Dear Acting Director Vought:
On behalf of the undersigned organizations, we write to oppose promulgation of Obama-era regulations regarding the employment-based fifth preference (EB-5) visa program. Undercutting the EB-5 program is a mistake that will hurt the U.S. economy by limiting the program’s ability to create jobs and fund infrastructure projects.
We urge you and your designees to withdraw this EB-5 “midnight rule” proposed by the Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS) on January 13 (see 82 Federal Register 4738).
USCIS is proposing to dramatically increase the financial burdens placed on EB-5 investors and would raise these amounts to levels that far exceed those that have been proposed and are under consideration by Congress. If implemented these changes will chill EB-5 investment into U.S. companies indefinitely.
A sharp increase in eligibility requirements as proposed is unnecessary and counterproductive. EB-5 visas are currently capped at 10,000 per year and are available for individuals who invest at least $1 million in a U.S. business, half of that for economically depressed areas, that create at least 10 full-time American jobs.
In recent years, the total number of EB-5 visas issued to investor immigrants has approached the 10,000 cap. However, that is due only to the fact that visas for family members are being erroneously counted toward the cap. Otherwise, there would be ample room to meet demand at the current investment threshold.
Despite the backlog this practice has created, the EB-5 program has attracted a significant amount of foreign investment to the U.S. to date. A study from the American Action Forum found the program increased foreign investment in the United States by $20 billion since 2008. A 2017 Department of Commerce report similarly found that the EB-5 program increased investment in the U.S. by $5.8 billion in 2012 and 2013 alone. Using data from FY12-FY13, these projects were expected to create an estimated 174,039 jobs for American workers.
EB-5 investment provides alternative sources of funding for worthwhile projects that may otherwise go overlooked. Urban areas often struggle to secure development investment despite significant interest, but now, for instance, dilapidated parts of the nation’s capital are being revitalized thanks to EB-5 investment and the hard work of an American entrepreneur.
Global competitiveness has been a top objective of the Trump administration. Tax reform and efforts to streamline government regulations have contributed to historic lows in unemployment numbers and made America more competitive for business. Furthermore, many countries seek to attract foreign investment through economic citizenship programs. The EB-5 program allows for the U.S. to compete for mobile foreign investment and the jobs that these funds bring.
Congress must continue to reauthorize the EB-5 “regional center” program—which allows for pooling of capital from multiple investors—before it lapses. This would be a good time to amend and reform the program. Moving ahead on regulations now puts the cart before the horse.
Enacting the Obama-era regulatory proposal would undermine the Trump Administration’s economic policies and greatly reduce foreign investment in the U.S. economy. Even the rule’s consideration has created uncertainty and rendered the program less effective. For these reasons, we urge that the Obama midnight regulation be abandoned immediately.
Andrew F. Quinlan
President, Center for Freedom and Prosperity
President, Americans for Tax Reform
Executive Director, Taxpayers Protection Alliance
President, Niskanen Center
President, Market Institute
President, The American Consumer Institute
President, Campaign for Liberty
President, National Tax Limitation Committee
James L. Martin
Founder/Chairman, 60 Plus Association