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Benjamin Spillman

Stimulus could hurt Las Vegas

16 February 2009

LAS VEGAS, Nevada -- An amendment to the $787 billion economic stimulus bill could have some unpleasant fallout for Las Vegas.

Specifically, it calls for the government to decide what is or isn't legitimate business travel.

The amendment by Sen. Chris Dodd, D-Conn., calls for the secretary of the Treasury to write rules that would define "excessive expenditures" on behalf of companies that will or have already accepted taxpayer money, referred to as TARP funds.

That could make life more difficult for resorts in Las Vegas, which host more than 22,000 business meetings annually that directly sustain about 43,000 jobs.

"Having government in the business of micromanaging corporate travel patterns is a very dangerous trend," said Geoff Freeman of the U.S. Travel Association. "It is dangerous not just to travel, it is dangerous when it comes to stimulating the economy. It is the anti-stimulus."

Jon Summers, a spokesman for Sen. Harry Reid, D-Nev., defended the amendment.

"Nevada taxpayers agree that it is reasonable to ensure that a company that receives TARP funding uses it in an appropriate manner," Summers said via e-mail.

When asked whether the definition of luxury the amendment calls for would include resorts such as Wynn Las Vegas, Palazzo, Bellagio or others on the Strip, Summers responded: "That's up to the secretary, who has oversight of the TARP funds."

If the amendment holds up -- it was included in the final language of the bill -- it could be bad news for Las Vegas, which is home to numerous luxury resorts that cater to business travel.

According to the Las Vegas Convention and Visitors Authority, meetings and events generate an estimated $8.5 billion annually for the local economy.

They were the subject of heated discussion earlier this week when Las Vegas Mayor Oscar Goodman criticized President Barack Obama for singling out travel to Las Vegas as a symbol of wasteful corporate behavior that shouldn't be allowed, "on the taxpayers' dime."

Freeman says Obama's comment is typical of a growing tendency of politicians to single out business travel when seeking to scold leaders of troubled corporations.

In recent days corporations such as Wells Fargo, Goldman Sachs and State Farm have backed out of planned meetings in Las Vegas that would have generated thousands of room nights and millions of dollars in economic activity -- money that makes its way to the pockets of valets, bellmen, restaurant servers and taxi drivers.

"There is a great fear in the marketplace. We think this has potential to make matters worse," Freeman said. "It is time for the politicians to stop grandstanding."