Originally Posted on Politico / Michael Halloran / April 27, 2017
It’s sometimes called the “golden visa,” the obscure immigration program for big investors that burst into the headlines this week in the wake of stories on the family of White House aide Jared Kushner. Last Saturday, Nicole Meyer — Kushner’s sister and a representative of her family’s development company—hosted a meeting for Chinese investors at the Beijing Ritz-Carlton, walking them through how investing enough money in Kushner family properties can open the door to immigration to America.
In addition to raising ethical questions and forcing the Kushner family to apologize for appearing to pitch their White House connections, the meeting case a spotlight on the visa she was talking about: The EB-5 visa, which allows foreigners to invest $500,000 to $1 million in the U.S. in exchange for a visa which in turn can lead to what amounts to a green card.
Critics quickly sharpened their knives for the visa program, saying it gives the wealthy a leg up on moving to the U.S. But for all the uproar over the Kushner family, Washington shouldn’t overreact. The EB-5 program has been a huge success for all involved. Investors have received a coveted U.S. visa, workers have received jobs and companies have found cheap financing. It’s a win-win-win.
The headlines play into skepticism that was already mounting in D.C. Last week Congress, extended the EB-5 program until the end of September but its future remains uncertain. Like almost all government programs, EB-5 isn’t perfect. Investments in the U.S. don’t always turn into jobs for American workers; Chinese investors have been known to use the program to simply get their money out of China. These are real problems. But it would be a mistake for Congress to respond to them by ending EB-5 altogether, as critics have suggested. Instead, the program’s 26-year history suggests there are more benefits we aren’t reaping—and that if lawmakers want to improve the program, a better way would be to expand the annual limit on visas tenfold while imposing greater oversight.
EB-5 was created in 1990 to mimic the job-boosting success of similar programs in other countries like the United Kingdom, Austria and Australia. The investor visa program creates a path to residency for foreign nationals who invest $500,000 to $1 million in U.S. projects that generate at least 10 permanent jobs. The lower $500,000 requirement is for investments in rural projects, or economically depressed areas; otherwise, the required amount is $1 million. Typically, EB-5 investors have backed development of ports, hotels and other commercial properties. The program created 174,000 jobs and generated $5.4 billion in investments in 2012 and 2013, according to the Department of Commerce.
But for all its success, EB-5 has garnered harsh pushback among some in Congress. Rural lawmakers correctly point out that most of the projects funded by EB-5 have been in flourishing metropolitan areas; nearly half of all EB-5 investors have invested in new commercial enterprises in California and New York. Some have complained the money really supports wealthy developers and not enough is turned into jobs.
These are real problems, but lawmakers shouldn’t respond by eliminating the program. Underlying the visa is a big principle that still holds up… Continue Reading >>