process in place to allow 
for such assurances.
    The partner of one of the city of Chicago's aldermen wanted 
his sister and parents to come for a visit from Mexico. They 
were repeatedly denied, despite the alderman's assurances that 
he would make sure they returned. Understand, being an alderman 
in Chicago is the highest level of office.
    One constituent asked for our help getting her brother here 
for a visit from Pakistan to see their ill mother. He has a 
business, wife and kids in Pakistan and was still denied. A 
prominent member of the Indian community's daughter is getting 
married. Her fiance's parents have been repeatedly denied 
visitor's visas to attend the wedding, despite the fact that 
they own a business in India.
    One woman from Columbia was very ill, wanted to see her 
sister before she died. Her sister was denied, because she does 
not have any financial assets. The constituent died, and we 
were able to get the sister here to pick up her sister's ashes 
and take them back to Columbia.
    Musicians, including the famous Grammy winning Buena Vista 
Social Club, have been invited to participate in concerts or 
festivals here and have been denied. At some point, we had 
better start thinking seriously about how we view and approach 
the world and about how we are perceived. If we don't, people 
will choose to go elsewhere for vacations and business, and we 
had better get our priorities straight and devote needed 
resources to making America truly safer.
    Again, thank you, Mr. Chairman.
    Mr. Stearns. I thank my colleague. Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. I appreciate the 
comments made by colleague from Illinois, and I have worked on 
some of these visa issues myself. There is legislation 
especially for Polish emigres that we are addressing the visa 
concern, and I think--I deal a lot with the NATO Parliamentary 
Assembly and our NATO allies in some of these new emerging 
democracies, former Eastern Bloc countries. Addressing the visa 
issue is a concern.
    We need to treat them like we do any of our other allies in 
the North Atlantic Alliance. So I appreciate her comments on 
that.
    Let me use the rest of my time just to welcome someone from 
Kosovo. She is Merinda Sana. She is in the back. She is 
probably going to be embarrassed if I introduce her. She is 
going to be shadowing me today. Now that might not be an 
exciting thing for many folks, but we are glad to have her. She 
studies economy and finance at the University of Pristina.
    Merinda joined the Hope Fellowship Program with the purpose 
to gain an understanding of relations between governmental 
institutions, NGO's, and citizens of America to explore the 
procedures and process of government. So we haven't had a 
chance to visit. She gets to see me in action in this 
subcommittee, Mr. Chairman, and I appreciate that, and I look 
forward to spending the day with her.
    Ms. Schakowsky. Would the gentleman yield?
    Mr. Shimkus. I will.
    Ms. Schakowsky. If I could also introduce a guest from 
Kosovo--I want to say this right--Nafiyeh Berisha, who 
currently works in the Assembly of Kosovo as a deputy. She is 
also Vice President of the Committee for Labor and Social 
Welfare within the Assembly and represents the Democratic 
League of Kosovo and the Parliament.
    So I welcome her today, and she will be shadowing me as 
well. Thank you.
    Mr. Shimkus. It would be great for them to compare stories 
after they are done, Jan. I yield back, Mr. Chairman.
    Mr. Stearns. I thank my colleague.
    The gentleman from Texas, Mr. Gonzalez.
    Mr. Gonzalez. I waive opening statement.
    Mr. Stearns. Mr. Terry.
    Mr. Terry. The same, waive.
    Mr. Stearns. Ms. McCarthy.
    Ms. McCarthy. Waive.
    Mr. Stearns. Mr. Otter.
    Mr. Otter. Waive.
    [Additional statements submitted for the record follow:]

    Prepared Statement of Hon. Charles F. Bass, a Representative in 
                Congress from the State of New Hampshire

    Thank you, Mr. Chairman for holding this hearing. I will be very 
brief.
    I first would like to apologize that we were unable to provide 
witnesses from New Hampshire for this hearing but I look forward to the 
discussion.
    I want to stress the importance this hearing has on protecting 
American small businesses. Among all the other issues we'll talk about 
today, the H-2B visa program is a crucial resource to fill jobs in 
tourism and other seasonal industries throughout the nation. Reaching 
the 66,000 cap in early March will hurt businesses across the nation 
and particularly summer tourism in the Northeast.
    In New Hampshire alone, this crisis will directly affect 600-700 
jobs. Approximately, 65,000 people annually are employed in the 
hospitality and tourism industry in the Granite State.
    In FY2003, 1,200 of those positions were held by H-2B workers that 
make up 1.8% of the NH tourism workforce. This may seem an 
insignificant number to some, however, most likely these positions will 
remain unfilled due to the inability to find a local workforce or 
recruit from other regions of the United States.
    Without filling these positions--it will be financially detrimental 
both in the short- and long-term for small businesses. It will result 
in poorer service which will ultimately lower spending and discourage 
future travel to the mountain, lake, and seacoast areas of New 
Hampshire. This affects a $3.8 billion dollar industry in New 
Hampshire.
    I look forward to the discussion of how to deal with this situation 
in a manner that will not sacrifice our national security. Again, I 
would like to thank the witness panel for coming to today.

                                 ______
                                 
 Prepared Statement of Hon. C.L. ``Butch'' Otter, a Representative in 
                    Congress from the State of Idaho

    Thank you, Mr. Chairman, for providing us with the opportunity to 
look at the impact our nation's homeland security measures have on the 
day-to-day activities of the American people.
    Summer is the time when many Idahoans pack up their cars or board 
airplanes to visit friends and family, travel to new and exciting 
destinations, or just get away for a little rest and relaxation. As 
many of them set out on these trips, it is timely that we take a look 
at how recent changes in security measures have changed the way they 
travel. New security measures have without a doubt brought the 
government into more direct contact with the lives of ordinary 
Americans, and I am interested to hear from our witnesses today how 
travelers are responding to this added government presence as they move 
from place to place.
    Increased security has not only affected the normal activities of 
individuals, but it has had a significant impact on our nation's 
economic health. Tourism is a major component of Idaho's economy, and 
every year people come from all over the country and the world to fish, 
hike, and ski in my state. As many rural communities throughout my 
district have been forced to be less dependent on logging and other 
natural resource industries, they have increasingly turned to tourism 
to sustain their economies and provide jobs for Idahoans. Increased 
security regulations can significantly burden smaller communities that 
do not have the resources to meet the new demands we have put on them. 
It is important that we not overlook the rural areas of our country as 
we consider the impact these new measures are having on the economy.
    Traveling is important for more than just the opportunity to ``go 
on vacation.'' When we go to new places and meet new people, we get to 
experience a different kind of life and understand each other in new 
ways. It's not surprising that one of the greatest ways to promote 
freedom and democracy is to show it to people by letting them see it 
being lived out. Freedom is contagious, and when those who live under 
oppression see what they are missing, they will want it. In our quest 
to take the light of democracy to the dark places of the world, our 
best warriors and ambassadors are ordinary, freedom-loving Americans.
    This is why I am so disturbed by our nation's current policy toward 
Cuba. We talk about bringing democracy to a people who have suffered 
under the harsh fist of a dictator for decades and we look for a regime 
change in this area of the world. And yet for forty years we have 
effectively shut off the Cuban people's access to democracy. We have 
not allowed Americans to travel to Cuba or encouraged American 
companies to do business with Cuba. Is anyone surprised, then, that in 
four decades we have seen little change in the political climate in 
that country? It is bad policy to say that we support families and then 
encourage the breakdown of the family unit by limiting the support 
Cuban-Americans can provide to family members still stranded in Cuba. 
It is bad policy to say that we defend our God-given freedoms, 
including the freedom to travel, and then deny American citizens the 
right to move about the world as they please. And it is bad policy to 
say that we long to see a democratic and free Cuba and then to refuse 
the Cuban people the opportunity to see freedom in action.
    I look forward to spending time today examining how we can 
encourage travel to and within our country--and by extension, encourage 
the spread of freedom and democracy throughout the world. As we do, 
let's not forget those areas of world, like Cuba, where we have 
forgotten our ultimate goal in favor of outdated and ineffective 
policies.

                                 ______
                                 
 Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy 
                              and Commerce

    Three years ago, we would have dismissed the suggestion that travel 
to and within the United States would be higher three years later under 
new, stricter security measures for travel coupled with higher fuel 
prices. Yet that is exactly where we find ourselves today. Forecasts 
predict this may be the best summer of travel in several years. The 
Commerce Department recently reported it was the best quarter ever for 
travel and expects that trend to continue. Additionally, some 
traditional tourist destinations are reporting record-breaking numbers 
of visitors this year.
    We have an obligation to protect the safety of our citizens and 
international visitors traveling to and within America. The long-term 
health of the nation depends on protecting our borders and the safety 
of everyone within them. That does not mean, however, that we have to 
sacrifice our tourism industry for better security.
    To the contrary, statistics demonstrating increased travel confirm 
that increased security measures and increased travel in the U.S. are 
not mutually exclusive. In fact, improved security can be an asset for 
our travel and tourism industry competing in a global market. The more 
comfortable foreign travelers feel about traveling here, the better it 
is for our tourism industry and everyone whose job is related to 
tourism.
    It is important to recognize the economic benefits of travel and 
tourism and why they are vitally linked to maintaining security. And 
make no mistake; the economic impact is significant. The Commerce 
Department projects receipts from foreign travelers at $86 billion 
dollars this year. That will equate to a $3 billion dollar surplus. It 
is one of our few industries that have consistently maintained a trade 
surplus.
    The economic impact is not limited to the billions of dollars that 
visitors spend here. There is a multiplier effect. Industry calculates 
that the various segments of the market--from hotels, restaurants, 
airlines and local attractions--directly and indirectly employ 17 
million workers.
    Given this context, it is critical to maintain a system to 
continuously examine the progress and impact of security changes that 
have been implemented since 9-11. We need to ensure that the system 
provides a diagnostic monitor for both sides of the equation--security 
agencies and private industry--to evaluate and incorporate changes in 
information as they become available. Information and communication are 
two of the most valuable assets to providing meaningful security 
policy. Federal agencies have to effectively communicate their policy 
and regulations. Industry needs to be flexible to implement the changes 
and at the same time provide feedback or suggestions where they have 
the knowledge and experience that can enhance security.
    This is no small task. Coordinating the many segments of the 
industry and the information flow is an enormous undertaking. By any 
measure, the Department of Homeland Security's progress to date is a 
remarkable accomplishment given their mandate to implement dramatic 
changes across all facets of our infrastructure in such a short period 
of time.
    Nonetheless, we remain committed to a long-term strategy that can 
address security concerns efficiently. I am confident the process will 
be refined and changes will flow smoothly and seamlessly as we gain 
experience. In the meantime, we will continue to work with the affected 
industries to address their concerns and suggestions that will enhance 
tourism without diminishing safety and security.
    Thank you Chairman Stearns, for focusing the subcommittee today on 
a critical aspect of homeland security. I yield back.

    Mr. Stearns. With that, we will start our first panel: Mr. 
C. Stewart Verdery, Jr., Assistant Secretary, Border and 
Transportation Security Directorate, Department of Homeland 
Security. We welcome your opening statement.

   STATEMENT OF C. STEWART VERDERY, JR., ASSISTANT SECRETARY, 
 BORDER AND TRANSPORTATION SECURITY DIRECTORATE, DEPARTMENT OF 
                       HOMELAND SECURITY

    Mr. Verdery. Mr. Chairman and madam ranking member and 
other distinguished members of the committee, it is a pleasure 
to appear before you today to discuss how the government can 
better facilitate travel and tourism in light of the need for 
enhanced security measures following 9-11.
    As recognized in the opening remarks of the members, as 
well as the testimony submitted for the next panel, the ability 
of prospective students, scientists, tourists, and business 
partners to visit our country is crucial to our society.
    If that travel is disrupted because potential visitors 
believe that travel to the United States is too inconvenient, 
we will experience a devastating effect on our economy in the 
short run and, equally important, the ability of foreign 
visitors to come to our country is critical in furthering 
scientific development and promoting the image of America 
abroad. Of course, we recognize that travel within our own 
borders, especially via aviation, must be both safe and 
convenient.
    My written testimony details in great length many of the 
programs in place or underway to secure our borders and 
facilitate lawful trade and travel, and I will take just my few 
minutes here today to discuss how the Border and Transportation 
Security Directorate, part of the Department of Homeland 
Security, is integrating these policies.
    Now these are usually implemented by our bureaus, 
Transportation Security Administration, Immigration and Customs 
Enforcement, U.S. Customs and Border Protection. We are trying 
to ensure a unified approach to border protection and 
transportation security.
    Now we are making revolutionary changes that are necessary 
and possible in how we decide whether a prospective visitor 
should be admitted to the country, and how that visitor is 
screened and vetted along the way. If you think of points where 
our government interacts with a potential visitor, almost none 
are the same as they were in 2001.
    The visa process, an international flight, the port of 
entry, the departure--all these have changed significantly in 
less than 3 years, and more changes are in store. But our 
investments in better and more comprehensive watch lists and 
better data sharing and in advanced technology are making it 
much more likely we will be able to identify a terrorist or a 
criminal trying to enter our shores.
    The Department of Homeland Security, and BTS in particular, 
work closely with industry partners to craft security conscious 
but passenger friendly policies. Today I will touch on our 
efforts to facilitate travel and tourism through our programs 
affecting visa policy, passenger processing, and operations at 
our 445 airports.
    In relation to travelers required to obtain a visa to the 
United States, DHS assumed lead responsibility for establishing 
visa policy under the Homeland Security Act, and we have begun 
stationing employees in high risk areas to assist consular 
officials in the visa process.
    We have listened to concerns, as was raised this morning, 
raised by industry and academia, and are reviewing programs 
which may be causing unnecessary travel delays. We will 
buildupon the US VISIT and CVIS programs to create a seamless 
process, based on biometrics. that will not only facilitate 
travel, but ensure the integrity of our immigration systems.
    We also aim to improve the customer service aspect of visa 
issuance. This is a comprehensive review and will bear fruit in 
the near future.
    We, of course, also need to secure travel under the Visa 
Waiver Program, which allows short term travel from low risk 
countries without a visa. In fiscal year 2003, about 13.5 
million visitors, about 46 percent of legal arrivals, entered 
under the Visa Waiver Program. While visa-less travel, of 
course, encourages travel and trade with our allies, it may 
also be attractive to those wishing to avoid the visa security 
checks now conducted at U.S. consulates.
    DHS and an inter-agency group are currently conducting 
reviews of the visa waiver countries, including site visits, to 
ensure that each country meets the statutory security measures 
required by Congress, most importantly reporting lost and 
stolen passports, which could be used by terrorists to enter 
the United States. We plan to have those reviews completed and 
reported to Congress by October.
    Additionally, we are very supportive of Chairman 
Sensenbrenner's willingness to introduce and expedite passage 
of a bill that was passed by the full House on June 14, 
extending by 1 year the deadline for countries in the Visa 
Waiver Program to include biometric features in their 
passports, and we are hoping for prompt Senate action on the 
legislation as well.
    As Secretary Ridge has testified, this delay is required to 
meet technical challenges and does not reflect an unwillingness 
of these countries to secure their travel documents, and it is 
very important to remember that we are going to enroll visa 
waiver applicants in US VISIT beginning this fall which, 
hopefully, will address the security gaps associated with the 
extension or providing biometric watch list checks and identify 
verification for subsequent visits to the United States.
    Also last summer, based on specific and credible threat 
intelligence, DHS and the State Department suspended the 
Transit Without Visa and International to International 
programs, which allowed transit through the United States 
between foreign countries without a nonimmigrant visa.
    We are aware of the significant revenue that these programs 
generated for the airline and airport industries, and we are in 
the process of drafting a new regulation which will establish 
an improved transit process with its significantly enhanced 
security measures.
    In an effort to better secure international travel, last 
month DHS finalized a landmark agreement with the European 
Union that permits the legal transfer to DHS of advanced 
passenger name record information, so called PNR information, 
from airlines flying between the EU countries and the U.S. PNR 
data helps us make a determination whether or not passengers 
represent a significant security risk, and also allows us to 
link known terrorists and criminals to co-conspirators.
    Now whether a traveler arrives with a visa or not, DHS must 
ensure that the traveler is who he or she says that she is and 
that there is nothing in the traveler's history that suggests 
he or she may pose a threat to our country. Through the US 
VISIT program DHS is using biometrics such as digital 
photographs and digital inkless finger scans to determine 
whether the person applying for entry to the United States is 
the same person who was issued the visa, and whether he or she 
appears on a watch list or criminal data base.
    Now this program has received much deserved praise for 
adding security without inhibiting travel, and I merely note 
the latest statistics for the record. As of yesterday, using US 
VISIT capabilities, Customs and Border Protection has processed 
5,379,716 passengers, and DOS and DHS have identified 651 
criminals and other inadmissible aliens, based solely on the 
biometric check.
    Last, regarding domestic air travel let me briefly discuss 
the current effort underway by the TSA to secure and streamline 
passenger screening during this peak travel season. Working 
with the Air Transport Association, the Airports Council 
International, North America, the American Association of 
Airport Executives, and other important stakeholders, DHS has 
devised a strategy designed to accommodate the anticipated 200 
million air travelers nationwide between Memorial Day and Labor 
Day weekends.
    Strategies include passenger education to improve 
techniques at the passenger check point, and deployment of 
airport and airline personnel to assist these travelers. In 
addition, we are developing the ability to focus screening 
resources and facilitate travel of ``registered travelers,'' in 
quotes, who have passed the background check.
    In TSA's work on Registered Traveler or RT pilot program, 
we use biometric technology, security assessments, and 
adjustments to screening procedures to determine whether 
customer service can be improved without degrading security. On 
June 28, TSA will launch the first RT pilot in Minneapolis-St. 
Paul International Airport in concert with North West Airlines.
    We also plan on testing pilots at LAX, George Bush 
Intercontinental Airport in Houston, Boston Logan, Ronald 
Reagan, and we appreciate our cooperation with United, 
Continental and American Air Lines.
    We are proud of the efforts that we have made to secure the 
homeland and to facilitate the needs of travelers and tourists, 
but we recognize our efforts to develop 21st Century borders 
and transportation systems are not complete.
    Mr. Chairman and other members of the committee, I look 
forward to your questions in these important areas. Thank you.
    [The prepared statement of C. Stewart Verdery, Jr. 
follows:]

Prepared Statement of C. Stewart Verdery, Jr., Assistant Secretary for 
 Border and Transportation Security Policy and Planning, Department of 
                           Homeland Security

    Chairman Stearns and other distinguished Members, it is a pleasure 
to appear before you today to discuss how the government can better 
facilitate travel and tourism, both domestic and international, in 
light of the need for enhanced security measures and policies in our 
post-9/11 world.
    The travel and tourism industry is comprised of hotels, 
restaurants, shopping centers, travel agencies, airlines, passenger 
rail, buses, rental car agencies, theme parks, and convention and 
visitors bureaus, to name just a few. The travel and tourism industry 
has not yet fully recovered from the enormous and disproportionate 
impact of the September 11 attacks.
    According to the Department of Commerce, travel and tourism 
represented $741 billion in direct and indirect sales, averaging 3.5 
percent of the gross domestic product in 2003. According to the Travel 
Industry Association of America, more than 17 million Americans are 
employed in travel and tourism-related jobs, with an annual payroll of 
$157 billion in 2002. The industry is the first, second or third 
largest industry in 28 states and the District of Columbia, and it is 
estimated that in 2002, travel and tourism generated $93.2 billion in 
tax revenue for federal, state and local governments.
    While enhancing the security of our nation, the Department of 
Homeland Security (DHS) and particularly the Border and Transportation 
Security Directorate (BTS) has worked with industry representatives 
including the Travel Industry of America, Business Travel Association, 
the Air Transport Association and others to craft polices aimed at 
encouraging business and leisure travel throughout the United States. 
In consultation with travel industry stakeholders we have initiated new 
policies and programs that will facilitate travel while ensuring the 
safety of our nation. Today I would particularly like to address 
changes in visa policy, passenger processing, and finally operations of 
our nation's 445 airports.

Visa Policy:
    The movement of people across U.S. borders is critical to the U.S 
economy. Foreign tourists, businesspeople and legal workers are crucial 
to our success. There is a concern that with immigration and visa 
policy under a department dedicated to security, the service side will 
suffer. Over the past months, DHS has made a tremendous effort to 
combat this perception, and examine how we can change policies to 
facilitate travel while ensuring safety to our nation.
    As you know, the Administration has made significant changes to the 
visa process and entry screening requirements since 9/11 to provide 
better security in light of the revised threat assessment to our 
national security. The percentage of visa applicants who are required 
to appear at a consular office for a personal interview has been 
steadily increasing over the past year. As of August 2003, the 
Department of State implemented a new policy which requires a personal 
appearance for nonimmigrant visa applicants with a limited waiver to 
only a few categories of exceptions, such as diplomats. And in 
coordination with the Department of Justice and Department of State, we 
have added more interagency security checks.
    Under the Homeland Security Act, DHS has assumed lead 
responsibility for establishing visa policy, and has begun stationing 
employees in high-risk areas to assist the consular officers in the 
visa process. Subject to certain exceptions, DHS can establish visa 
policy and has final authority over DOS-initiated visa guidance 
concerning: alien admissibility, classification, and documentation; 
place of visa application; personal appearance/interviews; visa 
validity periods and the Visa Waiver Program.
    Over the past several months, DHS, and particularly BTS and the 
Bureau of Citizens and Immigration Services, have conducted a 
comprehensive review of the existing immigration laws, regulations, and 
policies to ensure that our immigration goals, policies, and laws are 
properly aligned in relation to visa issuance and policy. We have 
called on staff from US-VISIT, Customs and Border Protection and 
Immigration and Customs Enforcement to bring their best people and 
thoughts to the table to aggressively effectuate change in this arena. 
Furthermore, senior DHS leadership, including myself, have met with 
numerous private sector groups and schools to discuss their concerns 
and identify what policies have an impact on the business travel, 
international students, and scientific research, which are all vital to 
our economy.
    We have listened and over the next few months DHS will work with 
the White House and interagency partners to consider changes to 
programs, as well as looking at new ways to facilitate secure travel 
through biometrics without causing any unnecessary travel delays We 
will build upon the US-VISIT system to create a seamless process that 
will not only facilitate travel but also ensure the integrity of our 
system. We are taking a fresh look at old doctrines like reciprocity 
and the customer service aspects of visa issuance. It is a 
comprehensive review and will bear fruit in the near future.

Pre-screening
    One of the keys to security and travel facilitation is knowing who 
is getting on the plane so that our first line of defense is not when a 
passenger arrives at a United States airport.
    Last month working with a broad coalition of interagency partners, 
BTS finalized an important agreement with the European Union that 
permits the legal transfer to DHS of advanced passenger name record 
(PNR) data from airlines flying between EU countries and the United 
States. The purpose of our negotiations was to obtain an adequacy 
finding, under the European privacy directive, which allowed Customs 
and Border Protection (CBP) to receive PNR data from major airlines.
    PNR data is an essential tool in allowing CBP to accomplish its key 
goals: (1) PNR data helps us make a determination of whether a 
passenger may pose a significant risk to the safety and security of the 
United States and to fellow passengers on a plane; (2) PNR data 
submitted prior to a flight's arrival enables CBP to facilitate and 
expedite the entry of the vast majority of visitors to the U.S. by 
providing CBP with an advance and electronic means to collect 
information that CBP would otherwise be forced to collect upon arrival; 
and (3) PNR data is essential to terrorism and criminal investigations 
by allowing us to link information about known terrorists and serious 
criminals to co-conspirators and others involved in their plots, 
including potential victims. Sometimes these links may be developed 
before a person's travel but other times these leads only become 
available days or weeks or months later. In short, PNR enables CBP to 
fulfill its anti-terrorism and law enforcement missions more 
effectively and allows for more efficient and timely facilitation of 
travel for the vast majority of legitimate travelers to and through the 
United States.
    Another important tool is Advance Passenger Information System 
(APIS) data. This is the information coded in the machine readable zone 
of your passport and transmitted electronically as part of a crew or 
passenger manifest to CBP for advanced analysis and for targeting of 
passengers traveling to and departing from the U.S. The National 
Targeting Center (NTC) uses PNR and APIS data in combination with a 
host of other passenger, cargo intelligence and threat information to 
conduct a risk analysis that helps to identify potential terrorists and 
targets for additional scrutiny. During the period of heightened alert 
last December, the NTC played a pivotal role in analyzing information 
that led to the delay of several international flights that were 
determined to be at risk. In the coming months, DHS will develop 
guidance governing the transmission of APIS data. This rule will 
combine prior legacy US Customs Service Interim Rule and the legacy INS 
Proposed Rule, both of which have received substantial comments from 
the airline industry, together with TSA requirements for crew 
manifests.

Visa Waiver Program:
    The Visa Waiver Program (VWP) enables citizens of certain countries 
to travel to the United States for tourism or business for ninety days 
or less without obtaining a visa. While visa-less travel encourages 
travel and trade with our allies, it also makes the program attractive 
to those wishing to avoid visa security checks conducted at U.S. 
consulates abroad. To help address this security vulnerability, the 
Enhanced Border Security and Visa Reform Act (EBSA) requires that 
beginning on October 26, 2004, VWP countries have a program in place to 
issue their nationals machine-readable passports that are tamper-
resistant and incorporate biometric and document authentication 
identifiers that comply with International Civil Aviation Organization 
(ICAO) standards as a condition of continued participation in the VWP 
program. The law also requires that visitors coming to the United 
States under the VWP present machine-readable, tamper-resistant 
passports that incorporate biometric and document authentication 
identifiers, if the passport is issued on or after October 26, 2004. 
Furthermore, DHS is required to install equipment and software at all 
ports of entry to allow biometric comparison and authentication of 
these passports.
    In FY03, over 13.5 million visitors (about 46 percent of all 
controlled arrivals) entered under the VWP.
    There have always been concerns about possible security 
vulnerabilities created by any ``visa free'' travel programs. This is 
particularly true now, in light of recent enhancements to the visa 
issuance process. However, the permanent program legislation and 
subsequent amendments include provisions to address the law enforcement 
and security interests of the United States. The program now requires 
that:

 each participating Visa Waiver Program country certify that it has a 
        machine-readable Passport (MRP) program;
 a VWP traveler present an MRP on 10/26/04--a deadline that the 
        Secretary of State has already extended--following a one-year 
        waiver by the Secretary of State;
 participating countries be evaluated against statutory criteria every 
        2 years;
 participating countries establish a program to issue MRPs that are 
        tamper-resistant and incorporate biometric and document 
        authentication identifiers that comply with standards 
        established by the ICAO by October 26, 2004; and
 VWP travelers present ``biometric-enabled'' passports if the 
        documents are issued after that date.
    By law, DHS is required to review all participating countries 
periodically for continued participation and report to Congress. 
Several countries (Slovenia, Belgium, Italy, Portugal, Uruguay, and 
Argentina) were reviewed by the legacy Immigration and Naturalization 
Service (INS), and two (Argentina (2002) and Uruguay (2003)) were 
removed from the program. DHS, in coordination with the Department of 
State, is currently conducting reviews of the remainder of the 
countries and will complete the reviews by October. This will be the 
first comprehensive review of the countries and will form the 
``baseline'' for future reviews. I can assure you that these reviews 
will not be a cursory process: we will be asking tough questions as to 
a VWP country's compliance with the statutory criteria. Among these 
are:

 a low nonimmigrant visa refusal rate;
 a machine-readable passport program, and after 10/26/04, biometric-
        enabled passport programs must be in place;
 a country designation may not compromise U.S. law enforcement and 
        security interests, including enforcement of U.S. immigration 
        laws and procedures for extraditions to the U.S.;
 the country must certify that it reports to the U.S. on a timely 
        basis the theft of blank passports issued by that country; and
 low immigration violation rate (overstays, etc.).
Biometric Deadline and Biometric Enhancements
    Under the Enhanced Border Security Act, after October 26, 2004, VWP 
applicants with non-biometric passports issued after that date will not 
be eligible to apply for admission under the VWP. While most VWP 
countries will be able to certify that they have a program in place, 
due to technological limitations, actually producing biometric 
passports by that date will not be possible. Limiting VWP participation 
could lead to serious disruptions to travel and tourism because 
millions of VWP travelers may choose not to travel to the U.S., 
resulting in billions of dollars of lost revenue to the U.S. economy. 
It may also cause friction with some of our closest allies in the war 
on terror.
    Additionally, the EBSA requires DHS to deploy passport readers to 
authenticate these passports. On April 21st, Secretary Ridge testified 
before the House Committee on the Judiciary that DHS is not currently 
in a position to acquire and deploy equipment and software to 
biometrically compare and authenticate these documents. DHS cannot 
today acquire one reader that will be able to read all chips utilized 
in the ICAO compliant biometrics passports. However we believe that by 
the fall of 2006, the technology required to successfully implement a 
security system based on the ICAO standards will be much more settled 
and allow DHS to derive benefits envisioned when the original EBSA was 
enacted.'' Accordingly, DHS and DOS jointly requested that the October 
26, 2004 deadline be extended to November 30, 2006 for the production 
of ICAO-compliant biometric passports and the deployment of equipment 
and software to read them.
    On June 14, The House approved bipartisan legislation, H.R. 4417, 
extending for one year the deadline by which countries in the Visa 
Waiver Program (VWP) must include biometric features in their 
passports; we are appreciative of Chairman Sensenbrenner's willingness 
to move extension legislation quickly. We need to continue the ability 
of VWP nationals to travel to the United States visa-free. At the same 
time, we are going to enroll VWP applicants in US-VISIT, which will 
alleviate any security gaps associated with the extension by providing 
biometric watchlist checks and identity verification for subsequent 
visits to the United States.
    ICAO specifications for biometrics in passports are part of a 
process, not the end state. The international communities, both public 
and private sectors, are moving this process forward. Based on the 
information provided to us by these countries on their status and their 
expected implementation dates, as well as DOS's own experience as it 
moves to implement this standard for U.S. Passports, we believe that 
all countries will be compliant by the November 30, 2006.
US-VISIT
    What DHS and ICAO are working toward is a seamless border, which 
expeditiously allows bona fide visitors to enter the country, while 
catching those seeking to do harm. We have been able to work toward 
this goal through the US-VISIT program.
    Our border management system impacts the security of our citizens 
and our visitors, affects billions of dollars in trade and travel and 
helps define relations with our international partners. There is a need 
to improve this system and bring it into the 21st century with a new 
integrated system of technological processes that will keep our 
country's economic and national security strong. This 21st century 
technology will provide an important step toward achieving the 
President's goal of secure U.S. borders.
    US-VISIT is a continuum of security measures that begins before 
individuals enter the United States and continues through their arrival 
and departure from the country. Using biometrics such as digital, 
inkless fingerscans and digital photographs, DHS is able to determine 
whether the person applying for entry to the United States is the same 
person who was issued the visa by DOS. Additionally, DOS and DHS use 
biometric and biographic data to check against lookout data, including 
extracts of criminal history data, improving DOS's ability to make visa 
determinations and DHS's ability to make admissibility decisions at 
entry.
US-VISIT procedures are clear, simple, and fast for visitors.
    DHS deployed the first increment of US-VISIT on time, within 
budget, and has exceeded the mandate established by Congress as it 
includes biometrics ahead of schedule. On January 5, 2004, US-VISIT 
entry procedures were operational at 115 airports (covering 99% of air 
travelers who use visas to enter the United States) and 14 seaports. In 
addition, we began pilot testing biometric exit procedures at one 
airport and one seaport. As of June 8, more than 5 million foreign 
visitors have been processed under the US-VISIT entry procedures.
    At various points in the pre-entry, entry, status management, and 
analysis processes, decision makers are supported by systems checks 
against data extracts from law enforcement and intelligence sources 
that identify persons of interest for various violations.
    All names and fingerscans are checked against watch lists to 
identify known or suspected terrorists, criminals, and immigration 
violators. Terrorist watch list checks are coordinated through the 
Terrorist Screening Center (TSC).
    As of June 18, US-VISIT has matched over 579 persons against 
criminal data and prevented more than 196 known or suspected criminals 
from entering the country. Four hundred and seventy-nine people were 
matched while applying for a visa at a State Department post overseas.
    We respect our visitors' privacy and seek to enable them to pass 
through inspection quickly so they can enjoy their visit in our 
country. However, as people attempt to enter the United States, we must 
know who they are and whether they intend to do us harm. The ability of 
US-VISIT to rapidly screen applicants' biometrics and biographic 
information through watchlists and other selected data means we can 
have security and control without impeding legitimate travelers, and we 
can also help protect our welcomed visitors by drastically reducing the 
possibility of identity theft. Moreover, as visitors leave the country, 
we must know that they have not overstayed the terms of their 
admission.
    US-VISIT will be rolled out in increments to ensure that the 
foundation is strong and the building blocks are effective. With the 
deployment of the entry components at air and seaports, we have made a 
strong beginning. We are on track to meet the December 31, 2004, 
deadline to integrate US-VISIT procedures at the 50 busiest land border 
ports of entry.
    US-VISIT is dedicated to safeguarding the privacy of traveler 
information. US-VISIT has extended the principles and protections of 
the 1974 Privacy Act to all individuals processed through the program--
even though the law only applies to U.S. Citizens and Lawful Permanent 
Residents. US-VISIT has implemented a privacy program that includes a 
privacy policy and a three-stage process for redress, if individuals 
have concerns about their information.
    US-VISIT is critical to our national security as well as our 
economic security, and its implementation is already making a 
significant contribution to the efforts of DHS to provide a safer and 
more secure America. We recognize that we have a long way still to go. 
We will build upon the initial framework and solid foundation to ensure 
that we continue to meet our goals to enhance the security of our 
citizens and visitors while facilitating travel for the millions of 
visitors we welcome each year.
Air Transit Program
    The former Transit Without Visa (TWOV) and International-to-
International (ITI) programs allowed an alien to transit through the 
United States without a nonimmigrant visa while en route from one 
foreign country to a second foreign country with one or two stops in 
the United States. Under the TWOV program, a passenger seeking to 
transit through the United States was admitted as a transit passenger 
by a DHS inspector and departed the Federal Inspection Service (FIS) 
area. A TWOV passenger was permitted to make one additional stop in the 
United States. Under the ITI program, the ITI passenger was inspected 
by a DHS inspector but was not admitted to the United States and did 
not leave the secure FIS area.
    The primary purpose of the TWOV and ITI programs was to facilitate 
travel for many qualified aliens allowing them to transit the United 
States en route to a specified foreign country without a passport or 
visa. However, both programs also served to provide the aviation 
industry with significant financial returns. CBP estimates that these 
programs generated approximately $130 million in revenue for 
participating domestic airlines per year. In addition, many U.S. 
airports have also relied heavily on the TWOV/ITI programs for revenue. 
For example, Iberia Airlines has threatened to move its hub operation 
from Miami due to the lack of a transit without visa program. If it 
moves its operation to a Caribbean island, Iberia has estimated the 
loss of revenue to South Florida to be $157 million. Cathay Pacific has 
moved its operation from Anchorage, Alaska, to Vancouver, Canada, due 
to the suspension of the TWOV/ITI programs. One vendor in the Anchorage 
In-Transit Lounge estimates that the Anchorage International Airport 
alone is losing $1.1 million a year due to Cathay Pacific's inability 
to transit Anchorage with its 132,000 ITI passengers per year.
    On August 7, 2003, the Secretary of Homeland Security and the 
Assistant Secretary of State for Consular Affairs published regulations 
suspending the TWOV and ITI transit programs. The suspensions were 
based on specific, credible intelligence that certain terrorist 
organizations had identified these programs as a way to gain access to 
aircraft without first obtaining a visa in order to: (1) take over the 
aircraft to use as a weapon of mass destruction, or to simply cause 
damage to the aircraft; or (2) to abscond during their layover in the 
United States in order to gain illegal entry to the United States.
    In August and September 2003, BTS conducted field visits and held 
meetings with airline industry and the Departments of State and 
Transportation on the possible reinstatement of a security-enhanced 
transit program. On September 22, 2003, the public comment period 
concerning the suspension of the TWOV and ITI programs expired. BTS 
reviewed 17 comments submitted by the air and sea industries on the 
regulation and formulated a proposed plan to potentially reinstate a 
program to allow transit without a visa, the Air Transit Program (ATP).
    On January 12, 2004, special transit procedures were initiated at 
Miami International Airport for certain groups of international 
passengers, including passengers holding Visa Waiver Program country 
passports, passengers in possession of a visa to enter the U.S., and 
Canadian citizens. Similar programs were implemented on a case-by-case 
basis at Los Angeles, Orlando, and San Juan International Airports.
    DHS is now in the process of drafting a new regulation, which will 
set forth a program that will allow airports to have air transit 
lounges, but ensure that the right security measures are in place. We 
are working with Office of Management and Budget and through the 
interagency process to finalize this regulation.

Transportation
    DHS also recognizes that airline transportation is an essential 
component of travel and tourism, being one of the major means of moving 
travelers to tourist destinations. Since the terrorist attacks of 
September 11, the United States has made tremendous strides in 
revamping our aviation security system to respond to what was 
previously the unthinkable, and the airline industry has worked closely 
with the federal government in carrying out these efforts. DHS is 
committed to continuing its work with transportation stakeholders such 
as air carriers, the tourism industry, and airports.

Facilitation in Airports
    DHS, airports and major airlines together devised a strategy 
designed to help accommodate an anticipated 200 million air travelers 
nationwide between the Memorial Day and Labor Day weekends. The 
Aviation Partnership Support Plan (APSP) identifies numerous steps each 
partner can take to smooth the flying experience. Tactics include 
passenger education to improved techniques at the passenger checkpoint 
and the deployment of airport and airline personnel to assist 
travelers.
    On the Memorial Day weekend TSA began a multi-level program to 
increase passenger throughput at U.S. airports. This includes a focus 
on specific airports requiring special attention. In planning for the 
summer travel season, TSA built upon nearly two years of experience 
with high peak travel periods, working with the Air Transport 
Association, the Airports Council International-North America, and the 
American Association of Airport Executives to develop a plan that deals 
proactively with a wide range of challenges posed by the summer travel 
period. The normal increase in air travel occasioned by summer vacation 
plans is only one dynamic that is factored into TSA's planning, and TSA 
is mindful that the summer period will require the agency to sustain 
robust operations over a longer period than during the winter holiday 
season. A number of special events scheduled for the summer months will 
require particular attention, not only because they will increase the 
concentration of travel to particular airports for short periods of 
time, but also because the nature of the events may attract the 
attention of those who wish to do us harm.
    TSA distributed a guidebook to airport Federal Security Directors 
(FSDs) and other TSA airport staff detailing ``best practices'' 
covering a comprehensive range of techniques to speed and enhance 
throughput at the screening checkpoints. The guidance is easy to 
understand and use, and will be amended as techniques are refined and 
improved. As part of the APSP, we identified twenty-five ``focus 
airports'' for special attention. These airports warrant particular 
examination for a variety of reasons that have an impact on the level 
of traffic through the airport-size, proximity to special events that 
may be threat targets, or proximity to high-traffic summer vacation 
destinations. At the focus airports, we are coordinating with our 
stakeholders to provide additional resources to support the screening 
process, such as exit lane monitors, queue handlers, or ticket 
checkers. TSA also provides additional staffing to support screening 
utilizing headquarters personnel and administrative staff in the field 
on a temporary basis. Also, our National Screening Force (NSF) is being 
mobilized as necessary.
    Since the release of the APSP, FSDs have initiated discussions with 
their airport and local air carrier stakeholders to determine which 
best practice opportunities can be implemented locally. Many airports 
submitted their plans early, demonstrating the commitment from all 
parties to collaborate on reducing summer wait times. Our industry 
partners are undertaking a wide range of initiatives from funding part-
time non-screener support for the checkpoint and queuing lines to 
assisting TSA with local outreach programs to providing more space 
surrounding the checkpoint for passengers to ready themselves for 
screening. For example, at Chicago O'Hare, the airport is removing some 
queue space to add additional divestiture tables. At Fort Lauderdale, 
air carriers are providing personnel to assist in managing the queues 
at checkpoints throughout the airport.
    At Logan International Airport in Boston, TSA is using the 
materials provided in the APSP to enhance and clarify training for 
screeners in checkpoint screening procedures, and Logan already 
supplements TSA screening by providing exit lane monitors. At Logan, 
Massport is an extremely important partner in our security efforts. 
Every morning, TSA, Massport, airlines, airport concessionaires, and 
other governmental stakeholders convene to discuss and resolve 
operational issues at the airport. TSA also meets weekly with Massport 
and the airlines to project passenger volumes, helping TSA efficiently 
schedule screener resources and prepare for the activity levels in the 
immediate days ahead.
    We also recognize the importance of educating summer travelers and 
helping them prepare for what can be expected at our busy airports 
during this high travel season. In conjunction with the release of our 
APSP guidebook, we are conducting national and local media campaigns to 
help prepare summer travelers to do their part in easing traffic 
through our Nation's airports. We are expanding existing passenger 
outreach efforts with a more comprehensive passenger assistance 
program, called READY-SET-GO, to dispense advice to travelers and to 
increase awareness of procedures that will speed up throughput. First, 
this campaign instructs passengers to start getting READY for travel at 
home, by packing and dressing in a way that will expedite processing 
through x-ray machines and magnetometers, and getting information about 
how long it will take to get to the airport, park, check in, and check 
baggage. Second, passengers are encouraged get SET for screening by 
arriving at the screening checkpoint with identification and boarding 
pass accessible, placing carry-on items on the x-ray belt, and 
listening to the guidance of the screener regarding divestiture of 
metal items and shoes. Third, guidance instructs passengers to GO 
through the magnetometer; listen to instructions for a second pass 
through the magnetometer, if necessary; retrieve property; quickly move 
away from the screening area if waiting for other passengers; and 
proceed to the departure area. To ensure wide dissemination to 
travelers, the passenger guidance is posted on TSA's website, and TSA 
works with the airlines to continue providing updated travel support 
information to passengers on carriers' websites.
    Our expectation is that these best practices should be maintained 
for the benefit of security and efficiency, even after the summer 
travel season is over. In addition to best practices, over the longer 
term, there are three broad areas that we are pursuing to enhance the 
security of and customer satisfaction with the civil aviation system: 
(1) improvements in technology; (2) physical changes to airports; and 
(3) better utilization of information to focus screening resources.
    Improvements in technology play a critical role in making our 
screening operations more effective, more efficient, less time 
consuming, and less costly. Technology that is already deployed to 
detect weapons, explosives, and other prohibited items at passenger 
checkpoints include more than 1,700 Enhanced Walk Through Metal 
Detectors (EWTMD), 1,219 Explosives Trace Detection (ETD) units, and 
1,801 x-ray machines.
    To make our civil aviation system more secure and less burdensome, 
we are developing the ability to focus screening resources on those 
passengers who actually constitute a higher risk, while at the same 
time foregoing enhanced screening procedures on passengers who pose a 
lower risk. TSA's work on the Registered Traveler (RT) Pilot Program 
will use biometric technology, security assessments and adjustments to 
screening procedures to determine whether customer service can be 
improved without degrading security. TSA envisions that a fully 
implemented RT program would be purely voluntary and would offer 
qualified participants an expedited travel experience. Volunteer 
participants in the RT Pilot Program will be requested to submit 
personal data, such as biometrics (fingerprint and iris scan), that 
will be used for identity verification. Participants in the program 
will still be required to submit to a modified screening procedure for 
weapons, explosives, and prohibited items at the checkpoint.
    TSA has collaborated with key internal and external stakeholders 
regarding the feasibility of such a program. On June 16, TSA Acting 
Administrator Stone announced the launching of the first RT pilot at 
Minneapolis-St. Paul International Airport with Northwest Airlines 
later this month. In late July, TSA will implement the program in Los 
Angeles International Airport in coordination with United Airlines. In 
early August, TSA will begin operating in George Bush Intercontinental 
Airport/Houston in coordination with Continental Airlines. By the end 
of August, TSA intends to have the program also active in both Boston 
Logan International Airport and Ronald Reagan Washington National 
Airport both in coordination with American Airlines.
    While TSA is not planning to charge a fee to passengers to 
participate in the RT Pilot Program, TSA will await the results of the 
Pilot Program to determine the feasibility and effectiveness of broader 
implementation, including what costs, if any, would be incurred by 
those passengers who wish to participate in a future phase of the 
voluntary program. If implemented on an expanded basis, the RT program 
would most likely be funded via a fee-for-service business arrangement. 
Upon conclusion of the pilots, results will be analyzed to ascertain 
security and customer service benefits and to determine the best 
approach for proceeding.
    Mr. Chairman and other distinguished Members of the Committee, this 
concludes my prepared statement. I would be pleased to answer any 
questions at this time.

    Mr. Stearns. I thank you, and I will start the questioning. 
We are here this morning in this subcommittee hearing, and we 
are talking about perhaps one of the most important security 
practices in the United States, how to protect the country from 
people that come here by air, from outside the country.
    You have talked about your pilot program in Minneapolis. I 
myself have often thought we should have a trusted travelers' 
program to allow a lot of people that come and go to either 
Europe or Asia or within the United States the opportunity to 
move more expeditiously.
    I guess that is what this Registered Traveler pilot program 
is. You say you are using biometrics to coordinate in this 
program.
    Mr. Verdery. That is right. The applicants will----
    Mr. Stearns. Maybe explain a little bit about this pilot 
program. You are hoping then this program could be used 
throughout the United States ultimately?
    Mr. Verdery. Let me describe it. The applicants at each of 
these pilots will provide biometric finger scans and 
biographical information that will be checked first on our 
watch list and other criminal data bases to see if they are 
appropriate applicants. So they will essentially go to the 
airport, register, and the next time they come back, they will 
be able to get their biometrically enhanced identity card that 
can be used for----
    Mr. Stearns. Does that card have their fingerprints on it?
    Mr. Verdery. It will have it embedded, yes.
    Mr. Stearns. Embedded? So they will just take this and scan 
it through?
    Mr. Verdery. To verify the cardholder is the same person 
that is in front of the checkpoint.
    Mr. Stearns. So they check their scan on their fingerprints 
as well as the card or just the card?
    Mr. Verdery. The card is verified to make sure it is the 
same human being, that the person who went through the 
background check and received the card is actually the person 
standing in front of you.
    Mr. Stearns. How do they test the person in front of you 
that he or she is that--with that card?
    Mr. Verdery. The readers can do a one-to-one match. Is the 
biometric embedded in the card the same as the fingerprint 
actually there in front of you. It is like we use in the US 
VISIT program. So essentially, that will be the biometric check 
that will determine is this person who enrolled and passed the 
background check, thereby giving us the assurances that we can 
use the expedited screening measures.
    The trick, though, of course, is we are not going to turn 
off the X-rays, of course. We have to maintain the high levels 
of security, but there are things on the margin we can do to 
speed things up at the checkpoint. We are looking at providing 
dedicated lanes in most of these pilots to speed these people 
through in these five pilot projects.
    In terms of the deployment more broadly, we are going to 
look at these pilots, see what happens. Are customers willing 
to do this? We hope that they are. We think that they will, but 
we need to understand the public reaction to this. We expect 
that there wills be a fee down the road. There is not a fee for 
the pilots.
    Mr. Stearns. There will be a fee for registering.
    Mr. Verdery. We believe that down the road, if this is 
expanded, there will be a fee for registering, although there 
is not a fee to participate in these pilots.
    Mr. Stearns. You know, I think people would pay it if they 
realize they could be expedited.
    Mr. Verdery. We agree.
    Mr. Stearns. Just like an upgraded American Express card, 
you pay for a little bit of the facilitation.
    Mr. Verdery. Exactly. That's right. In terms, though, of 
the plans down the road, we are working with existing funds on 
this right now. Lots of airports--we are beginning with five. 
This is something that, if it works and passengers like it and 
there is improved security, then the process can be rolled out.
    As we move forward, I don't think we are going to see a 
universal rollout. I can't give you a time certain. We have to 
see what the results are before we promise any kind of 
grandiose scheme, but we think this is something passengers are 
going to want. The airlines have asked to work with us on it. 
We appreciate the airports. We think it is a very promising 
program.
    Mr. Stearns. You say you have collected European passenger 
name record data for over a year. Has this indicated--been 
successful? In other words, has this data brought you enough 
information to say that you actually stopped terrorists coming 
into the United States? Give me the credibility of this 
information and how is it going?
    Mr. Verdery. Well, we use the PNR which I mentioned, which 
essentially is the information that would be in your travel 
record that you would give a travel agent or Expedia or another 
online service, along with the APIS information, which is the 
stuff that is embedded at the bottom of your passport that you 
have scanned in when you arrive at the airport. Those two work 
together to provide us information that is then screened 
against watch list and the like.
    They work together quite well, and we have found 
terrorists, criminals, inadmissible aliens frequently, more on 
the latter two, of course. But it is key for vetting these 
flights before they take off, which is a huge security 
advantage if we can scrub these flights, especially if there is 
any kind of indicia of a threat, before they take off in a 
European or other foreign city.
    So access to this information is absolutely critical.
    Mr. Stearns. Just a last question. The House passed 
legislation extending the deadline by 1 year, which requires 
countries under the Visa Waiver Program to include biometrics 
passports. I guess, how have other countries--their 
participation been, and what is the difference between that 
program and the US VISIT program that you are using?
    Mr. Verdery. Well, Congress has a law in place that 
requires countries in the Visa Waiver Program to do two things. 
One is to certify they have a program in place to develop the 
biometric passports, to have the biometric data embedded in the 
passport. We believe all those countries are going to meet 
that. They have a program that is underway.
    The second part, though, is that for each individual 
traveler, beginning October 26, if they get a passport after 
that day, the passport itself has to have the biometric 
embedded in it. That is where the problem is.
    These countries are not going to be able to meet this 
deadline, because the technical standards set by international 
organizations are just in the process of being finalized, and 
the time between that date and when we actually produce 
passports is a lot longer than between now and October.
    So we have asked for a 2-year extension. The House has 
passed 1 year. We are working with the Senate on how that would 
play out over there. Again, as I mentioned, this is not a 
question of will. The countries are proceeding to develop these 
programs, as we are with our own biometric passport program, 
but they are not going to be able to do it by this fall.
    In terms of US VISIT, though, what we decided to do--We 
initially had exempted Visa Waiver travelers from the rollout 
of VISIT, which began in January, because we couldn't handle 
the load of passengers right from the get-go. We decided to go 
after the higher risk travelers. But starting the target, 
September 30, the Visa Waiver travelers, which is quite a 
number, as I mentioned, about 46 percent of travel, will begin 
being enrolled in US VISIT.
    So when they get to the port of entry, just like a visa 
holder, they will be checked against watch lists. They will 
provide their finger scans, the picture. That will be vetted 
against all of our watch lists, criminal data bases, to see if 
there is any kind of indicia of a match.
    So that is a huge security enhancement. In many ways, it 
replaces the benefit that the biometric passport was supposed 
to provide. We think it is a better answer, but we do want to 
have the biometric passport down the line when it is feasible 
for those countries.
    Mr. Stearns. Thanks. My time has expired. The ranking 
member?
    Ms. Schakowsky. I appreciate your telling me that some 
policies are being reviewed and that the customer service 
aspect is also being reviewed. We get a lot of complaints about 
that as well, of people just being rudely treated, feel that 
they have been mistreated. So I look forward--Actually, maybe 
we could have a further conversation about that.
    Mr. Verdery. Sure.
    Ms. Schakowsky. I wanted to raise another issue, which is 
very important to me. One of the witnesses on our second panel, 
Ms. Friend who is President of the Association of Flight 
Attendants, is going to speak to the need for additional 
security training for flight attendants.
    I have been reading some about that, and found that it 
ranges from maybe 20 minutes to a video to more significant 
training. But now that we have secured the pilot's doors, we 
leave in most instances, because we don't have marshals on all 
flights--I don't know what the percent is, but the first lien 
of defense, the first responders, then are the flight 
attendants, who feel themselves and, therefore, their 
passengers to be quite vulnerable without adequate training.
    I wondered if you have read the testimony, if you agree 
that there is room to improve the level of security on 
commercial aircraft, if you think providing additional training 
to flight attendants should be part of those efforts, if you 
are concerned about the inconsistent training, and what you 
plan to do about it, what Congress should do about it, if 
anything.
    Mr. Verdery. Well, we agree with Ms. Friend. We do need to 
do more in this area. We have gotten different sets of guidance 
from the Congress over the several years since 9-11 on how that 
program would look. Three different pieces of legislation have 
affected how we would implement that. But now that we 
understand where the rules of the road are, TSA, one of our 
bureaus, is moving forward pretty quickly with that guidance on 
what the training would look like.
    I know this was a subject of a hearing yesterday over on 
the Senate side. So we have a plan that is in the works to 
provide that training to the flight attendants. We definitely 
agree that they are a line of defense. They are part of this 
layered system of security, along with everything else, the air 
marshals, the doors, the screening, the passenger vetting and 
everything else.
    So it is an important element that we need to get right.
    Ms. Schakowsky. And what is the timeline on that? It seems 
such an obvious gap in our security protocols.
    Mr. Verdery. I believe we are looking at unveiling a 
guidance fairly soon. The trick then is to get people into 
training, which takes time. We are talking many thousands of 
individuals that we need to have the opportunity to be trained. 
So I think you will be seeing some results fairly quickly.
    Ms. Schakowsky. And is this going to be training that is 
paid for by the airlines? How do you envision--Are the airlines 
cooperating and moving forward on this plan?
    Mr. Verdery. The airlines are cooperating with TSA on this. 
In terms of who would pay, we are still working out the details 
as to whether or not this would be an airline cost or a cost of 
an individual person who desires to get the training or perhaps 
it could be a shared responsibility.
    Ms. Schakowsky. Excuse me. Did you say of the individual 
who desires to get the training?
    Mr. Verdery. That's right. Part of this would be a 
voluntary program for attendants who wish to have the training. 
Not everybody would--There is no requirement that every single 
attendant receive this training. It is a voluntary basis.
    Ms. Schakowsky. Quite frankly, I find that really shocking, 
that we would say that flight attendants who feel like 
understanding how to protect their passengers or themselves as 
a--you know, well, maybe I will--This is not some sort of 
career enhancement. We are talking about safety, that we would 
even consider charging those individuals to have that training.
    I just want to go on record--that is the first I heard of 
that--that that would be, in my view, and I think in the view 
of the traveling public, absolutely outrageous that this would 
be viewed as some sort of voluntary, optional thing. So let me 
just say that.
    Mr. Verdery. I understand. There's two issues. There is the 
issue of whether or not it is mandatory, and there is the issue 
of the fees. They are separate, but I take your point.
    Ms. Schakowsky. Okay. Let me just quickly ask: What could 
be the reason for a month's long and finally failed effort to 
get a biophysicist, the head of the General Physics Lab in 
Russia, to come to--Why are we having so much trouble getting 
these widely internationally recognized people to be able to 
come for a meeting?
    Mr. Verdery. For scientists there is a particular program 
that has led to delays that we are taking a close look at, and 
I will just get into it here for a second. It is a program 
called Visa MANTIS, which requires inter-agency reviews of 
applicants with significant scientific background who might 
have access to sensitive technology in this country that they 
could not get in their home country.
    So if they are coming in for a course of study or a 
conference, if they are not a student, those require inter-
agency reviews in Washington, FBI, CIA, Homeland Security, 
Department of State, other agencies. The speed of those depends 
on the applicant. Sometimes they are fast. Occasionally, they 
are slow.
    So this is one of the key areas we are looking at in terms 
of MANTIS. Are there ways that we can speed up these checks, 
both with better data sharing or perhaps extending the time 
period that the check would be good for? But you were right on. 
We hear these complaints all the time of noted scientists or 
students in a course of study that have trouble getting in for 
conferences.
    We are working extremely hard to try to fix this, but you 
can also imagine the dilemma. The last thing you want is to 
bring somebody into the country who is here to steal knowledge 
to use against us. So it is a tricky balance, and we are 
addressing it pretty fast.
    Mr. Stearns. The lady's time has expired. Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. I will be pretty 
brief. I have made two calls in my 8 years to embassies to try 
to continue to find out these questions and try to make sure 
there is a good review of a visa application. Both times they 
did go and do an extra step. One was in the Philippines, and 
most recently was 2 weeks ago in Russia. Both of them were 
denied.
    What I did ask them to do was an extra step in this 
difficult process of making a decision of really, in essence, a 
flight risk, someone who doesn't have the documents. But they 
also then, especially in the most recent example--They gave me 
examples of what that applicant can do in the next round, in 
the next year, to make sure that they wouldn't be--in essence, 
they would be here on a tourist visa, and they wouldn't be a 
flight risk.
    So it is frustrating when you have credible constituents 
who you know they are upstanding members of the community, 
maybe people that I have known for many, many years, 20 years, 
full faith and credit in them. I am just throwing that out in 
that they have--I have deferred to their judgment and haven't 
pushed it any further, and hopefully, it will work out if this 
individual does the steps that they say she should be able to 
do to make her more applicable and able to get a tourist visa 
next year.
    It is hard, and I have worked through it, but the State 
Department has been respectful. I think they have gone the 
extra mile for me.
    Mr. Verdery. Sir, if I could respond to that just very 
quickly. One thing that I think is a misconception among some 
is that the numbers of people who have been rejected for visas 
has gone up sharply since 9-11 because of security checks and 
the like. That is actually not the case.
    The numbers overall of the percentage of people who are 
denied remains about the same. Yes, it is. And again----
    Mr. Shimkus. Yielding my time to my colleague.
    Mr. Verdery. And the reason is because the overwhelming 
majority of people who are denied has nothing to do with 
scientists or terrorism or anything else. It is this intending 
immigrant question: Do they intend to leave? The consular 
official is required to make a determination that they are not 
going to overstay, that they are not coming here to reside. 
That is a statutory provision.
    Now I will say, over the long haul, as we build out the US 
VISIT system with an exit capability where we actually will 
know when people are overstaying--right now the overstay rates 
and tracking is not very good. That may give us the flexibility 
to be more generous on the front end for people who don't have 
demonstrable ties to their home country.
    So the long term issue, I think, about something about the 
exit will really help in this regard.
    Mr. Shimkus. Can I get the Department to look at H.R. 3956, 
which is my bill along with Congresswoman Nancy Johnson. It 
addresses the Polish visa issue. Would you address, if you 
could, what is perceived to be a difference in visa standards 
to new NATO countries versus the old incumbent NATO countries 
and a two-tiered different standard which now, since they are 
all members of the Alliance, you would think there would be 
similarities.
    Mr. Verdery. Of course, we will be happy to take a look at 
it. This issue has been raised directly by the Polish 
government and other similarly situated governments. The key 
thing to remember is that the Visa Waiver Program, which I have 
mentioned in my remarks, is a Congressionally created program 
that has very strict criteria on which countries are eligible, 
based on overstay rates, denial rates for visas, and 
cooperation with us on terrorism, reporting of lost and stolen 
passports.
    There is a whole slew of factors, and certain countries 
just don't meet those criteria, even if--Well, they just don't 
meet the criteria. We will willing to look at anything we want. 
It helps us on the resources end if we can get people into the 
program, but they have to meet the criteria.
    I will say, we have established a Visa Waiver Program 
Office within our directorate to handle both the country 
reviews of the existing countries, as well as applications or 
interest from other countries and to make those kinds of 
assessments.
    The EU has raised this issue with us, because they have a 
legal issue. All the countries of the EU are supposed to be 
treated the same on visa issues. So we understand there is a 
big dilemma there that we are working with them on this. So we 
will take a look at it, and I will be happy to get back to you.
    Mr. Shimkus. Yes, and any suggestions you can make as far 
as what we should do, how we should augment or even words back 
to the countries themselves, and encouraging them to meet some 
minimum standards, that would be helpful.
    Thank you, Mr. Chairman. I yield back.
    Mr. Stearns. I thank the gentleman. The gentleman from 
Texas, Mr. Gonzalez.
    Mr. Gonzalez. Thank you, Mr. Chairman. Mr. Verdery, I 
represent half of San Antonio. We are 150 miles from the 
Mexican border, but the economic health of all those border 
cities along there directly impact my district. So that is part 
of my parochial interest.
    I know there is a great interest, obviously, in combatting 
terrorism, and we don't want to do anything to frustrate that 
effort, but we also need to be realistic about it, and that is 
why we are having this hearing today.
    You have already indicated that the implementation of US 
VISIT and such is delayed along the land borders for a year. Is 
that correct?
    Mr. Verdery. Well, the Congressional mandate is that we 
deployed at the end of last year at airports and seaports and 
at the large land ports of entry at the end of this year, and 
the smaller ones next year. So it is not a delay. That is the 
schedule we were given, and we are on track to meet that.
    Mr. Gonzalez. Is there a request for a delay of the 
implementation at these large border crossings?
    Mr. Verdery. No. We are committed to meeting the 
requirements of the statute, which essentially means having the 
integrated data bases and systems at the ports of entry to 
allow the biometric and biographic checks in secondary visa 
applicants or other people that are referred to as secondary at 
these large land ports of entry.
    We do not envision any changes, significant changes, on 
primary which is where most of the folks will be coming 
through, especially on the Mexican border, and we have 
committed that the border crossing card holders, which is the 
majority of travel, will not be enrolled in VISIT until we can 
do that in a way that expedites their travel and doesn't create 
unacceptable wait times.
    Mr. Gonzalez. What timeframe are you talking about?
    Mr. Verdery. Well, we have just, as you know, ordered the 
prime contract late last month for the system side of VISIT. So 
we are working with the contractor now to ascertain the system 
times, but we are looking at the full biometric rollout for the 
land borders at the big ports of entry sometime in 2005.
    We will have the systems integration in place at the end of 
this year, which is the statutory requirement, but we will have 
the biometric infrastructure in place throughout 2005.
    Mr. Gonzalez. Is that realistic?
    Mr. Verdery. We believe it is.
    Mr. Gonzalez. We won't be here next year looking at 
extensions and such?
    Mr. Verdery. I don't believe so.
    Mr. SGonzalez. All right. Can we start off with a basic 
understanding or agreement. Let's see if you agree with me that 
the economic impact of what may be happening at these airports 
when individuals are coming into our country, though it could 
be great and with some consequence, doesn't compare to what 
would transpire in the consequences on the economies of these 
border cities on individuals crossing the border.
    I don't know if you have ever been to Laredo and 
Brownsville and McAllen It is incredible. If we have a system 
that impedes that, I can assure you of economic disaster for 
all of south Texas. I am not even talking about the other 
southwestern States. Of course, I don't represent them, but 
obviously, we share a similar situation.
    Would you agree with that assessment about economic impact 
being totally different and has to be weighed when you 
implement policy?
    Mr. Verdery. Definitely. We would agree that increasing 
wait times at ports of entry on the southern border, which 
already are long in some cases, would be a problem on the 
economic side, as well as the social side. So we are committed. 
In fact, I think we are statutorily bound to implement 
solutions that do not impede legitimate trade or travel. So 
that is why we are building this out in increments, to make 
sure that we don't.
    We have a very good working relationship with the ports of 
entry, with the communities along there, the Chambers of 
Commerce, the Border Trade Alliance, with the Mexican 
government, to try to find the solutions that will allow us to 
do the check-in/check-out without impeding travel.
    We are looking principally at using advanced technology so 
people can get through without actually having to get out of 
the cars, which we understand would create unacceptable wait 
times. So this is something we need to work with the border 
communities. We have port-by-port outreach plans. Each port is 
different. So this is why it is going to be a staged process.
    Mr. Gonzalez. As you make these statements, it is with the 
full understanding that this does not impede or diminish your 
efforts in combatting terrorism.
    Mr. Verdery. That is right. And again, people have to 
remember, the border crossing cardholders, which is the most 
travel along the Mexican border. These are people who have gone 
through a background check, have a biometrically enhanced 
travel document. It is available to be reviewed in secondary, 
if the inspector has any reason to send somebody to secondary.
    So there is a check of sorts. It is not the same as the 
full US VISIT capability that we would envision down the road, 
but there is a significant anti-terrorism program in place on 
the southern border.
    Mr. Gonzalez. My fear, coming from Texas and the 
southwestern border is, historically, the way we have been 
portrayed as a source many times of illegal activities and 
danger points, and now with the added burden and suspicion of 
terrorists, it is just something that almost plays right into 
the hands of those that have that type of view.
    I know, when I served on Financial Services, it was always 
the border banks who were looking at illegal activity and 
deposits of ill gotten gain, money laundering, when the truth 
is it was all happening out of New York most of the time.
    I think we have the same situation here, and that is my 
biggest fear, and I don't know what you do on a public 
relations part of it, trying to dispel some of those fears that 
individuals have where they say, you have so many people coming 
across the border; wouldn't that be the most likely place for 
the terrorists to blend in and make entry into the country?
    That is a question, of course, that I think you would be 
well prepared to respond to, and I would be more than happy to 
assist you, as well as all of the members representing the 
border states. But I do want to thank you. I am going to be 
following up with written questions which have been submitted, 
obviously, through my office by many of the business 
individuals along the border. I may not represent them, but in 
many ways my district's economic star is hitched to their 
wagon, and I think that goes for many, many communities.
    It has been my experience that the understanding of how we 
operate along the southwestern border has an inverse proportion 
as far as understanding. The more you move up northerly in the 
United States, the less of an understanding. It is quite 
legitimate. It is a way of life, and it just doesn't impact the 
southwest border States. I think other Members of Congress need 
to really look at what trade means along the borders for the 
health of their own economies and that of our country.
    With that, I will say thank you. I will submit questions to 
you, if I can have one assurance from you. It has been my 
experience that we submit questions. We don't get answers for 
an awful long time. That was my experience on Financial 
Services, and I don't mean just Alan Greenspan.
    So if you will promise me a timely response, that way you 
will save my staff a lot of grief, because I will be checking 
with them and wondering why we didn't get a response.
    Mr. Verdery. We endeavor to please on the questions, and I 
will commit to try to get them back as soon as we can. You can 
imagine how many questions do come in, but we will make sure we 
make a special effort on this hearing.
    In terms of the points you raised, if we have just a 
minute, the US VISIT program team, I think, has a very good 
understanding of the economy and the social fabric on the 
southern border. The folks at Customs and Border Protection 
have put onto the US VISIT team the program managers.
    The directors are down there quite a bit, working with the 
port directors, to understand how each port functions, because 
that is the key thing. You can't put in an omnibus solution.
    Each port has to have its own particularized solution that 
recognizes the flows, whether it is all passengers. Are they 
pedestrians? Are they cars or trucks, these kinds of things? So 
we are working on a kind of port-by-port specific basis with a 
good mindset toward facilitating that travel.
    I would take just a few seconds on kind of the introduction 
of your remarks. One of the reasons behind the President's 
Temporary Worker's Initiative, which I know is not the point of 
this hearing, is to steer that traffic through the ports of 
entry.
    We do have people crossing illegally. We have seen our 
efforts on the Arizona border. There isn't a border initiative. 
I have seen an increase in activity. The Temporary Worker 
Initiative is designed to steer traffic through the ports of 
entry where we can do these kind of terrorism checks on people 
so that we can remove some of the hay off the haystack and 
really focus in on those people who can't come through a port 
of entry because they would be denied entry.
    So I know it is not the point of this hearing, but it is 
how we buildup the southern border.
    Mr. Gonzalez. All right. Thank you. My time is up. Thank 
you, Mr. Chairman.
    Mr. Stearns. The gentleman's time has expired. The chairman 
of the full committee, Mr. Barton.
    Chairman Barton. Well, thank you, chairman, and thank you 
for holding this hearing. I have one question kind of off the 
subject and one question on the subject.
    The off the subject question: DOT just announced their 
pilot program for frequent flyers in certain airports. Do you 
have anything to do with that?
    Mr. Verdery. You are probably talking about the TSA 
program, the registered traveler program. Yes, we oversee that. 
Yes.
    Chairman Barton. Well, I just want to encourage you to 
expedite it. I, like most of my colleagues, fly thousands of 
miles a week, and I am willing to be fingerprinted and eye-
printed and, you know, back searched and everything else, if it 
helps get through the airports. So I have been fighting for 2 
years to get that going.
    Mr. Verdery. The first pilot starts in Minneapolis, I 
believe, next week. As I mentioned earlier, there will be five 
total. One of them is at Reagan.
    Chairman Barton. When does that one start?
    Mr. Verdery. I am not sure of the exact timeframe. It is 
sometime in the next 6 to 8 weeks, and it will run for about 90 
days. We are going to then sit down with the results to figure 
out were there improvements in time, something the passengers--
is it worth it to them? We think it will be.
    Chairman Barton. Members of Congress that want to 
participate--what do we need to do? Honest, do we just--How do 
we apply for it? Through the airlines that we use?
    Mr. Verdery. Each pilot has an airport and airline partner, 
and I forget exactly which. Reagan's, I think, is--I want to 
say it is United.
    Mr. Stearns. Will the gentleman yield? I think one of the 
pilot programs is in Houston.
    Mr. Verdery. That is right.
    Chairman Barton. Well, it doesn't help me, if it is not in 
Dallas.
    Mr. Stearns. Oh, okay.
    Chairman Barton. We want Dallas, and we want American 
Airlines between Dallas and Washington.
    Mr. Verdery. Any particular time of day? Seriously, this is 
something, if it works as well as hope it will, will be rolled 
out to other airports, but we have to understand the 
improvements in screening that we can provide without degrading 
security. As you know, being a frequent traveler, the process 
from the time your car shows up at the airport to the time the 
plane lifts off has so many different steps, how can we shorten 
those?
    Some of those are under TSA's control at the check point. 
Some of them are not. Some of them are the parking or the 
lounges or getting through your ticket check-in. All that plays 
together. So this is something we need to work on and would 
like to work on with you.
    Chairman Barton. Okay. My on-the-subject question: What 
special precautions, if any, have been taken for all the cruise 
ships that we have out of the various ports, because you have 
got 3,000 people in a--They are actually totally immobilized 
when they are on that ship. Are there some special precautions 
that are being taken for security purposes on those boats?
    Mr. Verdery. We have actually done a number of things in 
the cruise ship area, and I am not sure I will be able to get 
them all to you right now. But among the ones that I am aware 
of sitting here today: As I mentioned, US VISIT, we are 
deploying that to major seaports. I believe 14.
    So on the passenger and crew side, those folks are being 
entered and exited to make sure that they are not hopping on 
the ship at a port of call and then coming back in, avoiding 
immigration. So there is that check, similar to the airports. 
The pilot for the exit is down in Miami, but it is on the 
entrance at 14 places.
    The Coast Guard is doing a number of things on securing the 
ports where these big cruise ships and other ships would be 
coming in. There is a big initiative that comes into effect on 
July 1 on port security that the Secretary had an event on 
earlier this week in Los Angeles to try to make sure that the 
ports themselves are secure.
    There are other things that both Coast Guard and Customs 
and Border Protection are doing in this area, which I would be 
happy to get to you after the hearing.
    Chairman Barton. Thank you. Thank you, Mr. Chairman.
    Mr. Stearns. Thank the chairman. Mr. Green.
    Mr. Green. Thank you, Mr. Chairman and the chairman of the 
full committee. I am glad Houston is on that list, and I 
appreciate that.
    Mr. Chairman, I would like to put my full opening statement 
in the record.
    Mr. Stearns. By unanimous consent, so ordered.
    Mr. Green. Thank you.
    [The prepared statement of Hon. Gene Green follows:]

  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas

    I'd like to thank Chairman Stearns for holding this important 
hearing as millions of families have already started traveling for 
summer vacation. It is of the highest importance that the government 
keep this travel season safe.
    Intercontinental Airport is in my Congressional district, and it is 
the eighth busiest airport in the United States. It serves over 15,000 
passengers daily and over 34 million passengers go through it gates 
each year, making it the 14th busiest airport in the world.
    The people who work at Intercontinental Airport take pride in the 
efficiency with which they process international passengers. Usually, 
their commitment to safety and expediency keeps people moving which 
keeps commerce moving throughout our city and our country. However, 
inadequate numbers of inspectors at Intercontinental Airport has caused 
great delays and great concern.
    I have contacted DHS and when they existed, the INS, on this issue 
no less than 5 separate times over the last two years.
    Most recently, just one month ago, I joined Senators Hutchison and 
Cornyn, and the rest of my Congressional Colleagues from Houston to 
voice our concern regarding the number of inspectors at 
Intercontinental Airport. Currently, there are 59 inspectors working 
right now. However, 86 inspectors are authorized. As a result, people 
traveling through Intercontinental Airport have a long wait.
    Last summer, the normal waiting time to get processed for an 
international flight was 90 minutes. Well over 11,000 passengers missed 
their connecting flights. The wait is twice as long as the 45 minute 
goal that has been set by Customs and Border Protection. There were 
occasions when passengers had to wait as long as four hours. This is 
unacceptable.
    These wait times result in some travelers missing connecting 
flights. Many airlines are then forced to expend resources on providing 
hotel rooms for people, rebooking flights, and boosting customer 
service staff because security wait times are too long.
    In January of 2005, a new terminal will open at Intercontinental 
with 24 gates and 80 primary inspection booths. As this committee 
examines how we can ensure the safety of our passengers efficiently and 
effectively, I ask that we examine the impact of inadequate staffing 
levels at our nation's high-volume airports.
    Thank you Mr. Chairman. I yield back the balance of my time.

    Mr. Green. Mr. Secretary, I represent a district in 
Houston, and I am fortunate. We have actually two ports of 
entry. Intercontinental Airport is a port of entry, and we also 
have the Houston ship channel in the Port of Houston.
    Since 9-11 with the heightened awareness not only for the 
airlines but also for my port and the largest foreign tonnage, 
the petrochemical complex, one of the frustrations I have seen 
is that--and these are both constituents, and they are job 
centers for my area, Intercontinental Airport because of the 
cargo and the passengers and, of course, the Port of Houston--
and the frustration, not so much for the port, although we need 
to do better and we know that and we will get there, but with 
the wait time at Intercontinental Airport, particularly for 
international processing.
    I know my office has talked to you about that. I know 
meeting with the HS staff over the last number of years and on 
a bipartisan basis from the Houston area delegation, the 
average wait time for international passengers should be 45 
minutes, and last summer in Houston it was 90 minutes.
    What we were seeing is that--and we found out that 
Intercontinental Airport has only 69 percent of the inspectors 
that were authorized by the agency, 59 currently at 
Intercontinental Airport where we have 86 authorized. Past data 
from the last year show that Houston is receiving lower levels 
of staffing as a percentage of authorized full time positions 
than any other airport of a comparable size.
    So I have a line of questioning. One: Is a 45 minute wait 
time--is that the goal of the DHS for international passengers?
    Mr. Verdery. There is not a specific time goal, because it, 
obviously, depends on the passenger flows and the time of day 
and the like, as well as special security events, like we saw 
an increase in backlogs at Dulles over the last few weeks with 
the Reagan events. But an hour is considered unacceptable under 
normal circumstances, and at that point we begin to take 
corrective action.
    So it depends, but 45 minutes is not out of the realm of a 
normal situation.
    Mr. Green. Again, the past data shows that we have a 
smaller number of staff, and meeting with both DHS folks here 
and also in Houston at the airport and looking at other ports 
of entry, whether it be Miami, Atlanta, DFW or Chicago, we did 
see there was significant disparity between the positions 
authorized and filled at different ports of entry, and Houston 
was one of the lowest.
    From a personal experience last August when some of my 
colleagues were coming back, I am glad some of those folks 
weren't my constituents, because I represent the folks who live 
around the airport, but the number of people who were delayed 
and missed their connecting flights. What is frustrating is 
that they will not come through Houston again, because if I was 
in Baltimore or New York or anywhere else, if I miss my 
connecting flight coming through Houston, why I would look to 
Atlanta or Miami or Dallas or anywhere else.
    So I would hope that the competition with our airlines 
would not be based on a government function, which is to clear 
those passengers through the screening.
    Again, I know the folks very well. Like Congressman Barton, 
I go home every weekend and represent the airport, whether it 
is the city officials or Continental Airlines, which is our 
biggest partner, or the DHS, and they are doing everything they 
can. But again, at one time they had allowed overtime. We lost 
that. So we would see that backlog pick up.
    Since we have had our meetings, and I know the airport and 
major airlines estimate that we will need as many as 125 full 
time inspectors from our current authorized of 86. The reason 
for that is we are getting ready to open a new international 
terminal, and part of it is already open, but we will see, I 
think, 24 new gates that are international, and again it was 
designed from DHS in mind to be able to speed the passengers 
through.
    I know you may not be able to give me answers today, but 
are we going to be able to see an increase in authorization, 
but not just authorization but also see an increase in the 
number of positions that are filled for Houston 
Intercontinental Airport?
    Mr. Verdery. Well, Customs and Border Protection has to 
frequently reevaluate the kind of distribution of personnel, 
because as you mentioned, airports are going through expansions 
or new terminals or airlines have new service. We just saw that 
a new airline servicing Dulles has started this week or last 
week.
    So they are constantly kind of reshuffling the figures to 
meet the traffic flows. I am hoping that, since the figures 
that you cited--I am hoping that the situation has improved 
since you had those figures, but I need to go back and check 
and figure out exactly what the CBP plan is to meet the demand 
you mentioned with the new gates.
    Mr. Green. January 2005 in typically the spring travel 
season, the summer travel season. I was just fortunate, and the 
three Members of Congress with me. We were coming back from 
International, and we used our international passports to get 
through, but I don't do that on a regular basis, simply because 
some of those folks in line are my constituents, and I learned 
a long time ago, I don't cut in front of my constituents, 
whether at the food line or the airline.
    I would appreciate, you know, if you could get with me. I 
know Houston is one of the 25 focus airports for the aviation 
partnership support, and again there is a great working 
relationship between DHS and our local city of Houston and 
Aviation Department and our major carrier is Continental.
    I continue to work with you and see how we can do it to 
make sure we have those positions not only authorized but 
filled.
    Mr. Verdery. That is right. It is a continual issue of 
making sure that positions that are authorized are filled. We 
have, obviously, these large numbers, you know, tens of 
thousands of employees. You do have turnover, and you have to 
replace people appropriately.
    We have the same issue on the screener front with TSA. 
People do leave, and we have to replace them with full time or 
part-time people and make sure we are up to our statutory 
position numbers. One thing I might point out is that again we 
have not seen that delays are being caused by the new biometric 
systems being put in place via US VISIT. It is a staffing issue 
or configuration issues. It is not the biometric part of the 
system.
    Mr. Green. That is correct. I have seen that. I, like a lot 
of members, would encourage as much of that as we can with 
biometric, and I will go get my eyes examined or whatever I 
need to do to be able to go through, and I think most frequent 
travelers would do that.
    Mr. Verdery. I mentioned in response to Mr. Barton's 
question about the Reagan. It is actually American Airlines 
that is the partner at Reagan. I just wanted to correct the 
record on that.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Stearns. Mr. Bass.
    Mr. Bass. Thank you, Mr. Chairman, and thank you for 
coming, Secretary Verdery. I appreciate your testimony. I have 
a single question for you that isn't exactly along the lines of 
the questions you have heard so far today.
    As you know, the H2B visa program has been a crucial 
resource to fill jobs in tourism and other seasonal industries 
throughout the Nation, and I would only say that it looks as if 
INS is doing a pretty good job administering it, because they 
apparently reached the $66,000 cap in early March. This has 
created quite a problem for the tourism industry in my neck of 
the woods, in the northeast, because there are--we are 
approximately 600-700 jobs short now for summer help in our 
tourism industry in New Hampshire, and I would assume it is the 
same in other states.
    I am wondering if you have any perspective on this issue or 
any recommendations as to what we might do in order to balance 
the admission process perhaps or increase the numbers or do 
something so that we don't have, in a growing economy, real 
difficulty in meeting the obligations to provide good services 
in the tourist area.
    Mr. Verdery. Congressman, I have heard this issue raised in 
a number of circumstances by a wide range of industries 
affected by this cap, but just for clarification: Within our 
department, when INS was dissolved by the Congress, it was 
essentially divided into three parts.
    The enforcement at the ports of entry went to Customs and 
Border Protection. The investigative side went to Immigration 
and Customs Enforcement, which are both in our BTS Directorate 
where I work. The services side went to the new Bureau of 
Citizenship and Immigration Services or CIS, which is not in 
BTS.
    The enforcement of this $65,000 cap for H2B, as you 
mentioned, is under their authority. As I understand it, this 
is a Congressional statutory number. So that it is not in our 
discretion or in CIS's discretion to waive it or ignore it. 
They have tried to be as flexible as they can within the bounds 
of the law to make sure that all the applications are being 
handled and----
    Mr. Bass. Is it within their discretion to balance the--or 
to spread out the application process over the year a little 
better, or not?
    Mr. Verdery. I don't know. I would imagine that they have a 
first come, first serve requirement. Again, I know they hit the 
cap far in advance of the end of the fiscal year. But I know 
they are working the problem, but I don't think I can give you 
any specific recommendations to fix it.
    Mr. Bass. Thank you, Mr. Chairman.
    Mr. Stearns. Mr. Davis.
    Mr. Davis. Thank you, Mr. Chairman. Mr. Secretary, I want 
to briefly share with you an experience I had which, I think, 
is constructive and has a good ending.
    It was brought to my attention in my home in the Tampa Bay 
area that a gentleman on a flight--I think it was from New 
Zealand to Los Angeles--had a video tape of people sauntering 
in and out of the cockpit, enjoying the view and visiting with 
the very friendly pilots. This was aired on television and 
produced, as you can imagine, a pretty staunch outrage from 
Democrats and Republicans about why was this happening.
    The real outrage was the fact that this retired--I think he 
was a locomotive engineer--was calling the FAA, the TSA, and 
Homeland Security and was getting the run-around. Nobody knew 
who was in charge. It was government at its worst.
    I picked up the phone and called Asa Hutchinson, for whom I 
have high regard, and you may have already heard about this, 
and Asa, to his credit and who is very busy, looked at it, and 
the result was an emergency amendment to guidelines resulting 
in a rule or proposed rule that perhaps is in--hopefully, is in 
effect now that says any carrier flying over our air space has 
to have standards compatible to ours.
    So I guess I just want to underscore two things to you. I 
think it is incumbent on all of us that we have a system that 
empowers the public and does not shut them out. Ultimately, if 
it had not been for this retired locomotive engineer, this 
policy probably would not be in effect.
    Second, that we all resist the temptation to commit the 
unpardonable sin, which is to be defensively reactionary when 
people point out that we make mistakes every day, and there is 
always a way to do it better.
    So it is a positive experience I have. I think it is 
instructive for all of us, and I just wanted to share it with 
you.
    Mr. Verdery. Well, I appreciate that. As you know, I work 
for Under Secretary Hutchinson, who I know you served with up 
here, and I think he is very responsive to these types of 
things. I remember you raised this with him, and there was 
action taken to make sure the same standards apply for over-
flight carriers as carriers operating in the country.
    We have seen a number of incidents where we have had to 
do--fill in the gaps, so to speak, and this was one of them. 
But there's others where problems are brought to our attention, 
and TSA has stepped up to the plate to issue emergency 
amendments or other directives to fill those gaps.
    Again, I think it is a credit to the Under Secretary who 
took this one, and we appreciate you bringing it to our 
attention.
    Mr. Davis. Thank you, Mr. Chairman.
    Mr. Stearns. I thank my colleague, and I think we have no 
more questions for the first panel. I just would reiterate that 
Jacksonville is having the Superbowl next year, and we hope 
perhaps that Jacksonville might be one of the demonstration 
projects where we would have the expediting of travelers, 
trusted travelers, so to speak.
    Mr. Verdery. Late January, is it?
    Mr. Stearns. Yes.
    Mr. Verdery. I'll take a look at it, sir.
    Mr. Stearns. All right. Have a look at it.
    We will have the second panel come up. Thank you for your 
attendance. Mr. Fred Lounsberry, who is Senior Vice President, 
Universal Studios Recreational Group; Mr. Eric Pearson, Senior 
Vice President, E-Commerce, Intercontinental Hotels Group; Mr. 
Mark Brown, Executive Vice President, Association and Club 
Services, AA; Mr. Barry Allred who is Chairman of the 
Jacksonville Regional Chamber of Commerce, Jacksonville, 
Florida; and Ms. Patricia Friend, International President, 
Association of Flight Attendants--CWA.
    We want to welcome the second panel, and we would like to 
have each of your opening statement. Mr. Lounsberry, we will 
start with you, if that is possible. We will go from my left to 
my right.
    Welcome. Thank all of you for taking time from your 
important schedule to come here to testify.

  STATEMENTS OF FRED J. LOUNSBERRY, SENIOR VICE PRESIDENT OF 
SALES, UNIVERSAL STUDIOS RECREATION GROUP; ERIC PEARSON, SENIOR 
VICE PRESIDENT, E-COMMERCE, INTERCONTINENTAL HOTELS GROUP; MARK 
   H. BROWN, EXECUTIVE VICE PRESIDENT, ASSOCIATION AND CLUB 
 SERVICES, AAA; BARRY ALLRED, CHAIRMAN, JACKSONVILLE REGIONAL 
  CHAMBER OF COMMERCE; AND PATRICIA A. FRIEND, INTERNATIONAL 
        PRESIDENT, ASSOCIATION OF FLIGHT ATTENDANTS--CWA

    Mr. Lounsberry. Thank you. Mr. Chairman, Ranking Member 
Schakowsky of the subcommittee, thank you very much for the 
opportunity to present testimony this morning.
    I appear here today as the Senior Vice President of Sales 
for Universal Parks and Resorts and the past Chairman of the 
Travel Industry Association of America or TIA. Immediately 
after the horrible events of 9-11, I had the unique challenge 
and the honor to chair both TIA and Visit Florida, the 
partnership effort to market the chairman's great State to the 
world.
    What I experienced in those roles was a dedication by the 
travel industry and our government partners to ensure our 
industry kept reaching out to our international friends, while 
spreading the message that the welcome mat was still out, all 
of this in the context of the obvious need for heightened 
security in our country.
    I appear before you today to first thank and congratulate 
the House and Judiciary Chairman Sensenbrenner on the handling 
of one issue and urge your consideration in the near future on 
three others. House passage of a 1-year extension of the 
biometric passport requirements for Visa Waiver countries will 
ensure that visitors from 27 of our strongest allies will be 
able to enter this country in a way that enhances U.S. security 
and, at the same time, does not jeopardize the $80 billion in 
expenditures the international traveler is expected to bring to 
our shores in 2004, plus the millions of U.S. jobs this 
spending supports.
    One area that has unintentionally suffered during the 
country's need for increased homeland border security is the 
border crossing of school groups and educational scientific 
exchanges. Specifically, I would like to address the situation 
of Mexican grade and middle school aged children who, in a pre-
9-11 world were allowed to enter the United States under 
humanitarian waivers.
    I applaud Congressman Filner who has picked up the case of 
these children and filed H.R. 2525, the Visitors Interested in 
Strengthening America Act. All of us can remember taking school 
sponsored trips when we were younger. Imagine adding an 
additional $100 visa requirement, including the time and effort 
needed to obtain the document, to the cost of that trip. Now 
imagine this increased cost in areas where parents can't afford 
to take a day from work to obtain and prepare this 
nonrefundable application, not to mention the substantial 
additional expense.
    The United States, through the mandatory visa requirements, 
has literally stopped these exchanges with Mexican school 
districts. The school trips were multiple purposes. To the 
school children they represent the ability to better understand 
and respect the cultural differences and similarities with 
their neighbors to the north, while enjoying facilities that 
are not present in their own country.
    These experiences should be allowed to continue 
unencumbered. They will not only lead to stronger ties between 
our countries for generations to come, but in addition, 
destinations are able to make 1-day trips affordable for the 
children, while filling a much needed revenue gap during slow 
times that protects jobs as well.
    This was a perfect win/win scenario, mixing public policy 
and commerce prior to 9-11. We must once again work to allow 
these school children to visit the United States and not force 
them to become unintended victims of our necessary and well 
intentioned efforts to tighten border security.
    Our industry urges Congress to consider allowing these 
children to once again enter under humanitarian waivers or 
broaden existing classifications such as the F-1 or F-3. As 
with so many other matters, a judicial solution is possible if 
Congress and the Department of Homeland Security work together 
to jointly solve this issue.
    Mr. Chairman, I raise another issue critical to your own 
backyard of Orlando and many others around the country. 
Universal is concerned that Custom and Border protection 
inspector cutbacks have occurred since the three legacy 
agencies, Immigration, INS, Customs and Agriculture, have 
merged.
    I would submit in your record a correspondence describing 
the issue and reflecting Universal's point of view from Bob 
Gault, President of Universal Orlando, dated June 9, 2004, to 
the Honorable Robert C. Bonner, Commissioner of Customs and 
Border Protection at DHS.
    It is our understanding that, because legacy INS inspectors 
are automatically paid overtime for any Sundays or holidays 
they work, many districts have had to reduce staffing on other 
peak international rival days to meet their budget 
requirements. While the Department may be successfully meeting 
budget, we are leaving the valuable international visitors 
waiting in their planes until inspectors finally become 
available.
    The time to process these valued visitors can be as high as 
1\1/2\ hours, which does not include the time needed to clear 
additional screens by Customs and Agriculture.
    If this is a new budgeting reality in a post-9-11 DHS 
system, then Congress must allocate enough resources to 
appropriately staff to the need, and serve these important and 
valued visitors in a more efficient, timely manner, lest other 
competing world destinations will gain a competitive tourism 
advantage over the USA.
    Finally, the United States needs not only to be as traveler 
friendly as possible. It must aggressively market to the world 
that it is open for business. The message has been received 
loud and clear that our borders have become more secure. We now 
need to tell the legitimate business and leisure traveler that 
security has been achieved but not at the cost of their 
travels.
    Congress attempted to send this message through a $50 
million appropriation to market the country's heritage and 
splendor to the world and showcase American values, freedom and 
way of life to visitors from around the world. Unfortunately, 
that money was rescinded in the waning hours of last year's 
session before anyone could react.
    TIA and others must again work with you to once again 
reestablish this appropriation, so that we remain the leader in 
global tourism, drawing international visitors to our shores 
and protecting American jobs. The successful marketing efforts 
of Visit Florida, the public/private tourism marketing effort 
in my home state, can be looked to as a model for such a 
program.
    In closing, I am proud to report, our industry is in a 
recovery mode from the effects of 9-11, but we continue to face 
many challenges. Working together with your good offices, we 
can continue to grow our industry and take advantage of 
international opportunities that exist, all within the 
critically important context of enhanced security.
    Our joint success will keep our country safer, keep 
hundreds of thousands of Americans employed for decades to 
come, and permit us to continue to showcase America's way of 
life to visitors from around the world. Thank you.
    [The prepared statement of Fred J. Lounsberry follows:]

  Prepared Statement of Fred J. Lounsberry, Senior Vice President of 
                   Sales, Universal Parks and Resorts

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to present testimony this morning concerning the 
relationship between international commerce/tourism and homeland 
security. The balancing of these two issues by Congress and the tourism 
community at large has, and will continue to, play a pivotal role in 
the re-emergence of our national economy in a post 9-11 world.
    I appear here today as the Senior Vice President of Sales for 
Universal Studios Parks and Resorts. Immediately after the horrible 
events of 9-11, I had the unique challenge and the honor to chair both 
the Travel Industry Association of America (TIA) and Visit Florida--
Florida's public/private partnership effort to market the Chairman's 
great State to the world. What I witnessed in those roles was a 
dedication by the travel industry, and our government partners, to 
ensure our industry kept reaching out to our international friends 
while spreading the message that the welcome mat was still out. Members 
of Congress and representatives of the tourism community jointly 
informed the international traveler that America was still a welcoming 
harbor to cultures from all around the world . . . all of this in the 
context of the obvious need for heightened security in our county.
    We must not rest on our laurels after having weathered the initial 
storm. Instead we must look forward to strengthening our international 
opportunities while continuing to work toward an even safer America. To 
that end, I appear before you today to congratulate the House on its 
handling of one issue and urge your consideration in the near future on 
three others.
    The House of Representatives last week passed a one-year extension 
to the biometric passport requirements for Visa Waiver Country 
travelers. Judiciary Chairman Sensenbrenner, after conducting hearings 
on April 21st, wisely understood that while increased requirements to 
enhance border security are important, they must be implemented in a 
way that is technologically sound, administratively efficient and 
practical. The judicious compromise worked out by the Administration 
and this House, when passed by the Senate, will ensure that visitors 
from twenty-seven of our strongest allies will be able to enter this 
Country in a way that enhances U.S. security while remaining sensitive, 
inoffensive and respectful to the cultures from where they come. 
Placing these visitors into the U.S. Visit Program during the interim 
implementation of the biometric identifiers allows us the comfort of 
knowing the U.S. enjoys a more secure entry system than before. At the 
same time it does not jeopardize the $80 Billion in expenditures the 
International traveler is expected to bring to our shores in 2004 or 
the one million U.S. jobs this spending supports.
    One area that has unintentionally suffered under the country's need 
for increased homeland security is border crossings of school groups 
and educational/scientific exchanges. While I understand the University 
systems around the nation are focusing on the latter, it is my intent 
to discuss the issue of school children. Specifically the situation of 
Mexican grade and middle school age children who in a pre 9/11 world 
were allowed to enter the United States under humanitarian waivers. I 
applaud Congressman Bob Filner who has picked up the case of these 
children and filed H.R. 2525--The Visitors Interested in Strengthening 
America Act--2004 (VISA)
    All of us can remember taking school sponsored trips when we were 
younger. Those trips usually entailed going to local places of historic 
significance. Not surprisingly, many of those very trips were planned 
for right here in Washington, D.C. Imagine adding an additional $100 
visa requirement including the time and effort needed to obtain the 
document. Now imagine this increased cost in areas where the parents 
can't afford to take a day away from work to obtain and prepare this 
non-refundable application, not to mention the substantial additional 
expense. This new cost would have played an important part in the 
decision making of many school trips those of us in the room today were 
able to enjoy. This is exactly what we have now done to Mexican school 
children, who simply want to come across the border with their 
schoolmates to learn about our culture and people. These children, many 
from families barely making a minimum wage, save all year to join their 
classes on these annual trips. The United States, through the mandatory 
Visa requirements, has literally stopped these exchanges with the 
Mexican school districts.
    The school trips serve multiple purposes. To the Mexican school 
children, they represent the ability to better understand and respect 
the cultural differences and similarities with their neighbors to the 
North while enjoying facilities that are not present in their own 
country. These experiences should be allowed to continue unencumbered. 
They will only lead to stronger ties between our countries for 
generations to come. Another side of this issue relates to the zoos, 
museums and attractions, where these visiting children mean much-needed 
visitation during off peak attendance seasons. Through discounting 
programs, the destinations are able to make one-day trips affordable 
for the children while filling a much needed revenue gap during slow 
times that protects jobs as well.
    This was a perfect win-win scenario mixing public policy and 
commerce prior to 9/11. We must once again allow these school children 
to visit the United States and not force them to become unintended 
victims in our necessary and well intentioned efforts to tighten border 
security. We more than sympathize with INS and State who understand the 
dilemma Southern California, Texas and Arizona are experiencing, but do 
not have statutory authority to change or resolve. Our industry urges 
Congress to consider allowing these children to once again enter under 
Humanitarian waivers or broaden existing classifications such as the F-
1 (Canadian Part Time Students) or F-3 (Significant Public Interest). 
As with so many other matters, a judicious solution is possible if 
Congress and the Department of Homeland Security (DHS) work together to 
jointly solve this issue.
    Mr. Chairman, I raise up another issue critical to your own 
backyard of Orlando and many others around the country. Universal is 
concerned that Custom and Border Protection (CBP) inspector cutbacks 
have occurred since the three legacy agencies--Immigration (INS), 
Customs and Agriculture have merged. I submit for your record a 
correspondence describing the issue and reflecting Universal's point of 
view from Bob Gault--President of Universal Orlando dated June 9th, 
2004 to the Honorable Robert C. Bonner--Commissioner of Customs and 
Border Protection at DHS.
    It is our understanding that because Legacy INS inspectors are 
automatically paid overtime for any Sunday or holidays they work, many 
districts have had to reduce staffing on other peak international 
arrival days to meet their budget requirements. While the department 
may be successfully meeting budget, we are leaving the valuable 
international visitors waiting in their planes until inspectors finally 
become available. The time to process these valued visitors can be as 
high as one and a half hours, which does not include the time needed to 
clear additional screens by customs and agriculture. If this is a new 
budgeting reality in a post 9/11 DHS system, then Congress must 
allocate enough resources to appropriately staff to the need and serve 
these important and valued visitors in a more efficient , timely manner 
lest, other competing world destinations gain a competitive tourism 
advantage over the USA.
    Also, the United States needs not only to be as ``traveler 
friendly'' as possible but must aggressively market to the world of 
travelers that it is open for business. The message to the world has 
been received loud and clear that our borders have become more secure. 
We now need to tell the legitimate business and leisure traveler that 
security has been achieved, but not at the cost of their travels. 
Congress attempted to send this message through a $50 million 
appropriation forming a public/private partnership on the Federal level 
to market the Country's heritage and splendor to the world. 
Unfortunately that money was rescinded in the waning hours of last 
year's session before anyone could react. The Travel Industry 
Association, Travel Business Roundtable and others must work with you 
to once again re-establish this appropriation, so we remain the leader 
in global tourism drawing international visitors to our shores and 
protecting American jobs. The successful marketing efforts of Visit 
Florida, the public/private tourism marketing effort in my home state 
can be looked to as a model for this much needed US federal tourism 
marketing initiative.
    In closing, I am proud to report our industry is in a recovery mode 
from the effects of 9/11 but, we continue to face many challenges. 
Working together with your good offices, we can continue to grow our 
industry and take advantage of international opportunities that exist . 
. . all within the critically important context on enhanced security. 
Our joint success will keep our country safer, keep hundreds of 
thousands of Americans employed for decades to come and permit us to 
continue to showcase America's freedom and democracy to visitors from 
around the world.

    Mr. Stearns. Thank the gentleman.
    Mr. Pearson, welcome.

                    STATEMENT OF ERIC PEARSON

    Mr. Pearson. Good morning, Chairman Stearns, Ranking Member 
Schakowsky, and members of the subcommittee. I am Eric Pearson, 
and Senior Vice President of E-Commerce for Intercontinental 
Hotels Group, which is the world's largest and most global 
hotel company, doing business in nearly 100 countries.
    I first want to thank you for the opportunity to be here 
today to present a hotel industry perspective on tourism in the 
United States post-9-11. In addition to representing 
Intercontinental Hotels Group, I am also a frequent business 
traveler. I have spent a significant amount of time traveling, 
especially overseas, being part of a global hotel company.
    Now notwithstanding time away from family, it has been a 
rewarding experience to travel around the world conducting 
business while learning different cultures. It does, however, 
come with increased concerns about the safety of our borders, 
our airways, and ports of entry, which appears to be never 
ending for terrorists.
    It should come as no surprise that the United States 
receives tremendous economic benefit from travel and tourism 
and, according to a report by the World Travel and Tourism 
Council, this year the industry, both directly and indirectly, 
will account for nearly 17 million jobs and $1.2 trillion in 
gross domestic product.
    International travel alone is one of the largest exports of 
the United States and the largest services sector export 
category. These international travelers spend more and stay 
longer than our domestic travelers, and generated over $13 
billion in tax revenue last year.
    Unfortunately, these travelers are declining and, for every 
1 percent drop in international arrivals, we lose 173,000 jobs 
and $1.2 billion in tax revenue. Over the pat years, we have 
seen the results of tax revenue losses, which negatively impact 
our schools, our police and fire departments and, yes, 
ultimately apply pressure to raise other taxes to offset budget 
deficits across the Nation.
    These tax shortfalls are further impacted by the 
promulgation of new business practices employed by travel 
websites putting additional pressure on the various tax 
authorities.
    At IHG our current trading and business is steadily 
improving, and we are experiencing an encouraging recovery in 
North America and abroad. This is driven by strong leisure 
demand, which has outpaced the recovery of business travel 
which derives a higher rate of business.
    D.K. Shifflet & Associates, the leading travel research 
firm, suggests that business traveler recovery should begin 
late in 2004. All of this recovery, all of it, requires and 
assumes no negative impact, should airport delays increase or, 
worse, new terrorist activities occur, creating greater fear 
and uncertainty amongst our travelers.
    Clearly, we all share a common goal of keeping our citizens 
and visitors safe as they travel around the country. In the 
wake of 9-11 we have been challenged to device innovative ways 
to address the Nation's security concerns without compromising 
the ability of legitimate foreign travelers to enter and exit 
our borders, described recently in May by Secretary of State 
Colin Powell as the secure borders' open doors policy.
    Now keeping our borders secure while at the same time 
keeping our doors open to foreign visitors can certainly be 
viewed as conflicting goals. Nonetheless, both are fundamental 
to preserving the freedom and strength that defines America.
    I would like to take a few moments this morning to examine 
how various U.S. policies, initiatives are affecting this 
delicate balance between security and openness. In terms of the 
Visa Waiver Program, IHG is concerned about the impending 
October 26, 2004, deadline for travelers from Visa Waiver 
Program countries to present passports containing biometric 
identifiers in order to gain entry into the United States.
    We believe incorporating biometric technologies into 
passports is an effective and efficient way to strengthen 
security at our Nation's borders without impacting travelers. 
However, these nations must be given sufficient time to develop 
and implement these new technologies.
    We commend the U.S. House of Representatives for 
recognizing this necessity in passing H.R. 4417, which provides 
a 1-year extension. We do urge Congress to act quickly and send 
legislation to the President that will give these countries 
sufficient time to comply with passport requirements. of 
course, failure to do so will create uncertainty, backlogs and 
delays that will have the effect of driving legitimate foreign 
visitors away.
    The US VISIT provides the ability to screen travelers in 
order to assure dangerous criminals and suspected criminals do 
not illegally enter the United States, which is a key component 
in keeping our country safe from terrorists.
    The program, which requires international visitors to 
provide digital photographs and finger scans upon entry into 
the United States, appears to be achieving its purpose without 
significant delays in the entry process. We know, however, that 
the enrollment of an estimate 13 million additional travelers 
this fall, when the Visa Waiver Program travelers are added to 
the program, could provide a challenge to the ability of the 
system to function efficiently and accurately.
    A further challenge looms on December 31, 2004, the 
deadline to integrate US VISIT procedures at the 50 busiest 
land ports of entry. We encourage the Congress and the 
administration to take all steps necessary to ensure that our 
land borders are adequately staffed and have the tools needed 
to accurately screen foreign visitors in a timely fashion.
    As I am sure this committee is aware, hotels are 
particularly vulnerable to terrorist threats. The ability to 
ensure against those risks are key to the economic viability of 
our industry. We, therefore, were extremely pleased to learn 
last week that the Treasury Department has extended a provision 
of the Terrorism Risk Assurance Act requiring commercial 
property and casualty insurers to offer terrorism coverage.
    The provision extends for an additional year through 2005 a 
requirement that insurers offer terrorism coverage on 
commercial policies. Treasury Secretary Snow's decision to act 
now rather than wait until the September 1, 2004, statutory 
deadline provides greater certainty and less market disruption 
in the terrorism insurer's market. However, it is equally 
important that Congress take action to reauthorize and extend 
this initiative beyond 2005.
    The proposed Registered Traveler pilot program is really a 
good example of deploying innovative products and services to 
ensure new policies designed to protect the public don't 
negatively impact domestic travelers. As a Nation, we are 
accustomed to programs that offer convenience and time savings, 
even at additional cost.
    As such, the program will be welcomed by travelers who want 
hassle free travel and, hopefully, promote future business with 
them. We support this initiative and its expedited screening 
process and reduce the wait time for travelers without 
compromising security.
    In closing, as multiple committees of Congress and Federal 
departments and agencies work to enact policies and procedures 
designed to protect the United States from future terrorism 
threats, harmonization of what can often be perceived as 
duplicative or conflicting requirements imposed upon the 
tourist industry and the traveling public must continue to be a 
priority.
    We commend the subcommittee and the Congress for its 
efforts to date, and we look forward to continuing to work with 
you to identify ways to protect our country from further 
terrorist attacks while keeping our doors open to foreign 
visitors and their significant contribution to our economy.
    As I mentioned in my opening remarks, traveling has been a 
rewarding experience. Let us ensure that we don't discourage 
legitimate travelers, both domestic and international, from 
experiencing this great country. Thank you.
    [The prepared statement of Eric Pearson follows:]

Prepared Statement of Eric Pearson, Senior Vice President, E-Commerce, 
                     InterContinental Hotels Group

    Chairman Stearns, Ranking Member Schakowsky and Members of the 
Subcommittee, I am Eric Pearson, Senior Vice President, E-Commerce, for 
InterContinental Hotels Group (IHG), the world's largest and most 
global hotel company doing business in nearly 100 countries. As you may 
already know, we are actively involved in several industry 
organizations focused on advancing travel and tourism including the 
Travel Business Roundtable and the World Travel & Tourism Council.
    I want to thank you for this opportunity to provide a hotel-
industry perspective on tourism in the United States in a post 9/11 
world. In addition to representing InterContinental Hotels Group, I'm 
also here as a frequent traveler who spends a significant amount of 
time traveling, especially overseas, being part of a global company. 
Notwithstanding time away from family, it has been a rewarding 
experience to travel around the world conducting business while 
learning different cultures. It does, however, come with increased 
concerns about the safety of our borders, airways, and ports of entry 
which continue to be targeted as entry points for potential terrorists.

Travel & Tourism Economic Impact
    It should come as no surprise that the United States receives 
tremendous economic benefit from travel & tourism. According to a 
report by the World Travel & Tourism Council, this year the industry 
both directly and indirectly will account for nearly 17 million jobs, 
roughly 12% of total employment, and $1.2 trillion in Gross Domestic 
Product, roughly 11% of total GDP. International travel alone is one of 
the largest ``exports'' for the U.S. and the largest services sector 
export category favorably impacting our balance of trade. These 
travelers spend more and stay longer than our domestic travelers and 
generated over $13 billion in tax revenues last year. Unfortunately, 
these travelers are declining as a direct result of post 9-11 concerns 
coupled with confusion about our security policies going forward. For 
every 1 percent drop in international arrivals, we lose 173,000 jobs 
and $1.2 billion in tax revenue.
    Over the past few years, we've also seen the results of lost local 
and state tax revenue which negatively impacts our schools, police and 
fire departments, and ultimately applies pressure to raise other taxes 
to offset budget deficits across the nation. These tax shortfalls are 
further impacted by the promulgation of new business practices 
aggressively employed by travel websites in the wake of 9-11 putting 
additional pressure on the various tax authorities. Efforts by state 
officials in Massachusetts, Florida and prospectively by others to 
collect their proper share of taxes adds more confusion to the mix.

Current Trading
    At IHG, our business has been steadily improving in the past year 
and we are experiencing an encouraging recovery in both North America 
and the UK. We are also seeing tentative signs of the beginning of a 
recovery in Europe and trading in Asia Pacific has returned to pre-SARS 
levels. Growth remains occupancy driven in all regions with early 
evidence of potential rate recovery in some US markets and London. This 
is driven by strong leisure demand which has outpaced the recovery of 
business travel. As we know, it is the business traveler that drives 
higher rated business. D.K. Shifflet & Associates, a leading travel 
research firm, suggests that business travel recovery should begin late 
in 2004. This is good news for the hotel industry given the 80+ million 
room night shortfall last year over 2001. All of this recovery, of 
course, assumes no negative changes in travel behaviors resulting from 
increased delays at airports, or worse, new terrorist activities, 
creating greater fear and uncertainty among consumers and businesses.
    Clearly, we all share a common goal of keeping our citizens and 
visitors safe as they travel about the country. In the wake of the 
September 11, 2001, we have been challenged to devise innovative ways 
to address the nation's security concerns without compromising the 
ability of legitimate foreign travelers to enter and exit our borders. 
It is what Secretary of State Colin Powell described in a May 12th 
address to the U.S. Chamber/Travel Business Roundtable Travel and 
Tourism Summit as the Department's ``Secure Borders/Open Doors'' 
policy.
    Keeping our borders secure while at the same time keeping our doors 
open to foreign visitors might be viewed by some as conflicting goals. 
Nonetheless, both are fundamental to preserving the freedom and 
strength that defines America. I would like to take a few moments this 
morning to examine how various U.S. policies and initiatives are 
affecting this delicate balance between security and openness.

Visa Waiver Program
    IHG is concerned about the impending October 26, 2004, deadline for 
travelers from Visa Waiver Program (VWP) countries to present passports 
containing biometric identifiers in order to gain entry to the United 
States. We believe incorporating biometric technologies into passports 
can be an effective and efficient way to strengthen security at our 
nations' borders without impacting travelers. However, VWP nations must 
be given sufficient time to develop and implement these new 
technologies. IHG commends the U.S. House of Representatives for 
recognizing this necessity in passing H.R. 4417, which provides a one-
year extension of the deadline to October 26, 2005. We understand that 
the Senate is considering similar legislation to extend the deadline. 
We urge Congress to act quickly to send legislation to the President 
that will give VWP countries sufficient time to comply with the 
biometric passport requirements. Failure to do so will create 
uncertainty, backlogs and delays that will have the effect of driving 
legitimate foreign visitors away.

US-VISIT
    The ability to screen travelers in order to assure that dangerous 
entities or suspected criminals do not illegally enter the United 
States is a key component in keeping our country safe from terrorists. 
Indeed, the Department of Homeland Security reports that the US-VISIT 
program has stopped almost 200 criminals or suspected criminals from 
entering the United States since the initial phase was implemented in 
January at 115 airports and 14 seaports. The program, which requires 
international visitors to provide digital photographs and finger scans 
upon entry to the United States, appears to be achieving its purpose 
without significant delays in the entry process. We note, however, that 
the enrollment of an estimated 13 million additional travelers this 
fall when VWP travelers are added to the program could provide a 
challenge to the ability of the system to function efficiently and 
accurately. A further challenge looms in the December 31, 2004, 
deadline to integrate US-VISIT procedures at the 50 busiest land ports 
of entry. We encourage the Congress and the Administration to takes all 
steps necessary to assure that our land borders are adequately staffed 
and have the tools needed to accurately screen foreign visitors in a 
timely fashion. Finally, we note that the exit component of US-VISIT is 
still a work-in-progress. Our industry looks forward to working with 
the Subcommittee and DHS to assure that US-VISIT exit procedures are 
both efficient and effective.

Terrorism Risk Insurance Act (TRIA)
    As I'm sure this Subcommittee is aware, hotels are particularly 
vulnerable to terrorist threats. The ability to insure against those 
risks is key to the economic viability of our industry. We therefore 
were extremely pleased to learn last week that the Treasury Department 
has extended a provision of the Terrorism Risk Insurance Act requiring 
commercial property and casualty insurers to offer terrorism coverage. 
The provision extends for an additional year, through 2005, a 
requirement that insurers offer terrorism coverage on commercial 
policies. Treasury Secretary Snow's decision to act now, rather than 
waiting until the September 1, 2004 statutory deadline, provides 
greater certainty and less market disruption in the terrorism insurance 
market.
    However, it is also important for Congress to take action to 
reauthorize and extend this initiative. It is my understanding that 
today, Congressman Richard Baker (R-LA) and others will introduce a 
bill to do just that. We encourage you and your colleagues to promptly 
engage in the review necessary to consider and approve such an 
initiative.

Registered Traveler
    The proposed Registered Traveler pilot program is a good example of 
deploying innovative products and services to ensure new policies 
designed to protect the public don't negatively impact the domestic 
travelers. As a nation, we are accustomed to programs that offer 
convenience and time savings even with an additional cost. These 
include toll roads and electronic passes, convenient stores, and even 
express passes at theme parks to reduce waiting in lines. As such, this 
program will be welcomed by travelers who want hassle free travel and 
hopefully promote future business with them. IHG supports this 
initiative as it expedites the screening process and reduces the wait 
times for travelers without compromising security.

Other Issues
    These and other issues are addressed at length in written testimony 
presented to this Subcommittee by the Travel Business Roundtable. IHG 
is an active member of the TBR, serves on its Executive Committee and 
supports its views on Homeland Security issues. We recommend TBR's 
testimony to the Subcommittee, and encourage you to tap TBR's 
significant source of knowledge and information on travel and tourism 
issues if they can be of service in any way.

Conclusion
    As multiple committees of Congress and federal departments and 
agencies work to enact policies and procedures designed to protect the 
United States from future terrorist threats, harmonization of what can 
often be duplicative or conflicting requirements imposed upon the 
tourism industry and the traveling public must continue to be a 
priority. We commend this Subcommittee and the Congress for its efforts 
to-date, and we look forward to continuing to work with you to identify 
ways to protect our country from further terrorist attacks while 
keeping our doors open to foreign visitors and their significant 
contributions to our economy.
    Thank you for the opportunity to present these remarks. I would be 
happy to answer any questions you may have.

    Mr. Stearns. I thank the gentleman.
    Mr. Brown, welcome.

                   STATEMENT OF MARK H. BROWN

    Mr. Brown. Thank you, Mr. Chairman and committee members. 
On behalf of AAA, we appreciate the opportunity to testify 
today. I am Mark Brown. I am Executive Vice President of AAA. I 
am based down in Florida. We work throughout the United States 
and also work very closely with the AIT and FIA, foreign 
motoring organizations.
    AAA Travel is one of the largest leisure travel agency 
organizations in the United States, with over 1,000 locations, 
and we do about $3 billion in leisure sales. We believe AAA 
provides a unique perspective on the impact of security 
procedures and what they have had on both travel and tourism.
    We are, first and foremost, of course, a membership 
organization representing and serving over 47 million members 
throughout North America. Over the years, we like to think that 
we have been a leader, an advocate for safety, security and 
mobility of travelers.
    Mr. Chairman, Americans today continually reassess how, 
when and where they travel. The good news is that Americans are 
traveling again in record numbers. In the first 4 months of the 
year alone, AAA sales, as you already noted, are up about 25 
percent. TIA's and AAA's projections for July 4 holiday travel 
support that. Nearly 40 million people are expected to take a 
trip more than 50 miles away from home.
    AAA recently surveyed a random sample of U.S. adults. We 
asked their opinions about how recent safety and security 
measures have affected their travel habits. We found that 
security concerns and safety measures have not caused most 
people to change their patterns.
    Sixty-four percent of respondents said that they have made 
no changes due to security concerns, and only--only 8 percent 
said that they would specifically avoid air travel. 
Interestingly, when we asked more about air travel security, we 
found that 80 percent of the travelers were confident about 
today's airport and in-flight security systems, while about 11 
percent were not entirely confident.
    Overall confidence in security measures related to all 
forms of travel, be it car, train, automobile, to places like 
amusement parks, taking cruises, etcetera, was even higher, 
with 91 percent of those surveyed confident in today's current 
security measures.
    We have about 36,000 employees with AAA, many of whom are 
travel counselors and travel agents, and they have the front 
line impact with customers. They tell us that security related 
questions really take five forms from the customers. Customers 
want to know how much time they should allow for check-in, 
which we talked about this morning, and it varies a great deal; 
what items can and cannot be packed in a carry-on bag--there 
seems to be discrepancies in that area; how can we keep bags 
secure without locks--that is a tough one to answer; what are 
the requirements for personal identification--each airline site 
and the State Department have different things written up; and 
finally, what destinations should be avoided due to security 
concerns.
    There does not appear to be a great deal of anxiety over 
the cruise industry travel, because, frankly, the cruise 
industry has done a pretty good job of putting safety 
procedures in place and have been following them for a number 
of years.
    When it comes to overall security, our agents tell us 
generally that travelers do not question the need for strong 
security measures, and travelers will endure a certain level of 
hassle. The traveling public is paying more than ever for 
security through fees on airline tickets and through use of 
their tax dollars.
    As a result, the travelers really deserve a system that not 
only provides the security they want but also a high level of 
service as well, and these things, Mr. Chair and committee 
members, should not be mutually exclusive.
    In a competitive service environment, if we don't meet the 
customer expectations, as we all know, they go elsewhere. Well, 
in the travel industry there is another kind of competitor, and 
that competitor is called not traveling at all. That could mean 
billions of tourism dollars, both from inbound tourists and 
also for domestic tourists.
    We recognize and applaud the extraordinary efforts that 
have really taken place since 9-11 and where we are at today. 
However, AAA suggests the following improvements that would 
ease traveler anxiety and increase the efficiency of providing 
safe and secure travel.
    First, more should be done to resolve the numerous 
complaints about inconsistencies and unpredictability 
experienced at various airports around the country. Second, 
when security procedures bog down, TSA officials must exercise 
more flexibility to act quickly and open new lines and move 
passengers around airports and have personnel available to 
inform the customer what is going on.
    Third, TSA should have the ability to move resources, maybe 
nose counts, from less congested airports to airports 
experiencing higher than normal congestion. This can vary by 
season.
    Finally, the Department of Homeland Security should have a 
process in place to continually monitor consumer attitudes 
about the effectiveness and the efficiency of safety measures. 
All of us travel extensively. How many of us have been actually 
asked about our experiences as we go through security?
    Mr. Chairman, there is a--and committee members, there is 
an inherent tension between, on the one hand, fail safe 
security and, on the other hand, this thing we call freedom of 
mobility. Security experts continually look at and reevaluate 
the threats that we have for security, and they adjust 
accordingly. So, too, we shouldn't forget about the customer 
satisfaction in the desire to provide the very best security 
that we can provide. We think that, with communication, 
consistency, and basic care for the customer, this could 
certainly be accomplished.
    Thank you for the opportunity to comment.
    [The prepared statement of Mark H. Brown follows:]

    Prepared Statement of Mark H. Brown, Executive Vice President, 
                    Association & Club Services, AAA

                              INTRODUCTION

    On behalf of AAA, thank you for the opportunity to testify today. 
My name is Mark Brown, and I am AAA's Executive Vice President for 
Association and Club Services. In that capacity, I oversee travel 
operations at AAA's National Office in Orlando and am responsible for 
implementing the overall strategic direction for AAA's travel agency 
operations.
    AAA provides a unique perspective on the impact security procedures 
have on travel and tourism. We are--first and foremost--a membership 
organization and we strive to represent the best interests of our 
members, who are the traveling public. We also are a major provider of 
travel services.
    By way of background, AAA is a not-for-profit, fully tax-paying 
federation of 76 clubs across the United States and Canada. 
Collectively, AAA Travel is one of the largest leisure travel agencies 
in the United States with more than 1,000 travel agency locations and 
annual sales of over $3 billion. As North America's largest leisure 
travel organization, AAA and our counterpart in Canada (CAA) provide 
travel, insurance, financial and automotive-related services to over 47 
million members. Since its founding in 1902, AAA also has been a leader 
and advocate for the safety, security and mobility of all travelers.

                    CURRENT STATE OF TRAVEL/TOURISM

    The travel and tourism landscape has changed dramatically since the 
tragic events of September 11, 2001. The specter of terrorism worldwide 
has forced many Americans to reassess how, where and when they travel. 
The good news is Americans are traveling again, and in record numbers. 
In the first four months of this year alone, AAA Travel sales have 
jumped 23 percent over last year, and we are closing in on pre-9/11 
sales volumes. Our projections for the July 4th holiday support that 
trend, with nearly 40 million Americans expected to travel 50 miles or 
more from home for the holiday--a record number, up 3.4 percent from 
last year.
    People are certainly hitting the road in record numbers. Overall, 
the number of TripTiks AAA provided to members increased 6.7 percent 
from 2002 to 2003. First quarter 2004 numbers compared to first quarter 
2003 are up 20 percent.
    There are a number of factors that impact travel and tourism. 
Safety and security issues are among them. To determine just how 
significantly those factors affect travel, and to gauge consumer 
confidence in the nation's travel security systems, AAA recently 
surveyed more than 1,000 U.S. adults, soliciting their opinions on how 
recent safety and security measures have affected their travel habits.
    We found that security concerns and safety measures have not caused 
most people to change their travel habits. Sixty-four percent of 
respondents said they have made no changes due to security. Only eight 
percent said they avoid air travel, while five percent said they travel 
less often, and a small percentage of others said they plan more 
driving trips and stay closer to home.
    We asked specifically about airport security and found that 40 
percent of respondents were either extremely confident or very 
confident in today's airport and in-flight security systems. Another 40 
percent were somewhat confident. On the broader question of overall 
confidence in security measures relating to all forms of travel--by 
car, train and plane to resorts, cruises, amusement parks, and so 
forth--confidence was even higher. Fifty-five percent were very or 
extremely confident, and another 36 percent somewhat confident.Travel 
Agent Perspective
    As I said earlier, AAA clubs have more than 1,000 travel agency 
offices throughout the U.S. and Canada. Our agents routinely field 
questions and concerns from customers as they book their travel 
reservations and plan drive trips.
    Travelers' security-related questions most often relate to air 
travel, although we also receive questions and complaints about border 
crossing delays and security requirements. Mainly, travelers want to 
know how much time to allow for check-in procedures at airports, what 
items can and cannot be packed in carry-on luggage, how to keep bags 
secure without locks, and what are the requirements for personal 
identification.
    Our agents tell us that travelers want thorough security and, in 
general, will endure a certain level of security ``hassle'' in the 
interest of safety. Most travelers understand the need for increased 
security and are becoming accustomed to the new procedures. However, 
our agents receive frequent complaints about long lines and the 
unpredictability of wait times at airports. Consumers complain about 
lack of privacy and are concerned that items in unlocked bags could be 
lost or stolen. They also are frustrated with the inconsistencies in 
security procedures from one airport to the next.
    There does not appear to be anxiety over cruise travel because the 
cruise industry has done a good job of promoting the safety of 
cruising. Cruise clients are used to the normal strict identification 
procedures for entering and exiting a ship prior to sailing or during 
ports of call. The additional screening procedures implemented by the 
cruise industry do not seem to have caused passengers undue 
inconvenience. And, there's also the presence of the Coast Guard to 
help passengers feel secure.
    Members also ask our travel agents about the overall security of 
specific destinations, and ask what destinations to avoid due to 
security concerns. AAA travel agents provide a wide variety of 
information to our members and customers to address these questions and 
concerns. Agents provide access to State Department travel warnings, 
Consular Information Sheets, FAA information, handouts from the 
Transportation Security Administration and information from airlines, 
tour companies and cruise lines. Most AAA club web sites link to these 
resources as well. Some clubs also host security seminars that include 
security information handouts or presentations by TSA representatives, 
airport managers, FBI officials and local police.
    In addition to agent interaction, AAA issues local and national 
press releases and other public advisories with tips for safe and 
hassle-free travel. Many clubs include security-related articles in 
their member publications, which collectively have a circulation of 
about 30 million households.
    Travelers generally do not question the need for current security 
measures, but many do question the lack of consistency and efficiency. 
Early TSA goals of ``world-class security and world-class customer 
service'' have not yet been achieved. The traveling public is paying 
more than ever for security through their security fees on airline 
tickets and their tax dollars. They also pay through time spent waiting 
in lines at airports, at border crossings with Canada and Mexico, at 
parks, at museums, and other places with security check points.
    When the TSA was being formed, some stars of the service economy 
loaned senior managers to the government to help rapidly build this 
sprawling, customer-intimate organization. This customer focus must 
remain and spread across other government security contacts with 
travelers, with processes continually being evaluated and improved for 
the average traveler.
    Travelers deserve an efficient system that not only provides 
security, but a high level of customer service. World-class customer 
service and security must go hand-in-hand. They are not mutually 
exclusive objectives.
    Customer service is about more than just polite, well-dressed 
employees. World class customer service is about designing systems 
where customers' high expectations are met. Sufficient staffing is 
certainly a part of this--ensuring that there are enough employees to 
handle the volume of customers at peak times.
    At AAA, we ``mystery shop'' our travel agents. This is common 
across the service business. The GAO does some of this within the 
federal government, but it's with the intention of trying to 
``penetrate'' security. What about checking the experience of the 
overwhelming majority of travelers who simply pass through security 
because they want to look at the Liberty Bell, tour the Smithsonian, 
meet their Congressman, or fly to see their grandchildren?
    Customers are inseparable from the service experience. Fortunately, 
customers can be taught to contribute to making that experience better. 
Providing clear signage and instructive announcements about security 
procedures to customers before they reach security checkpoints can 
prepare customers to help make the process smoother for everyone.
    In a competitive service environment, if we don't meet customers' 
expectations, they go elsewhere--other hotels, other travel agents, 
other banks, other auto mechanics. In the travel industry, there is 
another kind of competitor--not traveling. For international travelers, 
that means not coming to the United States to spend billions of dollars 
annually. For domestic travelers, that means not going to parks, not 
flying, not staying in hotels--again, with billions of dollars in 
economic impact. Fortunately, we're not at that point. People are still 
traveling. It is important that we meet their expectations of safety 
and security with minimal hassle.

                            RECOMMENDATIONS

    Based on input from our members and travel agency personnel, AAA 
suggests the following improvements that would ease traveler anxiety 
and increase the efficiency of providing a safe and secure travel 
environment.
    1. More can and should be done to make security procedures seamless 
and predictable. When the legislation creating the Transportation 
Security Administration was debated three years ago, AAA stressed the 
importance of consistency and uniformity. We understood that the task 
would not be completed overnight. We recognize the Herculean efforts 
that have been made to get us where we are today. However, we hear more 
complaints about inconsistency and unpredictability than most anything 
else.
    2. On-site information and better communication can go a long way 
toward alleviating customers' concerns. When security procedures bog 
down, TSA officials must exercise flexibility to act quickly to open 
new security lines, move passengers to other less congested security 
points in the airport, and, above all, have personnel available to 
inform passengers what to expect.
    3. Hand in hand with the above, TSA should have the ability to move 
its own personnel from less congested airports and areas of the country 
to airports experiencing higher than normal congestion at peak periods. 
There should be checks and balances in place to ensure that enough of 
the right personnel are at the right place at the right time. That 
includes personnel trained to anticipate any emergency.
    4. The Department of Homeland Security should have processes in 
place to continually monitor consumer attitudes about the effectiveness 
and efficiency of security measures. This applies to all places that 
security touches travelers--airports, ports, border crossings, national 
parks, museums, etc.

                               CONCLUSION

    In summary, AAA's message to you today is that the American 
traveling public is resilient. They love to travel and will adapt to 
reasonable measures that enhance their safety. There's an inherent 
tension between failsafe security and free mobility. Security experts 
continually reevaluate threats and adjust security measures 
accordingly. So, too, must they evaluate the customer side of the 
security process. Travelers deserve the most efficient, thorough system 
possible to ensure safety. With communication, consistency and caring 
for the customer, this can be accomplished.

    Mr. Stearns. Thank you.
    Welcome, Mr. Allred.

                    STATEMENT OF BARRY ALLRED

    Mr. Allred. Thank you, Mr. Chairman. Thank you for those 
kind introductory remarks you gave me in your opening 
statement, and you will hear in my testimony today an 
affirmation of some of your comments about Jacksonville.
    Members of the committee, my name is Barry Allred, and I am 
currently the volunteer Chair of the Jacksonville Regional 
Chamber of Commerce. I am very pleased to have the opportunity 
today to share our views with you concerning where we have 
been, where we are, and where we are going with a particular 
focus on the area of northeast Florida, including Jacksonville, 
and to some degree, a reflection of the State of Florida as a 
whole and the Nation.
    The Jacksonville Regional Chamber of Commerce has over 
4,000 member companies, representing a variety of businesses, 
of which 90 percent are small businesses. Our community is not 
overly skewed toward tourism and, because of that, we may 
represent a more balanced view of the overall economy today.
    Jacksonville is located in northeast Florida, touching the 
Atlantic Ocean on the east, with a downtown area 15 miles along 
the St. John's River. We are blessed with many natural assets, 
including the Intercoastal Waterway, beautiful marshlands, and 
large forested areas unlike anything you might expect elsewhere 
in Florida.
    Jacksonville is, first and foremost, a business city that 
has been named the hottest market in the United States for 
expansion and location of businesses by Expansion Management 
Magazine three of the last 6 years. Our strategic location 
provides great accessibility for tourist opportunities in the 
southeastern United States, and at the same time provides an 
outstanding business location for the development and 
distribution of products and services.
    The attacks of 9-11 jolted the Jacksonville area very much 
like every other part of the United States. Our companies were 
looking for answers and trying to decide whether to pull back 
or accelerate in the aftermath of this terrible event.
    Tourism was, in fact, the first and most severe industry 
impacted, as people were traumatized by the events and 
uncertain about flying or travel after the attacks. Our Chamber 
of Commerce held a series of meetings to discuss the issues of 
operating a company in an uncertain environment and managing 
risk while moving forward with your business.
    The response was very strong and very positive, and our 
small business on the whole chose to take a more aggressive 
position rather than retrench in the face of great uncertainty, 
if not danger.
    On the tourism side, the most immediate impact was the 
reduction of air travel to various destinations. Our approach, 
through our Convention and Visitors Bureau, was to analyze our 
market opportunities and begin to encourage a larger ``drive 
market'' for people in the southeastern United States to 
vacation closer to home and without air travel.
    Following a difficult fourth quarter in 2001, the new 
strategy began to work, and business has been rebounding for 
the past 2 years. Although we are not yet ahead of previous 
levels from the year 2000, we expect to be at or above those 
levels by the fourth quarter of this year.
    Air service and corresponding tourism travel have also 
returned to normal levels of activity. We do believe people 
still have concerns about flying. However, most of those 
concerns have been allayed.
    We believe that Jacksonville is fairly representative of 
those markets that were able to utilize a ``drive market'' 
strategy to recovery more quickly, and it seems most locations 
in Florida as a whole, and in the United States, have had a 
relatively strong rebound and are nearing more normal levels on 
the tourism front.
    A week ago, I completed the development mission in four 
European countries and met with about 25 companies. The only 
negative issue encountered concerning the United States was the 
great difficulty with passport and visa issuance under a post-
9-11 system. We were told that it was discouraging both 
business and pleasure visits to the United States.
    I am no expert in this process, but I would hope security 
needs of the United States and the need to expedite document 
processing can both be addressed. It will make our friends more 
comfortable and interested in travel in the United States.
    I also believe that Congress should consider financing 
support to marketing efforts, especially in Europe, which 
encourages U.S. travel along with developing smooth document 
processing approach and a user friendly explanation of that 
process. This could greatly increase the flow of money to the 
United States and help our economy. I realize that this is a 
delicate balance between security and access, but it is a very 
important one.
    Another piece of evidence of our recovery is Jacksonville's 
new cruise ship business. Prior to 9-11, no cruise ship served 
north of Cape Canaveral in Florida. After 9-11 Jacksonville 
became an attractive market and is now served by two cruise 
ship lines, because people prefer to drive to a cruise rather 
than to fly. Our new cruise service has been very successful.
    What has changed for Jacksonville and any location hosting 
major events is the substantially increased cost of dealing 
with security. Next February, as the chairman mentioned 
earlier, Jacksonville will host the Superbowl, and in doing so 
we will bring over 100,000 people to our city during the week 
of the game.
    The process of hosting large numbers of people carries with 
it a very large price tag, one that goes beyond the capability 
of the community or even the State to be able to handle. These 
security issues are not related to any specific community or to 
any State, but instead they are national issues associated with 
our democracy and our international relations.
    That being said, I encourage you to consider greater 
support at the Federal level for communities dealing with 
security for major national events.
    A strategic issue that you as the Congress must wrestle 
with is the balance between security and reasonable comfort for 
travelers. As a Nation, we have agreed that we will not allow 
terrorism to disrupt our lives, and we will move forward, 
despite efforts to keep us from doing so.
    This means that we must be ever mindful of security 
requirements to make air and other forms of travel as safe as 
is reasonably possible. At the same time, we have to balance 
those needs for security with a level of reason that encourages 
people to be willing to utilize the efficient forms of mass 
transportation.
    Striking that balance between reasonable, effective 
security and effective and efficient operations is an important 
and difficult responsibility for you, as you establish 
regulations through the governmental process. We urge you to 
listen to the experts from both sides, those advocating the 
best and most efficient security and those representing the 
travel and tourism industry, making the clearest judgments 
possible on the tolerance levels of our traveling public.
    In the broader economy of Jacksonville and Florida, we have 
had significant success in our overall growth and development. 
Florida has managed to add jobs every month since 9-11, in 
spite of the concerns for the economy and international 
terrorism.
    Our companies recognize that the markets for their products 
and services are worldwide, not just in Florida or the 
southeast or the U.S. as a whole. We develop our strategies on 
taxation, business environment and economic development with a 
broad view of the need for our companies to compete on a global 
scale. The results of single events and even the national 
economy should not be determining factors for success or 
opportunities for growth.
    The result is that on a national, State and local level, we 
must be diligent to fairly tax our producers of products and 
services, to allow them to be competitive at each level and, 
most importantly, at the international level where we compete 
with the entire world.
    Companies in this country need a competitive environment, 
beginning with a balanced taxation and regulation environment 
that allows for the greatest efficiencies. We believe in what 
we are doing in Jacksonville and in the State of Florida, and 
we urge Congress to evaluate and enact legislation and taxation 
policies that accommodate the requirements for competitiveness 
that makes our Nation's companies so strong.
    Thank you, Mr. Chairman.
    [The prepared statement of Barry Allred follows:]

  Prepared Statement of Barry Allred, Chairman, Jacksonville Regional 
                          Chamber of Commerce

    Mr. Chairman and members of the Committee, my name is Barry Allred 
and I am serving this year as the chairman of the Jacksonville Regional 
Chamber of Commerce. I am very pleased to have the opportunity to share 
our views with you today concerning where we have been, where we are 
and where we are going with a particular focus on the area of Northeast 
Florida including Jacksonville, and to some degree a reflection of the 
state of Florida as a whole and the Nation.
    The Jacksonville Regional Chamber of Commerce has over 4,000 member 
companies representing a variety of businesses of which over 90% are 
small businesses. Our community is not overly tilted toward tourism and 
because of that, may be a more balanced view of the economy today.
    Jacksonville is located in Northeast Florida touching the Atlantic 
Ocean on the East with a downtown area 15 miles inland on the St. Johns 
River. We are blessed with many natural assets including the 
intracoastal waterway, beautiful marshlands and large forested areas 
unlike anything you would expect in Florida. Jacksonville is first and 
foremost a business city that has been named the ``hottest market in 
the United States for the expansion and location of business'' three of 
the last six years. Our strategic location provides great accessibility 
for tourist opportunities in the Southeastern United States and at the 
same time provides an outstanding business location for the development 
and distribution of products and services.
    The attacks of 9/11 jolted the Jacksonville area much like every 
part of the United States. Our companies were looking for answers and 
trying to decide whether to pull back or accelerate in the aftermath of 
this terrible event. Tourism was, in fact, the first and most severe 
industry impacted as people were traumatized by the events and 
uncertain about flying or travel after the attacks.
    Our Chamber held a series of meetings to discuss the issues of 
operating a company in an uncertain environment and managing risk while 
moving forward with your business. The response was strong and very 
positive and our small businesses, on the whole, chose to take a more 
aggressive position rather than re-trench in the face of great 
uncertainty, if not danger.
    On the Tourism side, the most immediate impact was the reduction of 
air travel to various destinations. Our approach through our Convention 
and Visitor's Bureau was to analyze our market opportunities and begin 
to encourage a larger ``drive market'' for people in the Southeastern 
United States to vacation closer to home and without air travel. 
Following a very difficult 4th quarter in 2001, the new strategy began 
to work and business has been rebounding for the past 2 years. Although 
we are not yet ahead of the previous levels from the year 2000, we 
expect to be at or above those levels by the last quarter of this year.
    Air service and corresponding tourism travel also have returned to 
near normal levels of activity. We do believe people still have 
concerns about flying; however, most of those concerns have been 
overridden. We believe that Jacksonville is fairly representative of 
those markets that were able to utilize a driving market to recover 
more quickly, but it seems most locations in Florida as a whole and the 
United States have had a relatively strong rebound and are nearing more 
normal levels on the tourism front.
    A week ago I completed a business development mission to four 
European countries and met with about 25 companies. The only negative 
issue encountered concerning the United States was the great difficulty 
with passport and visa issuance under the new system. We were told it 
was discouraging both business and pleasure visits to the United 
States. I am no expert on the process but I hope security needs of the 
United States and the need to expedite the processing can be addressed, 
which will make our friends more comfortable and interested in travel 
to the Untied States. I also believe that Congress should consider 
providing financial support to marketing efforts especially in Europe, 
which encourages U.S. travel along with developing a smooth processing 
approach and an explanation of that process. This could greatly 
increase the flow of money into the Untied States and help our economy. 
I realize this is a delicate balance but a very important one.
    Another piece of evidence is Jacksonville's new cruise ship 
business. Prior to 9/11 no cruise ships served north of Cape Canaveral 
in Florida. After 9/11, Jacksonville became an attractive market and 
now is served by 2 cruise ship lines because more people want to drive 
to a cruise than fly. Our new cruise service has been very successful.
    For Jacksonville and any location hosting major events, what has 
changed is the substantially increased cost of dealing with security. 
Next February, Jacksonville will be the host of the Super Bowl and in 
doing so will bring over 100,000 people to our city during the week of 
the game. The process of hosting large numbers of people now has a very 
large price tag associated with it--one that goes beyond the scope of a 
community or even a state to be able to handle. The reasons for these 
concerns are not related to any community or to any state but instead 
to the national issues associated with our democracy and our 
international relations. That being said, another issue I would like 
you to consider is greater support at the Federal level when dealing 
with security for major national events.
    A strategic issue that you as a Congress must wrestle with is the 
balance between security and reasonable comfort for travelers. As a 
nation, we have agreed that we will not allow terrorism to disrupt our 
lives and will move forward in spite of efforts to keep us from doing 
so. This means that we must be ever mindful of security requirements to 
make air and other forms of travel as safe as is reasonable.
    At the same time, we have to balance those needs for security with 
a level of reason that encourages people to be willing to utilize 
efficient forms of mass transportation. Striking that balance between 
reasonable and effective security, and effective and efficient 
operations is an important and difficult responsibility as you 
establish regulations through the governmental process. We urge you to 
listen to experts on both sides of the fence--those providing the best 
and most efficient security and those representing the travel and 
tourism industry making the clearest judgment on the tolerance levels 
of our traveling public.
    In the broader economy of Jacksonville and Florida, we have had 
significant success in our overall growth and development. Florida has 
managed to add jobs every month since 9/11 in spite of concerns for the 
economy and international terrorism. Our companies recognize that the 
market for their products and services are worldwide not just in 
Florida or the Southeast or the U.S. as a whole. We develop our 
strategies on taxation, business environment and economic development 
with a broad view of the need for our companies to compete on a global 
scale. The results of single events and even the national economy 
should not be the determining factor of success and opportunities for 
growth.
    The result is that on a national, state and local level, we must be 
diligent to fairly tax our producers of products and services to allow 
them to be competitive at each level and most importantly at the 
international level where we compete with the world. Companies in this 
country need a competitive environment beginning with balanced taxation 
and regulations that allow for the greatest efficiencies. We believe we 
are doing that in Jacksonville and in the state of Florida and urge 
Congress to evaluate and enact legislation and taxation that 
understands the product competitiveness requirement that makes our 
nation's companies strong.
    Thank you, Mr. Chairman.

    Mr. Stearns. I thank you.
    Ms. Friend. Thank you.

                 STATEMENT OF PATRICIA A. FRIEND

    Ms. Friend. Chairman Stearns, Representative Schakowsky, 
and members of the committee, my name is Pat Friend. I am a 
flight attendant, and I am the International President of the 
Association of Flight Attendants--CWA. AFA is the 
representative of 45,000 flight attendants at 26 carriers.
    Thank you for this opportunity to speak to you today on the 
crucial matter of flight attendant security training, and why 
it is important to travel and tourism in the airline industry.
    The job of a flight attendant is, first, to protect the 
flying public. It is a job that we love, and it is one that we 
do with pride and care. We are trained to evacuate an aircraft 
in case of an accident, to fight fires in the air, to manage 
abusive passengers, to administer first aid, and to give 
comfort. But unbelievably, we still have not been trained to 
appropriately handle a security crisis on board our airplanes.
    On three separate occasions, Congress has specifically 
acknowledged the need for this vital training. The Air 
Transportation Security Act, the Homeland Security bill, and 
most recently, the 2003 FAA reauthorization bill all recognize 
that flight attendant security training is part of a 
comprehensive strategy to combat terror in the skies.
    While the TSA does appear to be moving forward on 
developing an advanced voluntary training program, they have 
skipped over the basic mandatory training that is called for in 
the Vision 100 FAA reauthorization. That is the training that 
we need.
    One of the arguments we have heard against this is cost. 
Imagine, Mr. Chairman, what the price in human suffering will 
be if passenger aircraft are again used as weapons, and what 
will be the cost to our aviation industry and to our economy? 
How many pleasure travelers will aviation lose? After all, 
these are people for whom travel is discretionary. They can 
choose whether or not they want to explore someplace new or 
simply spend their leisure time at home.
    This quote from the 9-11 Commission reiterates what AFA has 
been saying since September 11: ``We also learned how hijackers 
beat the last line of defense on the four flights, because the 
professionals had been trained to cooperate with hijackers, not 
fight them.'' Unfortunately, very little has changed since that 
horrible day.
    Many of our flight attendants, even those at major 
airlines, are still being trained to cooperate with aggressors 
and to try to appease them. Do you believe that asking a 
terrorist the equivalent of, are you having a bad day?, is an 
effective way to protect our skies. I apologize if I am 
sounding flip, but that is truly the reality of the state of 
flight attendant security training today.
    Watching a 13-minute video is not effective security 
training, nor is taking a written test for which you have been 
thoroughly prompted with all of the answers. Absent a mandated 
program from the TSA for basic, mandatory training, airline 
security training programs for flight attendants will continue 
to be diluted over time, as it becomes a race to the bottom to 
see which airline can get away with the cheapest and the 
shortest training program.
    Cockpit doors are now reinforced. Some pilots carry guns. 
Federal air marshals are on selected flights, and vigorous 
airport security protocols have been established. There are new 
procedures in place for almost every aspect of aviation 
security. The public is well aware of these changes that have 
been made to help ensure their safety. However, there is still 
one crucial link missing.
    Flight attendants are the real first responders to an on-
board incident. Yet we remain frustrated and troubled that our 
role in aviation security continues to be ignored and denied.
    Not every commercial flight has a pilot with a gun in the 
cockpit, nor does it have a Federal air marshal. But with very 
few exceptions with the very smallest of our aircraft, every 
commercial flight in this country has at least one flight 
attendant on board. It is that flight attendant who, if 
properly trained, can be our best security asset and a last 
line of defense against another terrorist attack.
    We have been advised that trainees in the Federal flight 
deck program and the Federal air marshal programs are often 
told, if it becomes necessary, just shoot through the flight 
attendant. What would the response be from travelers if they 
were aware of this? Wouldn't they fear for their own safety 
even more, and doesn't it make more sense to train the flight 
attendant to assist in a crisis rather than to just be the 
human shield?
    In fact, both the FFDOs and the air marshals have stated 
that it is their preference to have the flight attendant as a 
trained ally, one with the skills, the knowledge, and the 
ability to help foil a terrorist.
    Flight attendants are the front line safety personnel on 
the aircraft and the first responders to in-flight safety and 
security incidents. Yet efforts by AFA and many in the Congress 
to provide them with meaningful security training have been 
unsuccessful.
    I know that the members of this committee and indeed a 
majority of Congress realize that we need updated, meaningful 
security training, and it is only with your insistence that we 
will get the tools we need and that we want in order to fulfill 
our job to protect our passengers. Please help us in our quest 
for a minimum, clear, consistent, industrywide, standardized 
security training, training that will truly close the aviation 
security gap.
    On September 11, 2001, 25 heroic flight attendants lost 
their lives trying to protect their passengers and the security 
of the cockpit. Their wrists were bound. Their throats were 
slashed, and they died, helpless to help those whom they were 
entrusted to protect. Please help me to ensure that that never 
happens again. Mandate appropriate security training for flight 
attendants. Thank you.
    [The prepared statement of Patricia A. Friend follows:]

  Prepared Statement of Patricia A. Friend, International President, 
             Association of Flight Attendants--CWA, AFL-CIO

    Members of the Committee, Ladies and Gentlemen, my name is Pat 
Friend and I am a flight attendant and the International President of 
the Association of Flight Attendants--CWA. AFA is the representative of 
45,000 flight attendants at 26 carriers. Thank you for this opportunity 
to present this testimony on the crucial matter of flight attendant 
security training.
    The job of a flight attendant is first to protect the flying 
public. It is a job that we love and one that we do with pride and 
care. We are trained to fight fires in the air, to administer first 
aid, to evacuate an aircraft in case of an accident, deal with abusive 
passengers and to give comfort. We receive comprehensive training in 
how to handle all these situations onboard the aircraft and are now 
officially recognized for these roles through FAA certification. 
Unbelievably, almost three years after the horrific events of September 
11th, 2001 we still have not been trained to appropriately handle a 
security crisis onboard on our airplanes.
    On September 11, 25 heroic flight attendants lost their lives 
trying to protect their passengers and the security of the flight deck. 
Their wrists were bound, their throats slashed, and they died with the 
knowledge they would no longer be there to help those whom they were 
entrusted to protect. We must not forget the heroic flight attendants 
we lost that tragic day. We all learned from the September 11th 
Commission report in January and heard first hand the phone call placed 
by flight attendant Betty Ong on American Airlines flight 11. Her calm 
demeanor and professionalism in the face of this attack was a true 
testament to her, and all flight attendants,, ability to put their 
training to good use. As one television commentator stated after 
hearing the presentation of her taped phone conversation, ``She carried 
out her job professionally and reacted well to her training. 
Unfortunately, she had received the wrong kind of training.'' I could 
not agree more and clearly the 9-11 Commission felt the same.
    Following is a quote from the 9-11 Commission after the January 
27th hearing which reiterates what we have been saying since September 
11th: ``We also learned how hijackers beat the last line of defense on 
the four flights, because the professionals had been trained to 
cooperate with hijackers, not fight them.'' I agree completely with 
this statement and applaud the 9-11 Commission for highlighting this 
tragic oversight in our security training as it existed prior to 
September 11th. Unfortunately, I am here to report to you that nothing 
has changed since that horrible day. We are no better prepared today to 
handle a situation like that which occurred on September 11th and our 
training is still woefully inadequate.
    Congress has taken many actions to improve the overall safety of 
the aviation system. Screeners have been federalized and are receiving 
updated training. Screening procedures have been tightened. Flight deck 
doors are now reinforced, many pilots carry guns, and armed federal air 
marshals are on select flights. There are new procedures in place for 
many aspects of aviation security. We have supported these efforts and 
will continue to support all efforts that make our aviation system, and 
our workplace, more secure. However there is still one crucial link 
missing. We remain frustrated and troubled that the needs of flight 
attendants in order to adequately perform their roles in making the 
aviation system more secure have been delayed, denied and ignored. Our 
skies are not safe and they will not be safe until flight attendants 
receive the training necessary to protect our passengers from another 
September 11.
    Many steps can be taken to improve aviation security, but 
regardless of how many steps are taken, one must view the entire 
aviation system as a whole and make sure that each and every loophole 
has been closed. As you well know, loopholes remain and the most 
glaring is the continued delay in implementing industry-wide, 
comprehensive flight attendant security training. We know that 
potential weapons are still making it onboard the aircraft, as the GAO 
has reported, even though screening procedures have been improved. Not 
every commercial flight has a pilot with a gun, nor does it have a 
federal air marshal. But, with a few exceptions for very small 
aircraft, every commercial flight in this country has at least one 
flight attendant on board, in the cabin. It is that flight attendant, 
who properly trained, can be our best security asset to help protect 
against those weapons that are still clearly making it onboard.
    Besides learning how to protect ourselves and to defend the 
passengers in the cabin, it has become clear that with the introduction 
of guns onboard the aircraft, another reason to be trained has made 
itself abundantly clear. We are told that trainees in the FFDO and the 
federal air marshal programs are sometimes told, if necessary, to shoot 
through a flight attendant. The Washington Post reported in December of 
2002 that air marshals still shoot the flight attendant mock-up in 
their training simulations and are still graduating from the program. 
Doesn't it make more sense to train that flight attendant to assist in 
a crisis rather than to be a human shield? In fact, both FFDO's and air 
marshals have stated it would be their preference to have the flight 
attendant as a trained ally--one with the skills, the knowledge and the 
ability to foil a terrorist.
    Flight attendants are the front line safety personnel on the 
aircraft, as recognized by the 9-11 Commission. We are truly the first 
and last line of defense in the aircraft cabin. We recognized the 
problems with our security training immediately following September 
11th and have been trying diligently since then to get the federal 
government to realize this fact and take the appropriate action to 
guarantee that we receive adequate and necessary security training.
    I know that the members of this Committee and a majority of 
Congress realize that flight attendants need updated and meaningful 
flight attendant security training. On three separate occasions 
Congress has specifically acknowledged the need for this training; the 
Air Transportation Security Act, the Homeland Security Act, and the 
2003 FAA reauthorization bill. Yet, these many attempts to provide 
flight attendants with meaningful security training have not been 
successful.
    The legislative history and struggles to enact security training 
are well known to the members of this Committee, but for the sake of 
the record, I would like to reiterate them. Immediately following the 
attacks of September 11th, AFA began to call on Congress to direct the 
Federal Aviation Administration (FAA) to update flight attendant 
security training. As the 9-11 Commission made clear, the anti-
hijacking training provided to flight attendants prior to the September 
11th attacks did not reflect the reality of the new threats posed to 
the domestic aviation system. Terrorists were no longer looking for 
hostages to trade for political demands. Instead, terrorists now have 
an evil goal to use our workplace, the aircraft, as a weapon of mass 
destruction. It was only logical and clear to the flight attendants of 
this country that our training needed to be updated in order for us to 
effectively fulfill our role to protect the safety and security of 
passengers.
    That is why AFA worked closely with Members of Congress to update 
and expand required flight attendant security training through the Air 
Transportation Security Act (ATSA) in the fall of 2001. The final 
legislation that was passed by Congress and signed by the President 
included a number of provisions in section 44918 that required the FAA 
to update and improve currently existing flight attendant security 
training requirements. These provisions called on the FAA to require 
that carrier flight attendant security training programs be updated and 
changed to reflect the current security and threats that flight 
attendants may face onboard the aircraft. It was the intention of AFA 
that with the FAA approving these updated programs, all carriers across 
the industry would implement similar if not identical training 
programs.
    However, in the immediate months after passage of ATSA it became 
abundantly clear that the security training programs being implemented 
by the carriers and approved by the FAA were not adequate or 
consistent. There was a wide variance in the type of training and the 
hours spent on the training. Some carriers were showing flight 
attendants a twenty-minute video, while others were conducting two full 
days of voluntary, hands-on training. Even more amazing was the fact 
that all of these programs received approval from their FAA Principle 
Security Inspectors (PSIs). Actions such as these only highlighted to 
us the fact that the FAA was not adequately prepared to handle 
supervision of the security training programs.
    Security training discrepancies in the aviation system led to many 
flight attendants unprepared for any future terrorist attack onboard an 
aircraft. We at AFA strongly stated repeatedly that all flight 
attendants, regardless of the carrier employing them, must receive the 
same level of adequate security training. The system would not be 
effective if it was simply a patchwork quilt of programs that varied 
significantly from carrier to carrier.
    It was at this time that AFA began to lobby Congress to implement 
requirements for flight attendant security training that included a set 
number of hours for the training programs. These mandates would have to 
be enforced so that all carriers were providing the same basic level of 
security training for all flight attendants in the US aviation system.
    During the spring of 2002, as legislation began moving in the House 
and Senate that would allow pilots to carry firearms, AFA again lobbied 
Congress to mandate 28 hours of detailed flight attendant security 
training at all carriers, with the training program to be develop by 
the security experts at the Transportation Security Agency (TSA). AFA 
arrived at this proposal after consulting with numerous security and 
training experts and after experts completed 5 months of instructional 
system design work with various groups of flight attendants and pilots.
    This ideal legislative language was approved in an amendment to the 
Homeland Security Bill by an overwhelming, bi-partisan vote in the 
Senate of 87-6 on September 5th, 2002.
    In our opinion, the final language that emerged from the conference 
committee working out the differences between the House and Senate 
versions of the legislation eventually took a step back from the 
original Senate language in that it did not mandate a specific number 
of hours for training. It did however call on the TSA to issue a rule 
mandating a set number of hours for extensively detailed flight 
attendant security training that would be implemented by all carriers 
and mandatory for all flight attendants.
    I must admit that this was not our ideal language, for we have 
learned that if Congress is not specific in spelling out details, the 
FAA and now the TSA have been susceptible to pressure from the airline 
industry in weakening meaningful and comprehensive requirements. 
However, we began to cooperate with TSA under the framework of the 
legislation and with those tasked by TSA to develop this rule in order 
to guarantee that the training requirements and the final rule issued 
by the TSA would be as effective and comprehensive as possible. We were 
also pleased to read on November 19th, a letter from TSA Under 
Secretary Admiral James Loy in response to an October 10th letter from 
Representative Peter DeFazio asking him about the position of having 28 
hours of training, which stated ``We (TSA) generally agree that, as an 
additional ring of security, flight attendants, well trained in first 
line defense techniques, will enhance the overall security of the 
aircraft while in flight. Additionally, we believe that the proposed 28 
hours of security training time is reasonable to ensure basic skills 
are learned and adequately maintained over time.''
    We were optimistic that the TSA working groups designed to develop 
the security training would do the right thing. However, we 
underestimated the opposition by our employers, the nation's air 
carriers to implementing comprehensive security training. They made 
repeated back door legislative efforts to gut the requirements in the 
Homeland Security Act that would have required them to abide by any 
industry wide training standards. It appears to have been their goal, 
through these repeated legislative efforts, to make security training 
for flight attendants voluntary, make the flight attendants pay for the 
training themselves and prevent any industry wide standards for such 
security training.
    As Congress began work on the FAA Reauthorization legislation, the 
air carriers continued their efforts to eliminate meaningful flight 
attendant security training. Finally, AFA and other flight attendant 
labor unions met with airline representatives to see if it was possible 
to reach some common ground on flight attendant security training 
requirements. In the end, the language included in the final House 
version of the FAA Reauthorization split flight attendant security 
training into two parts. A basic, mandatory level of security training 
that included a number of provisions such as crew communication and 
coordination, psychology of a terrorist and basic moves to defend 
oneself. The second tier of training was a more comprehensive, 
voluntary level of training which would include more aggressive methods 
of self-defense and be more physical. We believed that the intention of 
this second tier would be the flight attendant equivalent of the 
voluntary FFDO program. Yet I will remind the Committee that it is not 
voluntary that we are on the other side of the locked flight deck door.
    This language was not ideal for AFA, but it did at least create a 
basic, mandatory level of security training with the requirement that 
TSA must develop regulations and guidelines for that training. We felt 
strongly that this basic, mandatory level would be industry wide, and 
that TSA would issue those guidelines and regulations. All interested 
parties had agreed that the TSA ``shall'' issue those regulations, and 
the original legislative language reflected that intention.
    It was reported to AFA, and subsequently confirmed by numerous 
sources, that at this point Continental Airlines, through last minute, 
back-room legislative machinations was successful in changing the 
language regarding basic, mandatory flight attendant security training 
from ``TSA shall issue guidelines'' to ``TSA may issue guidelines.'' By 
changing this one word, the ability to force TSA to issue these 
industry-wide guidelines was removed. By changing the mandate, TSA, 
which has proven to be under the pressure of the carriers, would now 
not be required or mandated to issue those regulations for the crucial, 
mandatory flight attendant security training.
    Since passage of the FAA Reauthorization, it has become clear to 
AFA and other interested parties, that the TSA has stopped working on 
developing those guidelines for basic, mandatory flight attendant 
security training. In fact, some of the individuals that were tasked at 
TSA with developing the program as called for under the Homeland 
Security Act have had their positions eliminated and work on developing 
these regulations and guidelines has been shelved. Without a mandate 
from Congress directing that TSA shall issue those guidelines, it is my 
belief that TSA will continue to remain under the pressure of the 
airlines to not issue those guidelines.
    At this time the security training programs at each airline have 
only become worse. The programs have been simply watered down more and 
more over time as it becomes a race to the bottom to see which airlines 
can get away with the cheapest and easiest program. Flight attendants 
and the safety and security of the flying public are the ones suffering 
the most from this race to the bottom.
    I continue to be baffled by the obstinate opposition by some air 
carriers to comprehensive, mandatory flight attendant security training 
programs. We also have never received a clear answer from them on why 
they have fought every attempt to make our aviation system the most 
secure in the world. The only arguments we have heard are that it is 
too costly for them to train their flight attendants and that security 
training goes against their corporate culture. Let me say that I and my 
members would be the first to wish that our world hadn't changed so 
dramatically on September 11th. But unfortunately that is the reality 
of the situation today and like it or not, corporate culture must also 
change. Like it or not, flight attendants are the eyes, ears and first 
line defenders in the cabin of the aircraft. We did not wish for this 
position, it's the reality of our world today. To continue to ignore 
and fight that reality only puts many more lives in jeopardy.
    It also has been said that flight attendants do not need extensive 
security training as the passengers will come to their aid. While that 
may seem to be the case, it may not always prove to be reality. It is a 
false hope that we cannot rely on. Recently, a flight attendant for a 
major airline was attacked by an abusive passenger. The passenger 
lunged at the flight attendant. He was attempting to grab her. Not one 
passenger came to her assistance. It was only because of the fact that 
she had taken basic self-defense classes in college, and remembered 
that training, was she able to break free from the attacking passenger.
    The other argument we have heard against this is cost. However, if 
through this training only one life is saved, there is no price that 
can be put on it that is not worth paying. We have also attempted to 
work with the carriers in order to try and find a way that the federal 
government may step in to assist in paying for this added cost 
associated with protecting our countries aircraft. We have been 
rebuffed every time.
    Where does that leave flight attendants today in their ability to 
respond to another terrorist attack onboard aircraft? Well, as I 
pointed out earlier, we are no better prepared than we were on 
September 11th. Security training at the airlines, where it even 
exists, is meaningless. Why do I say, ``where it even exists''? Because 
I can report from one of our members at one major airline who recently 
completed his recurrent training, which should have included a review 
of his initial security training, that no time was spent on security 
training. The carrier did spend over an hour however on a program 
entitled ``corporate ethics'' where the flight attendants were trained 
on important topics like how taking an opened, half bottle of water, 
was considered theft of company property. When the flight attendant 
asked the company why there was no time devoted to the important topic 
of security training, he was told that ``there wasn't enough time''.
    We've received reports from another major carrier, that they have 
included security training in their recurrent training. However, for 
all intents and purposes, their security training has been given only 
as an afterthought. This carrier showed a six-minute video followed by 
a few minutes of questions and discussion. Another major carrier 
devotes approximately one hour, which includes watching a fifteen 
minute video. The class does however spend an hour devoted to a course 
entitled ``Equal Treatment of Customers.''
    It appears that the carriers are getting around the requirements 
for security training by including important security procedures in 
home study packets. Flight attendants are given the information in 
booklets, which they are supposed to read on their own time at home. As 
we've learned from the examples I have outlined, there is clearly no 
further discussion of the security principles. We remain concerned that 
important security training procedures could potentially be circulated 
to the general public and any potential hijackers in training via these 
home study packets.
    What recourse do we have to address these problems? Unfortunately, 
we do not have many tools available to correct these deficiencies in 
training. However, section 603 (6) of the Vision 100--Century of 
Aviation Reauthorization Act as passed last year provides that TSA 
shall monitor air carrier training programs. It states: ``In 
determining when an air carrier's training program should be reviewed . 
. . the Under Secretary shall consider complaints from crew members.'' 
AFA has received thousands of letters from our members directed to TSA 
urging the agency to conduct an audit of their carrier's training 
programs due to the fact that they feel the programs are insufficient. 
I urge the Members of this Committee to take the actions necessary to 
make sure that the TSA lives up to the requirements of this section and 
conducts thorough and meaningful audits of the carrier training 
programs to ensure that they are meeting the requirements outlined in 
the law.
    Recently, the TSA stated in a letter to the Chairman of this 
committee that they have been making progress on developing the 
guidelines for the advanced, voluntary security training outlined in 
the Vision 100 Act. Is it logical that TSA would develop an advanced 
security training program, when they have yet to develop even the 
basic, mandatory level of training called for in the Act?
    It is clear that the airlines will continue to provide inadequate 
and weak training programs until the TSA does its job and issues 
regulations that require a standardized, industry-wide, meaningful 
security -training program. These regulations should guarantee that 
airline training programs incorporate topics such as, but not limited 
to, psychology of a terrorist, verbal commands, items readily available 
onboard to assist in self-defense, physical means to defend oneself and 
more importantly crew communication and coordination. This last part is 
vitally important if all three parts of the onboard aviation security 
team; the pilots, air marshals, if present, and flight attendants all 
know how the other groups have been trained to react. Our members need 
to know how to slow down the hijackers long enough for those with 
deadly weapons to stop the terrorist or for a pilot to land the 
aircraft.
    I, and my members need your help. We refuse to shirk our 
responsibility to the flying public but we have been trying for almost 
three years to get our employers to give us what we need. It is evident 
that is not going to happen without your diligent oversight of TSA and 
directing them to stop the delays. It may be necessary for this 
Congress to once again pass legislation that makes the federal 
government do what it should have done immediately after September 
11th.
    It is only with your insistence that we will get the tools we need 
and want to fulfill our job to protect our passengers. Please help us 
in our quest for a minimum, clear, consistent, industry-wide 
standardized security training developed by TSA--one that will truly 
close the ``aviation security gap.''
    In closing, I would like to leave you with one thought: The only 
people who were successful in saving lives on September 11 were those 
flight attendants who actually abandoned their training. With the help 
of their passengers they prevented Flight 93 from being used as a 
missile. Despite their training to acquiesce, they fought back. Yes, 
they still lost their lives, but they lost them saving the lives of 
countless others--most likely the lives of those of you sitting here in 
this Committee room. Do not allow the lesson they taught us be in vain. 
Mandate appropriate, industry-wide security training for flight 
attendants.

    Mr. Stearns. Ms. Friend, thank you. I think I will start 
with you, just because you had quite a, I think, emotionally 
strong argument here, because so many did die and were helpless 
in the process.
    As I understand, what you want is Congress to mandate and, 
I guess, to obviously fund support for the training of the 
flight attendants?
    Ms. Friend. The short answer to both those questions is 
yes. The FAA reauthorization bill breaks the security training 
down into two parts, basic training and then a more advanced 
training. Unfortunately, the language in the legislation was 
changed at the last moment to say that the TSA may develop 
guidelines for these trainings. It was changed from ``shall 
develop'' to ``may develop.'' Of course, the moment that 
happened, the TSA put any work they were doing on that basic 
training on the shelf.
    Mr. Stearns. Put it on the back burner.
    Ms. Friend. Yes. So we would absolutely like for the 
Congress to tell the TSA that they must develop these 
guidelines, so that we have consistent training. We believe 
that the cost of providing aviation security is a shared cost. 
It is a shared cost by the people who use the transportation 
system. It is shared by the people who provide the 
transportation system, but we believe it is also a shared 
responsibility of our government to provide safe and secure 
transportation.
    Mr. Stearns. Is the European Community or the countries in 
the Pacific Rim--do they provide a training for their flight 
attendants?
    Ms. Friend. They all provide different levels of training.
    Mr. Stearns. I mean more than we do in the United States, 
or not?
    Ms. Friend. In some instances, yes, I would say. I couldn't 
make a blanket statement.
    Mr. Stearns. Could we say that the European Union is a 
paradigm, a pattern for us to follow?
    Ms. Friend. No, I would not. We are trying to set the 
standard.
    Mr. Stearns. Set the standard. Okay. I would say to Mr. 
Allred, after listening to the fellow from Homeland Security, 
he mentioned Minneapolis, Los Angeles, Houston, Boston, and 
Washington, D.C. I am going to write him a letter and ask him 
to consider Jacksonville, particularly in light of the 
Superbowl.
    So I will ask for your input to see if we can get a 
demonstration project for sort of a trusted traveler, so that, 
if nothing else, to try and make him aware how important it is 
to expedite travel into Jacksonville because our airport is not 
a large airport, but we are going to have a lot of demand. So 
probably he should be more aware of that. So I intend to write 
that letter.
    Mr. Brown, I guess, a question perhaps not so much on the 
subject, but a number of your 43 million people that 
participate, it doesn't appear that the high price of gasoline 
is affecting the traveling at all. Is that correct? Do I hear 
you say that?
    Mr. Brown. Well, you know, that is a tough question to 
answer, only because it affects lower income people and people 
on fixed incomes much harder than it does people perhaps taking 
a vacation. An 800 mile trip with 20 miles to the gallon--at 
the current gas prices, it costs about $20 more this year.
    I think, if oil prices went up to $50 a barrel with gas 
prices in the ballpark of $3.00, we will see some very----
    Mr. Stearns. A 20 percent increase?
    Mr. Brown. Yes, very big changes in behavior at that point.
    Mr. Stearns. So that would affect it then?
    Mr. Brown. Yes.
    Mr. Stearns. Mr. Pearson, you are actually saying, contrary 
to what I hear maybe from Mr. Allred or others, that the 
international traveler coming into the United States is down. 
It has not reached pre-9-11 levels?
    Mr. Pearson. International travel specifically is down. It 
is still down from even last year. The surplus that Ranking 
Member Schakowsky mentioned, about $4 billion surplus, actually 
was at a peak at $26 billion in 1996. So significantly, over 
the last 8 years, and post-9-11 we have seen that decline.
    It was out of a Department of Commerce study that 
highlighted that specifically about that, but it is declined. 
So the testimony is around ensuring we don't further--We 
encourage that growth, encourage that international travel 
coming inside the country by having programs in place that 
encourage that.
    I think the key point about the harmonization, chairman, is 
there are lots of programs out there that are all for the right 
purposes. It is finding a way to effectively create an umbrella 
communication and marketing program which clearly articulates 
the benefits and the policies and procedures for travelers 
coming abroad. I think that is a big challenge of all these 
programs and policies being implemented.
    Mr. Stearns. But, Mr. Allred, you are saying that the 
travel and tourist activity in Jacksonville area is recovered 
to pre-9-11, in your opinion?
    Mr. Allred. My statement was that we anticipate that it 
will by the fourth quarter of this year.
    Mr. Stearns. Okay. Mr. Pearson, you are an international 
organization. So you have lots of hotels in Europe. How has the 
business in Europe--has that been affected by 9-11?
    Mr. Pearson. Oh, absolutely. I mean----
    Mr. Stearns. So if I go to Belgium or to Paris or to London 
or to Germany, I am going to find those hotels are not at the 
pre-9-11 occupancy, too?
    Mr. Pearson. That is correct. I mean, it was definitely a 
world impacting travel impact.
    Mr. Stearns. Do you think it is because of the hassle of 
the airports more than anything or is it just fear?
    Mr. Pearson. I think the broader issue is the fear. I think 
the broader issue is the economic recovery globally, but I do 
think that it is a global issue. It is not just a U.S. issue in 
terms of supporting these travelers.
    Mr. Stearns. You know, when you look at the passenger 
screening procedures, the cargo screening, flight marshals on 
some of them, and Ms. Friend mentioned they are not on all of 
them but they are on some of them, obviously the reinforced 
cabins--I mean, it seems like with all that, and if all the 
passengers knew it, they would not be concerned anymore about 
the takeover of a plane.
    It just seems to me then, it comes down to, when I go down 
to Orlando or I go to Jacksonville--not so much Jacksonville, 
but Orlando, sometimes you have to wait a very long time just 
to get through the screening process. I would think, if I was 
trying to make a decision on traveling, if I could go by car, I 
might consider it.
    Mr. Pearson. Interesting point, Mr. Chairman. There is some 
research by D.K. Shifflet as well about people's tolerance for 
driving versus flying, and pre-9-11, if it was less than 4 
hours, business travelers or travelers abroad would say, you 
know, it is only 4 hours, I will just jump in the car and go. 
Now post-9-11, it is moved to 6 hours, because inherently it 
included some time associated with airport delays and so forth.
    So another point is there is some other research about--
There is, I wouldn't say increased hassle, but still a concern 
about hassle for traveling.
    Mr. Stearns. Mr. Lounsberry, I think all of us were a 
little curious and not aware of how much your business is 
impacted by these children that come over from other countries 
or, I guess, what you are saying is this sort of border patrol 
cutback has hurt your school trips.
    Mr. Lounsberry. Right, particularly in southern California.
    Mr. Stearns. Coming in through San Diego?
    Mr. Lounsberry. Through San Diego and our Universal Studios 
Hollywood, yes. And I would assume that you could go across the 
southeast border, and you would have similar situations in 
Texas, that kind of thing, coming across for field trips, but 
southern California, particularly.
    Mr. Stearns. Well, that was a new point, I think. I was 
talking to my committee staff on this. How would you like us in 
Congress to help? Just by increasing border control?
    Mr. Lounsberry. Well, I think it is taking a lot, and I 
think, as we have heard today, a lot of pilot projects now as 
kind of the base security seems to be moving along, and going 
into place. Now is the time to take a look at some of these 
situations that are huge economic issues for certain areas, but 
probably not enough in what's been having to be done in the 
last 3 years to make the list, move into the top 5 or 10 list 
of projects, to take a look at now some of these regulations 
that have just kind of left situations like this in the dust, 
to come back and look. What can be done? How can it be 
accommodated, all within the context of maintaining security?
    We know it is not a factor that impacts the entire country, 
but it is certainly important to certain economic regions, and 
we would hope that we can now look at some of these particular 
situations and, given the technology and the new processes that 
have been laid out and going into place, is there a way to fit 
them into this somehow while still maintaining everything we 
have to do.
    Certainly, the border situation in the southwest presents a 
whole other set of circumstances, but we think we need to start 
coming back to some of these ``one of,'' so to speak. But I am 
sure there are others, not just in the southwest but elsewhere, 
that should be addressed, because they are important.
    Mr. Stearns. True from Canada, too.
    Mr. Lounsberry. Canada. I would assume the norther border 
is the same situation. So perhaps looking at some--This is a 
pilot project, so to speak, to see if certain economic areas 
that are impacted by these kind of programs can be addressed 
and fit into one of these programs to bring this business back 
to the U.S. and our southern neighbor, something that has been 
very important and has been lost in this process.
    Mr. Stearns. My time has expired. Ms. Schakowsky.
    Ms. Schakowsky. Thank you. Ms. Friend, you heard the 
testimony in response to my questions in the first panel from 
Department of Homeland Security. I wondered what your reaction 
was, and if you were aware that there was even under 
consideration a plan that would actually charge flight 
attendants for training, clearly indicating its optional 
nature, but also putting up barriers, I would think, to people 
accepting that kind of training. Tell me your reaction.
    Ms. Friend. The previous witness was referring to the 
advanced portion which, according to the FAA reauthorization of 
2003, is intended to be voluntary. But it is intended to--It 
was intended to build on a mandatory basic training module that 
deals with all kinds of issues like the psychology of a 
terrorist and crew coordination and very basic self-defense.
    Then there was a secondary piece that went on that would 
offer on a voluntary basis perhaps at the individual's expense 
more extensive personal defense training. That is what he was 
referring to, that they are working on guidelines for the 
advanced portion which they will then, for some mechanism, and 
there has been some discussions about how they would do that, 
they would offer and make available in locations across the 
country. But it is pointless, because it doesn't build on 
anything, because there hasn't been the basic training.
    I would expect that it would be a miserable failure, and 
they would not have anyone sign up for the advanced training. 
Simplistically, it is sort of like signing up for a third year 
language course when you haven't had the first and the second 
year.
    Ms. Schakowsky. So what is needed to get the basic training 
done? Does Congress need to act? Does the administration have 
the authority right now, and have you done estimates of what 
the cost would be to properly train flight attendants?
    Let me just say this about the so called advanced training. 
I mean, I think everyone knows that there are not the marshals 
on every single flight, and we know that the cockpit doors are 
now sealed. I am just wondering.
    It would seem to me that the kind of so called advanced 
training that you are talking about, that at least someone on 
every flight, I would think, ought to have that. Otherwise, it 
seems that in a crunch we would be relying on passengers. We 
may anyway be relying on passengers. I don't think that is a 
horrible thing. I think passengers have a new psychology, too, 
about how to respond.
    This basic training--are there cost estimates? Go ahead.
    Ms. Friend. Well, let me just comment on a couple of 
things. Yes, the cockpit door is secured--is reinforced. But 
that is only secure as long as it is closed, and it is opened 
periodically throughout the flight and those of you that fly 
often have seen the flight attendant standing practically in 
front of the cockpit door or basically the front of the cabin 
when it is opened.
    Again, I am not quite sure what the reaction is supposed to 
be when someone comes charging down the aisle when that door is 
open.
    Ms. Schakowsky. But let me stop you there. Who makes the 
decision? Are there no rules about that door being closed, and 
then is it a pilot that decides that?
    Ms. Friend. It is the pilot that decides, and I believe 
there--I know there are FARs that speak to the door is only 
supposed to be opened in the case of physical necessity, which 
means handing in food or when the pilot comes out for physical 
reasons. It is supposed to remain closed at all other times, 
and it does.
    There is a greater consciousness and a greater awareness, 
but to your basic question about cost: The cost is in time, is 
in lost time, if you will, the time that the individual flight 
attendant would not be in service or working while they were 
getting the training.
    That again is going to depend on, of course, what is the 
person's rate of pay. But it is a cost of doing business, of 
providing a secure environment. I mean, we are selling safe 
travel, and we have not closed the loop to provide all of the 
reassurance that we need to.
    As far as what needs to be done, the language says that the 
TSA may develop these training guidelines, including all of 
these various components. They have the authority to do so, but 
they don't have a mandate to do so, and they are responding to 
pressure from the industry, and they have chosen not to do so.
    Part of the reauthorization language said that one of the 
other responsibilities and authority of TSA is that they should 
audit the training programs that are being offered, at the 
request--and they would act on the request of a flight 
attendant who said I don't think I am getting adequate security 
training; would you look at my company's training.
    We know that they have received hundreds of requests for an 
audit, which they have not acted on at this point. So urging 
them to, at the very least----
    Ms. Schakowsky. Have there been any audits done?
    Ms. Friend. There have been no audits done. There have been 
no audits. It is an issue that I intend to take up. I have 
finally obtained a meeting with Admiral Stone for next month 
where I intend to take that up with him, whether or not he 
intends to act on the requested audits, as he is required to in 
the FAA reauthorization.
    Ms. Schakowsky. Well, I would like to have my office, I 
personally, to work with you on that, to try and get those 
audits completed.
    My time is up, but I really want to thank each and every 
one of the panelists for your very thoughtful testimony. We do 
need to--It is a fine balance that we are trying to achieve, 
and I appreciate all the really thoughtful input that you had 
to our committee. So I thank you.
    Mr. Stearns. I thank the gentle lady. Before we go, I had a 
few more questions.
    Mr. Allred, what is Jacksonville doing in terms of security 
for the Superbowl. I guess the question would be how are you 
interacting with Federal, State authorities to prepare for such 
a large event, and is there anything we in Congress could do to 
help cities like yourself, either with Homeland Security or 
with the State government?
    Mr. Allred. Thank you for that question, Mr. Chairman. I 
can tell you that the city as a whole, and in particular the 
Superbowl host committee, has been very diligent over the last 
20 months in planning and preparing for the Superbowl, 
including sending delegates from our fire protection agency and 
our sheriff's office to Houston last year to study the issues 
involved with security.
    We have some unique characteristics to our Superbowl 
hosting opportunity this year in that, because we have the 
beautiful St. Johns River that flows right through the heart of 
Jacksonville, and because we needed additional room capacity, 
we have engaged cruise ships as a part of our accommodation 
plan for the Superbowl.
    There will be three large cruise ships in Jacksonville 
during the time of the Superbowl. As has already been pointed 
out here this morning, that introduces some additional unique 
security requirements.
    We are currently short some $7.5 million in necessary 
funding to address the issues related to strictly security with 
the Superbowl, and that pertains to primarily the additional 
labor element that is required. There is some equipment 
required, but it is primarily a labor element that is required 
for the additional time to provide the security, both landside 
and seaside, for the Superbowl this year.
    That is why I made the comment as a part of my remarks, 
that because this is a national event and because the security 
issues are driven by national concerns, we would ask the 
Congress to consider an appropriation to address at least a 
portion, if not all, of the cost of these security issues.
    Mr. Stearns. Do you deal with--what was it, New Orleans 
last year? The Superbowl?
    Mr. Allred. It was Houston last year.
    Mr. Stearns. Houston. Do you coordinate with them and say, 
you know, what did you do, and try to replicate everything they 
did?
    Mr. Allred. Absolutely. We started with Tampa a few years 
ago, San Diego, and then Houston. So our learning curve has 
been strong now for a number of years, and we certainly expect 
to leverage off of what others have done, what they have 
learned, as well as to ratchet up a notch or two based on the 
downside of some of their experiences.
    Mr. Stearns. Mr. Lounsberry, you heard Mr. Pearson say 
their international travel is down. Has Universal's share of 
international visitors increased or decreased?
    Mr. Lounsberry. We have had an amazing recovery in the past 
couple of years. We are still not--2000 was a record year.
    Mr. Stearns. So you are not to that level?
    Mr. Lounsberry. So we are getting close. You know, we have 
still got the real key summer and fall periods where we are 
anticipating we are going to get pretty close to the pre-9-11. 
2000 was a record year, and we are not going to probably get to 
that level.
    One thing I would like to add to that is, you know, the 
U.S. share of international travel has been dropping for the 
last 10 years, and it really goes back----
    Mr. Stearns. Forgetting 9-11?
    Mr. Lounsberry. Yes. Set that aside. That just compounded 
the issue. So we remain uncompetitive in the world as far as 
market----
    Mr. Stearns. Even with the drop in the dollar?
    Mr. Lounsberry. It has helped, but still we are losing 
share. We continue to use share, and to regain the share will 
take a Herculean effort. A lot of these security issues--In 
fact, the biometric deadline that, hopefully, now will pass the 
Senate and we will get that under control----
    You know, those kind of issues--The absence of a marketing 
effort on behalf of the United States leaves us without a real 
mechanism to communicate the positive messages.
    What is played in the tabloids in the U.K. is, you know, 
you are going to have to wait 5 hours to get into the United 
States, and that is why this timing is so critical, so that all 
the U.K. business to the U.S. coming in the fall, really 
August-September, doesn't get stymied as we approach that 
period.
    So it is really back to, I believe, an issue--I have sat 
before your subcommittee in the past--about really the U.S. 
marketing effort internationally, and the fact that we are 
rebounding now, we should not lose the fact that we are still 
behind the curve, and with the added security awareness that 
the world has of the United States, it even gives us more the 
reason to get a positive message about not only the American 
way of life but what the real story is on coming to the U.S., 
because U.S. visit is not onerous.
    I have had a number of demonstrations, but I am sure there 
is going to be a fear factor out there starting October 27, 
visitors coming from the U.K., that they are going to be 
waiting in line to get into the United States. It is really the 
ability to balance that message.
    So we desperately need a way to get a positive marketing 
message out.
    Mr. Stearns. And I think you or Mr. Pearson mentioned the 
idea of having some kind of advertising program, much like we 
do for McDonald's or other corporate--IBM. We have the 
government subsidized program for advertising, and I think what 
you are suggesting is something along that line to help. It 
might be difficult.
    We have deficits. But you know, Americans should realize 
that we are getting a trade surplus off this, and when we see 
all the trade deficits in the news--I mean your industry plus 
medical devices plus intellectual property rights and motion 
pictures, we have trade surpluses. In the areas where we can 
compete, we should continue to expand and not just bemoan the 
areas that we have trade deficits but accentuate the positive.
    So your industry is the area that we can do it, and we have 
so much to show. I spent the weekend in Idaho, in northern 
Idaho, and I was just so surprised to see how beautiful it is. 
It is about a half-hour east of Spokane and all the lakes up 
there, and it was just unbelievably beautiful, and there is so 
much that you almost would say to Europeans or to the Pacific 
Rim, you know, the United States is not just one area. There's 
just tons of beautiful areas to see.
    Is there anything that you heard from the Assistant 
Secretary of Border and Transportation Security on policy and 
planning, anything that you heard him say that you would like 
to comment on? I thought he was very articulate and seemed 
willing to answer any questions.
    If you have any questions you would like me to ask on your 
behalf, I would be glad to submit them. We are trying to, 
obviously, expedite the time delays at the airport, 
particularly this registered traveler pilot program that he is 
doing, and see if we can get that more implemented, and also 
point out to him the need to accentuate the positive in this 
Homeland Security, but tourism and trade, like that, is a 
surplus that we would like to accentuate. But is there anything 
you would like to say about his testimony? Yes, Mr. Brown?
    Mr. Brown. Mr. Chair, I just have one comment. I think that 
what was lost a little bit in his presentation was that, yes, 
we are doing a lot of the right things, but we are not asking 
the people that use the products and services, you know, what 
are the shortfalls.
    I came back from Schiphol Airport in Amsterdam last week to 
Newark, and the security clearance was duplicated probably by 
U.S. security people, I imagine, at the gate in Schiphol. But 
you know, as you go through the plane and ask people, they 
said, we would do it again.
    I think that the tragedy is that there were flaws in that 
whole security process, and there are in this country, and 
there's inconsistencies. There are some things that work well 
in some areas, and others----
    Mr. Stearns. So we should do a customer comment?
    Mr. Brown. Well, yes, and we don't need to spend a lot of 
money doing it, a lot of government money. We need to put--In 
my view, we need to put our security--The perception of our 
travelers is that we need to protect the perimeters.
    Ms. Friend makes some good points about airlines should 
train flight attendants, but it is absolutely required that we 
protect the perimeters and that we actually ask the customers 
what they see. They help us with this. That would be the only 
thing I would add to his presentation.
    Mr. Stearns. Thank you. Well, I am ready to close the 
subcommittee. I thank all of you for coming and giving your 
opening statements and answering the questions. I think it has 
been very helpful.
    There will be a written report on this. We have a 
stenographer. So if there's anything you want to add, by 
unanimous consent, we can add later. So again, we will 
continue. We might have another hearing on this matter, and we 
will also look into some of the things, Ms. Friend, that you 
brought up, and I think I will talk to the ranking member, 
because she seemed very interested in following up on your 
comments, particularly making that word from ``may'' to 
``shall'' and see what we can do, because we are most 
appreciative for the flight attendants.
    I see them all day long, and their work is constant, and I 
don't think they are appreciated as much as they should be, and 
to think that they are sort of the unsung heroes in this whole 
thing and were pretty much just left to defend themselves 
without any training, I think, is unfortunate. I think your 
statement is eloquent and important, and it is good that we 
have it for the record.
    With that, the subcommittee will adjourn.
    [Whereupon, at 12:20 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]

 Prepared Statement of Douglas B. Baker, Deputy Assistant Secretary of 
          Commerce for Service Industries, Tourism and Finance

                              INTRODUCTION

    Chairman Stearns, Ranking Member Schakowsky, I would like to thank 
you for your leadership and the leadership of Chairman Barton. I also 
thank you for asking me to testify before you today on a very important 
topic. Your hearing ``Travel, Tourism, and Homeland Security: Improving 
Both Without Sacrificing Either,'' was called just a few weeks after 
the Department of Commerce hosted its own conference.
    On June 10, the Department hosted a conference entitled 
``International Travel to the U.S.: Dialogue on the Current State of 
Play.'' We had hundreds of private sector attendees; three panels 
addressed the issues surrounding temporary entry to the United States 
and took questions from attendees. Several U.S. Government officials 
addressed the audience, including Under Secretary of Commerce for 
International Trade Grant Aldonas, Assistant Secretary of State for 
Educational and Cultural Affairs Patricia S. Harrison, Staff Director 
for the House Committee on the Judiciary Steve Pinkos, and Assistant 
Secretary of Homeland Security for Border and Transportation Security 
Stewart Verdery.
    We organized this conference because we saw that many industries 
were struggling to understand new security measures and were also 
impacted by a perception that they will be unable to get foreign 
visitors into the United States for temporary visits. We taped the 
proceedings. Presentations, transcripts, and supporting documents from 
the conference will be compiled on CD/ROMS for use by the Commercial 
Service and made available to the public, and we will submit copies to 
this subcommittee. Additionally, over the next month, we will review 
the findings and issues from the conference and will post a report on 
our website.

                             SECURITY NEEDS

    The need for border security is a huge geographic challenge to our 
country. We share a 5200 mile border with Canada and a 1900 mile border 
with Mexico. We have more than 300 international land-based ports of 
entry. We also have a maritime system that includes 95,000 miles of 
coastline and navigable waterways that connect us to a global 
transportation network B with over 300 seaports, 429 commercial 
airports, and several hundred thousand miles of highways and railroads. 
The security enhancements have the potential for affecting the movement 
of goods and services.
    Last year, more than 40 million international travelers visited the 
Unites States. They generated over $80 billion in revenue for this 
country through their expenditures. International travel represents the 
U.S.'s top services sector export and has produced a travel trade 
surplus since 1989. However, this trade surplus has decreased from a 
high of $26 billion in 1996 to $4 billion in 2003.
    Overall, based on Department of Commerce data, travel and tourism 
represented $741 billion in direct and indirect sales, the 
international portion totaling over 80 billion in 2003.
    The attacks of September 11, 2001, brought the economic 
contribution of this industry and border security into sharp focus. Our 
goals since then have been to ensure the security of U.S. citizens and 
international visitors and to facilitate legitimate travel and trade B 
all while safeguarding the privacy of visitors to the United States and 
of U.S. citizens and residents.
    Everyone agrees that border security is key to this effort to save 
lives, protect property, and utilize limited government resources 
wisely. We have made great strides in developing the technologies and 
processes to enable this security, to identify those who would do harm 
by employing the best technologies to ensure we are secure, yet still 
able to enter and leave the country easily and safely.
    The Student and Exchange Visitor Information System (SEVIS) 
program, US VISIT, and the development and implementation of biometric 
technologies for visas and passports have all become key steps in 
heightening our security.
    These security measures have made our nation safer, but that is 
only part of the equation. We must also work to facilitate legitimate 
travel. Facilitating legitimate travel to our country is an important 
goal. Foreign travel to the United States provides significant benefits 
to the culture and economy of our nation and promotes freedom and 
democracy across the globe. The Department of Commerce continues to 
work to make the United States a welcoming nation.

    COMMERCE ROLE IN ENSURING ECONOMIC SECURITY WITH BORDER SECURITY

    The Department of Commerce served on the Data Management 
Improvement Task Force formed prior to 9/11, which was predicated upon 
industry and government coordination and made recommendations for the 
improvement of entry and exit systems for this country.
    Since 9/11, the Department of Commerce has been proactive and 
engaged in industry outreach. Secretary Donald L. Evans convened a 
meeting of the leaders of the travel and tourism industry sectors 
within a week of the attacks. Since that time, he has engaged in 
roundtable discussions across the country with a variety of service and 
manufacturing sectors and brought the concerns and issues home to 
interagency efforts.
    The Department of Commerce chairs the Tourism Policy Council (TPC), 
an interagency group composed of 15 government offices and agencies 
dedicated to coordinating policy considerations affecting travel and 
tourism. This Council, and its Working Group, has served as a platform 
for mutual deliberations, industry input and the dispersing of 
information concerning efforts for visa and entry/exit policy changes. 
TPC News Alerts have been issued to Commercial Service officers in 
American embassies to communicate changes and rulings related to 
traveler requirements and documentation to the local population for 
visiting the United States.
    The Department of Commerce's U.S. and Foreign Commercial Service 
works to ensure clear communication from the business community and 
travel and tourism industry on visa and entry and exit policies and 
implementation.
    The Department of Commerce works with the Homeland Security Council 
to ensure that commerce and economic security concerns are duly 
considered during policy deliberations. In this capacity, the 
Department of Commerce also serves on the Welcome to the USA 
International Travel Perceptions Interagency Working Group to 
effectively develop a unified, interagency, strategic communications 
plan that addresses and attracts international visitors to the U.S. for 
education, business, and other commercial or leisure purposes. The goal 
includes: identifying real concerns among potential travelers, 
providing them current facts and figures, educating them about the 
entry and exit processes and above all, assuring these travelers that 
they are indeed wanted and welcomed in the United States.
    One of the most important accomplishments of the interagency 
process was the G-8's accepting and subsequently adopting a 28-point 
action plan for enhancing and coordinating security measures that 
facilitate travel. The Secure and Facilitated International Travel 
Initiative was adopted by the G-8 at the recent meeting at Sea Island, 
Georgia and it will ensure that improvements we make today will be 
adopted by our trading partners tomorrow.

             HOW TO SECURE OUR BORDERS, BUT KEEP OPEN DOORS

    What we need to do is consider the best ways to ensure that we keep 
out the dangerous few, while those with legitimate interests are 
allowed to enter on reasonable terms. The failure to strike this 
balance could result in a situation where the borders are physically 
secure, but at a cost of closing off many critical contacts with the 
rest of the world. Alternatively, no one wishes for our borders to so 
open as to allow those who would do us harm into the country.
    This broader conception of security, includes the critical matter 
of America's global image, and maintaining its strong position as the 
leader in key intellectual and commercial endeavors.
    Our attracting the finest minds from around the world fuels the 
dynamism of the United States and our economy. Indeed, America's 
position in the arts, sciences, and the economy depends on contact with 
foreign students and professors, patients and doctors, businessmen and 
clients, and many innovative others.
    If the best minds can no longer practice science in the United 
States or study in the top universities, or people find it hard to 
practice or receive the best medical treatment, over the longer term we 
lose something important B our position as leaders in our respective 
fields, as the standard for higher education, as pioneers in the 
sciences and technology on which the next economic breakthroughs will 
depend.
    If people cannot visit America and be exposed to the best we have 
to offer, they will go elsewhere, and America's influence will diminish 
over time. The economic impact would also be profound.
    In today's global economy, even those who do not engage in 
international trade are subject to what happens in the international 
markets. Our commercial strength lies in leading and adapting to the 
great changes in business that have produced the global market place.
    If business people cannot visit for training, to close deals, to 
participate in new ventures enabled by trade liberalization, or visit 
to take delivery of major purchases--this hurts the U.S. economy and 
slows the international trends that have contributed to our economic 
growth.
    If our entry policies make it more difficult for suppliers to 
operate, our private sector entities suffer. On the demand side, if our 
policies prevent customers from reaching us, it's the same result.

                      STAKES FOR THE U.S. ECONOMY

    Services exports exceed $270 billion each year, and our perennial 
trade surplus in services was approximately $65 billion last year. Many 
of those services depend on temporary contacts and visits from foreign 
nationals; these visits contribute to human development, culture, and 
mutual understanding. If this inbound channel of contacts becomes too 
difficult, we may lose out to services firms located abroad and find 
ourselves facing something of a brain drain. If the top technical 
people cannot come here, they will go elsewhere. And we'll be the worse 
for it.
    Consider education: International students attending universities 
and training entities were largely responsible for $13.7 billion in 
exports in 2003. A March 2004 Council of Graduate Schools survey 
indicated that the total number of international applications to the 
113 responding graduate schools dropped 32 percent for fall 2004 from 
fall 2003, across all major countries of origin and for all major 
fields. Survey respondents included 60 percent of the top 50 
universities. These 113 schools enroll nearly half of all international 
graduate students in the United States. Among other factors, potential 
student visitors frequently point to new, more stringent visa standards 
as an obstacle to studying in the U.S.
    Losing foreign students means a lost opportunity to expose more 
people to American democracy and culture, which can serve as soft 
diplomacy for peaceful progress.
    In medicine, American hospitals and clinics have long been the 
chosen destination for foreign patients' needing advanced treatment and 
surgery. Hospital revenue from such patients is typically double that 
of foreigners' share of patient volume. So, if 5 percent of a 
hospital's patients are foreign nationals, they typically account for 
10 percent of that hospital's total revenue. This substantial revenue 
stream often finances vital hospital or clinical functions, such as 
care of inner-city patients and medical personnel training.
    Travel and tourism industries contribute an average of 3.5 percent 
to our GDP annually. International travel is the largest services 
export category. In 2003, travel and tourism contributed approximately 
$80 billion in exports, which resulted in a travel trade surplus of 
approximately $4 billion.
    Visa limitations impact a range of services industries, from 
training corporate staff of U.S. firms operating abroad to hosting 
visitors. Temporary entry rules affect how efficiently those activities 
happen, and in turn affect services and manufacturing industries across 
the national economy.
    The tide is turning. In the first quarter of 2004, the U.S. 
welcomed 8 million international visitors. This was an increase of 12 
percent over the same period of 2003. Nineteen of the top 20 visitor 
markets registered gains for the quarter. This follows the 3 percent 
increase from fourth quarter 2003. We must continue to fine-tune our 
entry/exit policies.

                        LINKAGE TO TRADE POLICY

    Visa policies are directly linked to trade liberalization and our 
belief that free trade is beneficial, spreading economic prosperity and 
peaceful governance. Trade negotiations are inseparably linked to these 
issues as well. Great progress has been made in liberalizing trade in 
goods over the years. Today, we aim to increase trade in services, the 
next great threshold for trade liberalization.
    Services represent close to 75 percent of U.S. GDP, but only about 
25 percent of U.S. international trade. Clearly there is room to grow 
this sector, especially in light of the great competitiveness of U.S. 
services providers. Much of the most interesting work in trade policy 
today concerns the development of new trade disciplines that deal with 
services, investment, and the associated intellectual property rights. 
These disciplines are inherently more complex than those related to 
manufactured goods, yet all are taking place against a backdrop of 
falling telecommunications costs and the availability of computers and 
advanced IT equipment and software worldwide.
    All of these developments support openness in international travel 
to match the new openness of international markets. If we develop a 
border security regime that does not permit the necessary contacts and 
visits to deal with trade in complex services, we lose something 
valuable. As Under Secretary Aldonas stated at the Department of 
Commerce conference on June 10th, security must be understood 
comprehensively, so as to preserve our national interests, and 
specifically, our objectives in trade and trade policy.

                              CONCLUSIONS

    Our security needs today are greater than ever before, and they 
must be developed in a comprehensive manner. It is not enough to simply 
secure the borders B we need a comprehensive system that will provide 
unrivaled border security with full provision to allow foreign visitors 
to come to the United States for the many legitimate purposes they 
have.
    The economic stakes are great for many leading edge sectors of the 
American economy, in both services and manufacturing.
    We have all accepted a bit of inconvenience to ensure our safety. 
That is an acceptable trade off. However, we must also work to ensure 
that additional security precautions have a minimal effect on trade and 
economic growth.
    Perhaps even more important over the long term, our position at the 
leading edge of science, technology, education, and the global economy 
as a whole, could be at risk if we close our doors to the many 
legitimate visitors who are exposed to some of the finest 
characteristics of American life and values. This is why we work hard 
to ensure legitimate travelers are welcomed to the United States.
    My office at the Department of Commerce will continue to work 
collaboratively with our colleagues at the Homeland Security Council 
and the Departments of Homeland Security, State, Justice, and 
Transportation. We will continue to be vigilant and ensure that we keep 
our nation safe while welcoming visitors to our country who are such an 
asset to our nation and our economy.

                                 ______
                                 
          Prepared Statement of the Travel Business Roundtable

                              INTRODUCTION

    The Travel Business Roundtable (TBR) would like to thank Chairman 
Stearns and Ranking Member Schakowsky for holding this important 
hearing on the ways in which homeland security regulations are 
affecting the travel and tourism industry, the nation's economy as a 
whole and the image of the U.S. abroad.
    TBR is the pre-eminent umbrella organization for the travel and 
tourism industry. A CEO-based organization, TBR represents the 
industry's broad diversity, with more than 85 member corporations, 
associations and labor groups. The travel and tourism industry is a 
consistent engine for economic development and job creation, employing 
some 17 million Americans with an annual payroll of $157 billion. 
Travel and tourism is the first, second or third largest industry in 29 
states and the District of Columbia. In the last decade, travel and 
tourism has emerged as America's largest services sector export and the 
third largest retail sales industry. The industry is in 50 states, 435 
Congressional districts and every city in the United States.
    No other industry is more affected by the implementation of 
stringent security measures than travel and tourism, and no other 
industry has more to lose should another terrorist attack occur on 
American soil. That being said, TBR vigorously supports the efforts of 
Congress, the Department of Homeland Security, the State Department and 
the Bush Administration to establish and implement laws and regulations 
that will protect our borders, our citizens and our visitors. However, 
it is vital that the government entities that are implementing these 
programs consider their collective impact on the traveling public. 
Being ever mindful of Homeland Security Secretary Tom Ridge's 
admonition about the need to create the proper balance between 
protecting our homeland and promoting free and open commerce, TBR's 
goal is to ensure that the paramount objective of protecting our 
nation's security is pursued in a manner that is effective, coherent 
and does not unnecessarily compromise our nation's economic vitality.

                     IMPACT ON INTERNATIONAL TRAVEL

    International travel is one of the largest exports for the U.S., 
ranking ahead of agricultural goods and motor vehicles, and it is the 
largest services sector export category. It continues to be an engine 
for economic development, directly generating payroll revenues of more 
than $23 billion and tax revenues of more than $13 billion in 2003. 
International visitors spend more and stay four times longer than their 
domestic counterparts. However, according to the U.S. Department of 
Commerce, the number of international travelers to the U.S. dropped 
from 41.9 million in 2002 to 40.4 million in 2003. This is a sharp 
decline from 2000, when a record 50.9 million international visitors 
traveled to the U.S. At the same time, our travel trade surplus, which 
peaked at $26.3 billion in 1996, has plummeted to $4 billion in 2003. 
With every 1 percent drop in international arrivals to the U.S., 
172,000 jobs are lost and $1.2 billion in tax revenue is left 
unrealized. These numbers simply cannot be permitted to continue to 
decline.
    TBR commends the efforts of Homeland Security Secretary Tom Ridge, 
Special Assistant for the Private Sector Alfonso Martinez-Fonts and 
others at the Department of Homeland Security for their cooperative 
efforts with our industry to achieve a balance between our national 
security and the free flow of commerce. They have taken on the 
difficult task of protecting our nation while simultaneously serving as 
passionate proponents for vibrant domestic and international travel 
growth, among both business and leisure travelers.
    Among the many concerns TBR has with respect to balancing security 
and travel, an immediate one is the impending biometrics deadline for 
Visa Waiver Program (VWP) countries. Currently, the 27 nations in the 
program--many of whom are our closest allies--are uncertain if they 
will soon be required to obtain visas to travel to the U.S. On June 14, 
legislation that would delay the deadline until 2005 was passed on the 
House floor. TBR supports this effort as a good first step but believes 
that time is running out. While the U.S. government debates whether a 
one- or two-year extension is more appropriate, our international 
competitors are using this uncertainty to challenge our portion of the 
international market share. Likewise, these countries are spending 
millions of dollars to attract those same travelers that might 
otherwise come to the U.S. For instance, the Australian government just 
announced a new global marketing campaign to increase travel to and 
within Australia, committing more than $600 million (AUS) over the next 
four years to tourism promotion. If it hopes to retain--let alone 
grow--market share, the U.S. will have to put forth a greater effort 
and make a financial investment to attract international travelers. The 
messages of confusing and cumbersome entry requirements are having just 
the opposite effect, and once patterns of travel have changed, it will 
be extremely difficult and expensive to bring international visitors 
back.

                          BIOMETRIC PASSPORTS

    The rapidly approaching October 26, 2004 deadline requiring 
travelers from VWP countries to present passports containing biometric 
identifiers was established in the Enhanced Border Security and Visa 
Entry Reform Act of 2002, and as a statutory requirement, can only be 
modified by congressional action. While TBR strongly supports efforts 
by Congress and the Administration to implement this program as an 
additional means of strengthening security at our nation's borders, we 
are concerned that doing so without the necessary technological 
resources could compromise that security and cause harm to the travel 
and tourism industry, our bilateral relationships and the nation's 
image around the world.
    VWP countries are among our closest allies and largest trading 
partners, representing 68 percent of all overseas visitors to the U.S. 
in 2002 and spending approximately $38 billion in our country. Without 
a delay in the passport deadline, VWP travelers will be required to 
apply for visas to travel to the U.S., thus increasing FY05 visa 
applications to almost double the FY03 demand. As a consequence, and in 
addition to a $100 visa fee, these visitors will most likely be 
subjected to the additional scrutiny and hassle of the visa process, 
which has already experienced heavy backlogs and turned away legitimate 
travelers. The State Department has testified on numerous occasions 
that it would not have the resources to process this additional 
workload.
    On January 28, 2004, Assistant Secretary of State for Consular 
Affairs Maura Harty testified before the House Select Homeland Security 
Subcommittee on Infrastructure and Border Security that VWP countries 
were given only 17 months' notice to comply with the biometrics 
requirement--a process that normally takes years for a nation to 
research, develop and implement. Reports from the United Kingdom and 
Japan, among many other affected countries, show that they will be 
unable to technologically comply with this requirement until late 2005 
at the earliest. Moreover, the few manufacturers that produce the 
technology these countries need to fulfill the biometrics requirement 
have indicated that they cannot meet the demand in such a short 
timeframe, and given the time constraints, would be unable to vouch for 
the security of the biometric information contained in the passports. 
For these reasons, the travel and tourism industry feels a great sense 
of urgency to delay the deadline. It is noteworthy that even the United 
States, which is not required to comply with this requirement, will not 
be prepared to issue biometric passports until 2005. This suggests that 
we are asking our allies to conform to deadlines that we ourselves 
cannot meet.
    TBR is heartened that Administration officials understand the 
importance of addressing this issue. In a March 17th letter that 
Secretary Ridge and Secretary of State Colin Powell sent to House 
Judiciary Committee Chairman Jim Sensenbrenner, they requested a two-
year extension of the biometrics deadline for VWP citizens. Secretaries 
Ridge and Powell voiced their own fears that if the deadline is not 
extended, ``travelers will vote with their feet and go elsewhere.''
    The introduction of S. 2324 by Senate Judiciary Committee Chairman 
Orrin Hatch (R-UT) and Immigration Subcommittee Chairman Saxby 
Chambliss (R-GA) and Ranking Member Edward Kennedy (D-MA), among 
others, requesting a two-year extension, and H.R. 4417 by Chairman 
Sensenbrenner and others, requesting a one-year extension, are both 
evidence that those with jurisdiction over this issue are taking it 
very seriously. TBR is deeply grateful to these Members of Congress and 
the other co-sponsors. On behalf of the international traveling public, 
TBR urges Congress to take quick action to reach a consensus that will 
establish a workable deadline for VWP countries. It is crucial that 
Congress enact legislation extending this deadline in an expeditious 
manner to ensure that the affected countries can plan accordingly and 
so that potential travelers from those countries, who are deciding now 
where to travel in the fall, have sufficient notice of what will be 
required of them. The absence of certainty about security measures is 
hurting the U.S. in the international marketplace, and our competitors 
abroad are using this uncertainty against us. We are concerned that 
potential international travelers to the U.S. will decide to travel 
elsewhere if the deadline is not soon delayed.
    TBR believes that the VWP is a valuable component of our 
relationship with participating countries. Moreover, many believe that 
abandoning the VWP would significantly impair our nation's economic 
activity. The VWP facilitates tourism and trade with our allies around 
the world. Members of the program undergo biennial reviews by DHS, with 
help from the State Department. Such reviews are currently being 
conducted and will be completed by July 15, 2004.
    The Department of Homeland Security announced recently that it 
would further secure the VWP by enrolling all visitors from 
participating nations in the US-VISIT program upon their entry to the 
U.S. by September 30, 2004. To date, our friends who participate in the 
VWP have been agreeable to the changes in the their travel procedures, 
and we must continue to nurture these relationships. It is imperative 
that Congress grant VWP countries sufficient time to comply with the 
deadline for biometric passports. In working cooperatively with these 
countries, we can simultaneously guard our borders and our economy.

                                US-VISIT

    The US-VISIT program was implemented at 115 airports and 14 
seaports in January and requires international visitors holding visas 
issued by U.S. consulates overseas to submit digital finger scans and a 
digital photograph upon entry into the United States. These biometric 
readings are then matched against the existing visa files and national 
and international watch lists. TBR is pleased to learn from DHS that 
US-VISIT has matched more than 500 travelers attempting to enter this 
country against criminal databases and has stopped approximately 200 
criminals or suspected criminals from crossing our borders. TBR is also 
pleased that no significant delays in the process have been reported to 
date.
    While TBR supports the enrollment of VWP travelers in the US-VISIT 
program as an additional security measure, we are concerned about how 
efficiently the system will function when these estimated 13 million 
travelers are added this fall. DHS Undersecretary for Border and 
Transportation Security Asa Hutchinson testified before the Senate 
Judiciary Committee on June 15 that the infrastructure in place will 
continue to function efficiently and accurately through the expansion. 
However, the General Accounting Office (GAO) recently reported that 
inadequate testing had been done on the system prior to implementation 
in January. TBR hopes that these problems have been rectified and that 
the system is prepared to efficiently accommodate such a large volume 
increase.
    We are encouraged by the effectiveness of the entry portion of US-
VISIT to date. However, the deadline to integrate US-VISIT procedures 
at the 50 busiest land border ports of entry (POEs) is December 31, 
2004. While DHS officials have said that they are on track to meet this 
deadline, it is essential that our land borders be adequately staffed 
and technologically capable to accurately screen those entering without 
creating gridlock at our borders.
    The exit component of US-VISIT has been in place at one airport and 
one seaport since January. However, this test phase has not proven to 
be as successful as the implementation of the entry portion. Additional 
testing of the exit component is necessary in order for DHS to create a 
process that is user-friendly and accurate. While it is important that 
the government know when a visitor has overstayed his or her allotted 
time frame, it is also important that we not confuse travelers with a 
complex procedure or burden airline employees to assist in performing 
this task. US-VISIT, while successful thus far in implementation, has 
many more hurdles to overcome, and the travel and tourism industry is 
ready and willing to assist DHS in any way possible.
    As the Customs and Border Protection (CBP) inspectors administering 
the US-VISIT system--and all of our immigration and customs inspection 
processes--are some of the first faces international visitors see as 
they step foot on American soil, it is imperative that they maximize 
the opportunity to create a positive first impression with these 
travelers. Just because the focus is on security, that does not 
preclude common hospitality. To these visitors, who have likely heard 
negative stories about entry into the U.S., a friendly welcome and a 
smile could be enough to turn a trip into a successful, enjoyable and 
repeatable travel experience.

                            VISA PROCESSING

    Released earlier this month, a survey conducted on behalf of eight 
U.S. international business groups, including the Association of for 
Manufacturing and Technology (AMT), the National Foreign Trade Council 
(NFTC) and the U.S.-China Business Council (USCBC), estimated that U.S. 
exporters have lost more than $30 billion in revenue and indirect costs 
over the past two years due to delays in visa processing for foreign 
business travelers. Of over 700 companies surveyed, 60 percent said 
that business travel visa delays had hurt their companies through lost 
sales and increased costs. In May, at the second annual Travel and 
Tourism Summit co-sponsored by TBR and the U.S. Chamber of Commerce, 
Secretary of State Colin Powell acknowledged that more still needs to 
be done to welcome travelers to the U.S. ``Openness is fundamental to 
our success as a nation, economically, culturally and politically. Our 
economy will sputter unless America remains the magnet for 
entrepreneurs from across the world,'' he said in an April 21st 
editorial in The Wall Street Journal. Legitimate business travelers, 
and leisure travelers as well, must not be locked out of our country by 
an understaffed or arbitrary visa process, and that process must not 
continue to deter U.S. economic growth.
    TBR was heartened to hear State Department reports that staffing at 
overseas consular posts has increased, and we hope that this will help 
meet visa demand in a manner that is timely and systematic. Over the 
past three years, the visa process, which requires in-person 
interviews, a $100 fee and travel to sometimes-distant consular 
offices, has become burdensome to international travelers. The expense 
and uncertainty is creating a negative image abroad and is causing the 
U.S. to lose these travelers to other countries as well as lose out on 
important business opportunities. TBR encourages the State Department 
to increase its outreach to U.S. embassies abroad and to continually 
update its website to give clear, factual and timely information about 
the requirements involved in traveling to the U.S. so that potential 
visitors know what to expect, can plan accordingly and feel welcomed as 
they travel to the U.S. Communication is the key to opening our doors 
to our friends abroad.

                     DESTINATION MARKETING FUNDING

    As a direct result of Senate Appropriations Committee Chairman Ted 
Stevens' (R-AK) leadership, the FY03 Consolidated Appropriations 
Resolution funded a $50 million destination marketing campaign whose 
goal it was to increase inbound international arrivals from five of our 
largest international markets--Canada, Mexico, Japan, Germany and the 
United Kingdom. Two unfortunate rescissions in the Consolidated 
Appropriations Act of FY04 reduced the available pool of dollars to $6 
million and a focus on only one country, the UK. Continued 
international uncertainty about visa obligations, coupled with an 
anemic federal destination marketing effort, conspires to continue to 
disadvantage us amongst the lucrative and bourgeoning international 
travel market. Confusion among international travelers about the ease 
of travel to the U.S. is dissuading many from making the trip. To these 
travelers, perception is reality, which is in turn reflected in real 
consequences for our economy.

                               H-2B VISAS

    The issuance of H-2B visas, which facilitate the travel of seasonal 
non-agricultural workers to the U.S. to fill temporary unskilled 
positions that employers are largely unable to fill with American 
workers, ended when its cap of 66,000 was reached in March. The travel 
and tourism industry urged Congress to increase the cap because many 
seasonal employers had not yet staffed their businesses for the coming 
summer travel season. Although legislative solutions were sought, an 
agreement has not yet been reached; attempts to save the summer of 2004 
for these businesses have been futile. Non-immigrant workers, many of 
whom rely on U.S. employment summer after summer, could not be granted 
visas because of the cap. TBR anticipates that many small businesses 
will be left inoperable or operating at less than full capacity during 
the busy summer months. A legislative remedy must be reached before 
these businesses are forced to suffer harsh economic losses for another 
summer.

                          REGISTERED TRAVELER

    Homeland security policy not only affects international travel to 
the U.S., but also can serve to delay and frustrate domestic travelers. 
Passenger screening lines at some of the nation's busiest airports have 
taken hours to go through. One proposed remedy is the Registered 
Traveler program, whose pilot phase was announced on June 16 by the 
Transportation Security Administration (TSA). Slated to begin on a 
voluntary basis later this month in Minneapolis, the program will ask 
participating travelers for personal information, have their names 
matched against existing government databases, have their fingerprints 
taken and irises scanned. The same basic screening procedures will 
apply to these passengers, but they will be exempt from checks in 
secondary screening. TBR supports the development of this program, as 
it expedites the screening process for patrons of the airline industry 
without compromising airline security.

                                CAPPS II

    The Computer Assisted Passenger Pre-Screening System (CAPPS II) 
initiative has undergone serious scrutiny recently. As a fully 
functioning system, CAPPS II would require airlines to provide personal 
information to the government on all passengers traveling through the 
U.S. Risk assessment technology would then rank passengers according to 
their possible threat to security and assign them to one of three risk 
categories--acceptable, unknown or unacceptable. According to homeland 
security appropriations legislation that is currently pending in the 
House and Senate, CAPPS II will not receive further federal funding 
until certain privacy requirements set by DHS and the General 
Accounting Office (GAO) have been met. TBR is supportive of efforts by 
congressional appropriators to ensure that TSA is held to the highest 
standards of transparency and conducts thorough due diligence as it 
seeks to develop and implement an effective program. It is imperative 
that the U.S. refrain from putting in place any security measures that 
have not been adequately tested.

                      AIRPORT STANDARD PROCEDURES

    TBR is fully aware that TSA is working diligently to provide the 
tightest security possible at our nation's airports. We recognize that 
the task before them is a daunting one and applaud their efforts to 
date. However, the lack of standardization of screening procedures 
among the nation's airports confuses and frustrates travelers. From the 
screening of checked baggage to the submission of identification cards 
at check-in and at the gate, the experience is always different from 
airport to airport. TBR believes that informing passengers of what to 
expect at each airport and ultimately establishing consistency among 
the airports will make the process go more smoothly for both passengers 
and screeners.

                             RAIL SECURITY

    Last month, DHS issued a directive outlining minimum federal 
security standards for the nation's passenger rail systems and other 
mass transit systems. TBR commends DHS for recognizing the need to 
implement security measures for our nation's rail systems. A passenger 
and baggage screening pilot program was tested in New Carrollton, 
Maryland in May, and here at Washington's Union Station, screening of 
baggage is now underway. We encourage Congress to work with DHS to 
ensure that America's railways are safe from terrorist threats and are 
able to financially provide that security to its passengers. We further 
urge Congress and the Administration to remove all funding barriers and 
make intercity passenger rail eligible for the grants funds available 
to assist commuter properties in enhancing their security.

                          INFORMATION SHARING

    Recent events have unfortunately placed one segment of the travel 
and tourism sector, the shopping center industry, in the spotlight as a 
target for a terrorist attack. In April there was a phone threat of an 
alleged terrorist bomb at a Los Angeles mall. Two weeks later WNBC-TV 
in New York ran a news story that local shopping malls in the Tri-State 
area were on high alert for terrorist activity following the reported 
release of DHS bulletins and classified documents warning of such 
events. Last week Attorney General Ashcroft gave a press conference 
about a Somali immigrant who had been trained in terrorist camps and 
had hatched a plan to attack a Columbus, Ohio mall. Thankfully, none of 
the alleged attacks or incidents became reality. Yet sadly, stories 
like these will continue to make the news. While we respect the 
public's right to know and the valid concerns about security, we would 
strongly encourage DHS to become more pro-active and sensitive to the 
public relations aspect of its terror alerts and to carry over that 
sensitivity to those conducting press briefings. Clearly this is an 
area where DHS must direct more resources. We would recommend that DHS 
extend its communications outreach with the shopping center industry 
and other relevant business sectors when situations occur.
    When the incidents mentioned above unfolded, DHS's interaction with 
the shopping center industry was inadequate. For example, the day after 
the WNBC-TV news story aired, the trade association for shopping 
centers contacted the Private Sector office at DHS. Neither that office 
nor the Public Affairs office knew of the news report and to date has 
not provided a written explanation of the information contained in it. 
The experiences with the Department can be best described as a series 
of disconnects. TBR believes that information sharing between the 
government and the private sector is a critical component in 
safeguarding our nation against terrorist threats but one that demands 
improvement and better coordination.

                        TERRORISM RISK INSURANCE

    The provision of the Terrorism Risk Insurance Act (TRIA) of 2002 
requiring insurance companies to make terrorism insurance available on 
the same terms and conditions as property and casualty insurance was 
set to expire at the end of 2004. Treasury Department Secretary John 
Snow's recent announcement of the extension of the ``make available'' 
provisions of TRIA through the end of 2005 was most welcome.
    Following the terrorist attacks of September 11, insurance coverage 
for terrorist acts was largely unavailable, thus affecting billions of 
dollars of commercial real estate and threatening the potential 
economic activity that would come with creating new shopping malls, 
hotels, sports stadiums and other public spaces. The ``make available'' 
provision created by TRIA stabilized the insurance market and would 
have been devastating to the economy should it have expired. Further, 
TBR encourages Congress and the Administration to work together to 
extend TRIA beyond 2005 so that the marketplace for terrorism risk 
insurance and the economic stability it provides can be sustained.

                               CONCLUSION

    Clearly, there are myriad homeland security policy measures that, 
while aiming to protect our homeland, are simultaneously having a 
negative impact on our country's image, industries and economy. 
International travelers and domestic travelers alike are confused about 
what will be required of them to visit America. Uncertainty about 
airport screening procedures and visa and passport requirements, 
combined with a lack of communication and a large-scale marketing 
campaign, are discouraging travelers from making the effort to come to 
the U.S. It is incumbent upon Congress, the Administration and the U.S. 
travel and tourism industry to work together to show potential 
international visitors that travel to this country is both achievable 
and desirable. Through careful implementation of policy procedures, 
effective communication and hospitable execution of those procedures, 
we can revitalize the travel and tourism industry while safeguarding 
our nation's borders. In doing so, we can reshape our nation's image, 
bolster its economy and workforce, and attract travelers back to the 
safe and welcoming United States. TBR appreciates the efforts to date 
of this Subcommittee, as well as other congressional stakeholders and 
Administration officials, and we pledge to work with all interested 
parties to make this goal a reality.

                               MEMBERSHIP

    Jonathan M. Tisch, Chairman, Travel Business Roundtable, Chairman & 
CEO, Loews Hotels; Affinia Hospitality; Air Transport Association; 
American Airlines; American Express Company; American Gaming 
Association; American Hotel & Lodging Association; American Resort 
Development Association; American Society of Association Executives; 
Amtrak; Asian American Hotel Owners Association; ASSA ABLOY 
Hospitality; Association of Corporate Travel Executives; Business 
Travel News; Capital Management Enterprises; Carey International; 
Carlson Hospitality Worldwide; Cendant Corporation; Choice Hotels 
International; The Coca-Cola Company; Commonwealth of Puerto Rico; 
Delaware North Companies Inc.; Detroit Metro Convention and Visitors 
Bureau; Diners Club International; Fairmont Hotels & Resorts; FelCor 
Lodging Trust; Four Seasons Regent Hotels & Resorts; Greater Boston 
Convention & Visitors Bureau; Greater Fort Lauderdale Convention & 
Visitors Bureau; Greater Miami Convention & Visitors Bureau; Gucci; The 
Hertz Corporation; Hilton Hotels Corporation; Hotel Employees and 
Restaurant Employees International Union; HRW Holdings, LLC; Hyatt 
Hotels Corporation; Inc Magazine; InterActiveCorp; InterContinental 
Hotels Group; International Association of Convention and Visitors 
Bureaus; International Council of Shopping Centers; International 
Franchise Association; Interstate Hotels & Resorts; Interval 
International; JetBlue Airways Corporation; Las Vegas Convention & 
Visitors Authority; Loews Hotels; LA INC, The Convention and Visitors 
Bureau; Lufthansa Systems North America; Mandalay Resort Group; 
Marriott International Inc.; Maryland Office of Tourism Development; 
McDermott, Will & Emery; The Mills Corporation; Nashville Convention 
and Visitors Bureau; National Basketball Association; National Business 
Travel Association; National Football League; National Hockey League; 
National Restaurant Association; Nederlander Producing Company of 
America; New York University; Northstar Travel Media, LLC; NYC & 
Company; Omega World Travel; Pegasus Solutions, Inc.; Philadelphia 
Convention and Visitors Bureau; PricewaterhouseCoopers, LLP; Smith 
Travel Research; Starwood Hotels & Resorts; Strategic Hotel Capital 
Inc.; Taubman Centers, Inc.; Tishman Construction Co.; United Airlines; 
Universal Parks & Resorts; United States Chamber of Commerce; United 
States Conference of Mayors; USA Today; Vail Resorts, Inc.; Virginia 
Tourism Corporation; Walt Disney Parks and Resorts; Washington D.C. 
Convention and Tourism Corporation; Waterford Group, LLC; WH Smith USA; 
World Travel and Tourism Council; Wyndham International; and Zagat 
Survey, LLC.

                                 ______
                                 
    Prepared Statement of The Travel Industry Association of America

    The Travel Industry Association of America (TIA) submits the 
following comments for the record, and commends the Subcommittee for 
holding a hearing on a topic of considerable importance to the U.S. 
travel and tourism industry.
    TIA is the national, non-profit organization representing all 
components of the $585 billion U.S. travel and tourism industry. TIA's 
mission is to represent the whole of the travel industry to promote and 
facilitate increased travel to and within the United States. Our more 
than 2,000 member organizations represent every segment of the industry 
throughout the country.
    International business and leisure travel to the U.S. is a vital 
component of our national economy. In 2002, over 42 million 
international visitors generated $83.5 billion in expenditures, $12 
billion in federal, state and local tax revenue, and accounted for one 
million jobs nationwide. International travel and tourism to the U.S. 
is a service export, and in 2002, generated a positive balance of trade 
of $5.5 billion.
    International visitation has continually declined over the past 
three years. Overseas travel to the U.S. was down 31.8% in 2003 
compared to 2000 levels. This decline has drastically reduced the flow 
of tax revenue to all levels of government and reduced our 
international balance of trade. Since 2000, the loss of international 
travel to the U.S. has cost our economy $15.3 billion in expenditures.
    The decline in travel is due to a variety of reasons, including 
fear of travel because of terrorism, a downturn in the global economy 
and confusion over new U.S. visa and border security procedures. While 
some of the causes are beyond the reach of an individual country, 
actions by the U.S. government can either enhance or harm our nation's 
ability to attract increased international travel to the U.S. and 
create more jobs and economic opportunities for states and cities 
across the country. For this reason, it is imperative that the federal 
government continue to move in the direction of advancing homeland 
security in a manner that does not deter legitimate international 
visitors from entering the U.S. for business or pleasure.
    There is no industry more interested in working to prevent a repeat 
of the tragic events of September 11, 2001. The U.S. travel industry 
lost valued employees that day, and saw tens of billions of dollars of 
spending vanish overnight. Some businesses went bankrupt and 350,000 
tourism-related jobs were lost in the aftermath of those horrible 
actions.
    Protecting the homeland from further attacks remains one of the 
government's most important functions, and TIA and the U.S. travel 
industry continue to cooperate with all branches of government to do 
our part in this effort. Homeland security is, indeed, everyone's 
business.
    Yet, there must be way to protect this nation while continuing to 
welcome all international visitors. We are heartened by the 
Administration's recent pronouncements that they now realize there must 
be some ``adjustment to the adjustments'' concerning border security 
and new requirements that only serve as a disincentive for 
international visitors.
    Any movement in the direction of further closing our borders and 
isolating the U.S. from the rest of world would create greater risk and 
not maker our nation safer. This would only serve to transform the 
perception of ``Fortress America'' into reality. Such a restrictive 
security atmosphere would jeopardize our ties with key nations and 
create severe economic hardships for thousands of American workers. For 
these reasons, we must continue to seek greater homeland security and 
improved economic security, all the while continuing to engage in the 
world marketplace of commerce, ideas and cultural exchange.
    While the outlook for international travel to the U.S. for 2004 is 
quite positive, TIA remains concerned about a number of issues related 
to homeland security.

US-VISIT
    The first of these involves the US-VISIT (U.S. Visitor and 
Immigrant Status Indicator Technology) program, which TIA and the U.S. 
travel industry strongly support. The program at airports and seaports 
has proven to be quite successful in providing another layer of border 
security, while continuing to process travelers in an efficient manner.
    There still remain some concerns regarding US-VISIT, such as the 
slowness in deploying ``exit'' control at more airports and seaports, 
and the potential for delays involving arriving visitors where there is 
insufficient staffing to allow for processing in less than an hour's 
time. We also have some concerns about implementation of US-VISIT along 
the U.S. land borders with Canada and Mexico. However, we have great 
confidence in the US-VISIT leadership team, and believe they will 
continue to operate the program in a business-like manner, continuing 
to seek input from the travel and business community and other affected 
stakeholders.

Visa Waiver Program--Biometric Passport Extension
    TIA continues to believe the Visa Waiver Program must be continued 
and utilized to its maximum potential in order to continue facilitating 
travel from most of our largest markets. To that end, the extension of 
the biometric passport requirement deadline for the 27 Visa Waiver 
Program countries is one of the top legislative priorities for the U.S. 
travel industry in 2004. We are pleased with the leadership shown by 
House Judiciary Committee Chairman Sensenbrenner and Ranking Member 
Conyers, and also appreciate the good work of Senators Chambliss, 
Kennedy and others in the Senate to move legislation forward to extend 
this deadline. We remain confident this will occur, avoiding any 
disruption in the more than 13 million international travelers who 
enter the U.S. annually through this vital program.

Visa Waiver Program--Machine-Readable Passport Requirement
    Another important requirement has already been extended for one 
year through the good work of the Administration. This is the 
requirement that all Visa Waiver Program travelers possess a machine-
readable passport (MRP) to enter the U.S. after October 26, 2004. The 
original deadline was October 1, 2003, but Congress wisely permitted 
the Administration to exercise some administrative flexibility with 
this provision.
    While the MRP requirement helps to enhance border security as Visa 
Waiver travelers enter the U.S., the remaining problem is that in some 
of the VWP countries a substantial portion of the population does not 
yet have a newer, machine-readable passport. TIA is currently exploring 
ways to work with the Departments of Homeland Security and State to 
raise awareness of this approaching requirement. More aggressive and 
pro-active outreach and communication by both the public and private 
sector concerning these new rules and requirements is necessary in 
order to raise awareness, improve understanding, and increase 
acceptance by prospective international visitors.

Inspector Staffing Levels and Customer Service Training
    Earlier in this testimony we briefly refer to concern over 
insufficient numbers of front-line (Customs and Border Protection, or 
CBP) inspectors and the impact this can have on wait times for inbound 
international travelers. A combination of a weakened U.S. dollar and 
renewed confidence in international travel to the U.S. has resulted in 
higher levels of inbound travel into the U.S. in 2004. The travel 
industry remains concerned that the Department of Homeland Security 
does not have sufficient inspection staff to avoid long delays at peak 
arrival times. This could result in international visitors missing 
connecting flights or beginning their itineraries behind schedule. A 
one or two hour wait upon arrival in the U.S. is not an appropriate 
beginning for international visitors who plan to remain in the U.S. and 
spend several thousand dollars supporting the U.S. economy and 
employing American workers.
    In addition to the matter of sufficient staffing levels, there 
remains concern about customer service training for CBP inspectors. 
These inspectors are there to enforce immigration laws and determine 
the admissibility of foreign nationals seeking entry to the U.S. But, 
they also serve as front-line ambassadors for the United States. Their 
level of courtesy and professionalism can either benefit or harm the 
U.S. image and possibly determine if that visitor will return to the 
U.S. for subsequent trips. It is critical that all inspectors at 
airports, seaports and land border crossings conduct themselves with 
the greatest level of professionalism at all times. This happens 
through improved and more frequent training in customer service 
strategies. The U.S. travel industry has many of the leading companies 
in the U.S. whose personnel are out on the front lines dealing directly 
with customers, and many of these companies are willing to assist the 
U.S. government in learning how to teach these ``hospitality'' 
techniques and strategies to inspectors.

Visa Issuance Process--Delays and Costs
    While at most visa-issuing posts abroad (consulates and embassies) 
there are not significant delays in issuing non-immigrant visitor visas 
(B-1/B-2), there are still nearly twenty or so posts where the wait 
time to secure a personal appearance interview exceeds 30 days. While 
we are pleased this is not the norm at most consulates and embassies, 
wait times--and the perception of long wait times--can still serve as a 
disincentive for some travelers to come to the United States.
    TIA is working directly with the Department of State to address 
some of these ``perception'' issues and help make the case worldwide 
that wait times for typical non-immigrant visitor visas are minimal. 
While the private sector can do its part to help dispel myths and 
rumors, it is up to the federal government to address actual wait time 
problems, customer service, and training issues for consular officers. 
Additionally, mandatory in-person interviews are having a negative 
impact. Now prospective travelers must invest greater time and expense 
in taking a trip to a U.S. consulate or embassy for the purpose of 
securing a visa to take the ``ultimate trip'' to the U.S. While we 
acknowledge this is a difficult balancing act, the in-person interview 
and now collection of biometric identifiers from applicants is a burden 
on those seeking to travel to the U.S. for business or pleasure. The 
federal government must think creatively about ways it can achieve both 
enhanced security and ease of use in the area of visa issuance.
    In closing, TIA believes there are any numbers of ways the private 
sector and government can work together to continually improve homeland 
security while at the same time making sure the welcome mat is out for 
international visitors. This is oftentimes referred to as a matter of 
balancing homeland security with economic development. It is has also 
been suggested as less a balancing act and more a matter of committing 
to achieve both goals simultaneously.
    TIA and its more than 2,000 member organizations are committed to 
doing all it can to help make this nation, its citizens and its 
international guests as safe and secure as possible. We call on the 
federal government to continue a commitment to homeland security in a 
way that also facilitates legitimate international travel in order to 
provide for economic growth and jobs, cultural enrichment and an 
improved image of the U.S. abroad. This is the proverbial ``win-win'' 
which we all seek and which our country must have during these new and 
challenging times.

                                 
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