Trump Should Reverse Obama's EB-5 Visa Regulations
Since taking office, President Trump has kept his campaign promises to eliminate Obama-era regulations that hurt our economy and hinder job creation. But EB-5 investor visas are another story. The debate over illegal immigration appears to be clouding the judgment of senior administration officials who are intent on derailing a successful government program that pumps billions of dollars directly into our economy.
The EB-5 program is an investor-based employment visa that was created in 1990 to help stimulate foreign investment. The minimum requirements for individuals to secure such a visa are quite high. Applicants must invest $1 million or $500,000 if the project is located in a “Targeted Employment Area,” typically rural areas or regions with high unemployment. Furthermore, investments must be in ventures that will create or preserve at least 10 U.S. jobs per applicant. In return for these direct investments into the U.S. economy, applicants are granted residency status and a path toward eventual citizenship.
According to a recent study, similar investor-related visa programs are also quite common throughout the world, including in Canada, the U.K., and nearly half of the countries in the European Union — and for good reason. The evidence shows that the EB-5 program has exceeded expectations and should be further expanded, not constrained by more burdensome regulations.
Last year, the U.S. Department of Commerce published an analysis of the EB-5 program that looked at projects active in 2012 and 2013. The findings show that projects in this small window generated total investment of $16.4 billion and created nearly 170,000 new jobs. The authors also found that each immigrant investor generated 16 new jobs, or 60 percent more jobs than the minimum requirements of the EB-5 program. And in January, the American Action Forum published a report noting EB-5 immigrants accounted for $20 billion in direct economic investment since 2008 and over $5 billion in 2017.
EB-5 is clearly working as intended. In fact, there is a strong case for expanding the program, as EB-5 visas only account for 10,000 of the 140,000 employment-based visas granted annually. And those caps, created by Congress, have not been adjusted since 1990, even though our economy has since doubled in size. Yet in the rulemaking blitz that occurred in the last days of the Obama presidency, the last administration proposed new rules on EB-5 that could gut the program’s effectiveness by significantly raising the minimum investment requirements to $1.35 million, or nearly triple the current minimum.
Bizarrely, the Trump administration is moving forward with these new regulations. Kathy Nuebel Kovarik, chief of Policy and Strategy at U.S. Citizenship and Immigration Services, reiterated in a speech two weeks ago that the administration plans to finalize the Obama-era EB-5 rules this year, including increasing the investment minimums. This position is in direct contrast with President Trump’s campaign promises and will only serve to severely weaken a program that is helping grow our economy.
It’s true that there have been some issues with the EB-5 program’s Regional Centers, which allow immigrant investors to pool funds with others, typically to finance larger projects. However, any reforms to EB-5 should be implemented through legislation, not regulation, as several Republican Senators noted in a letter last year to then-DHS Secretary John Kelly. And while the Senators acknowledged the Regional Centers aren’t perfect, they correctly point out that raising investment minimums would be “detrimental to the EB-5 program’s future viability and … to employment in our states.”
In today’s political climate, the intense debate over illegal immigration sometimes blurs otherwise sound reasoning on legal immigration issues that should be kept out of the political fray. Such is the case for EB-5. Political differences over illegal immigration should not hinder reform of legal immigration programs that work — especially those that help drive our economy and create jobs.
Instead of moving forward with the Obama EB-5 rules, the Trump administration should allow Congress to permanently reauthorize the program, expand the number of visas available, and enact robust reforms that deter any potential abuses. To do otherwise would be a reversion to the kind of governing by regulatory fiat characteristic of President Obama, which President Trump successfully campaigned against.
Demetrios Karoutsos, a political and public affairs strategist, has worked as a press secretary for former New Hampshire Gov. Craig Benson, and has also served as communications director for former US Rep. John Sweeney (R-NY), the Senate Special Committee on Aging, and Rep. Tim Murphy (R-PA).