EB-5 a Step in the Right Direction

COMMENTARY | With massive budget deficits and chronic high unemployment, the United States desperately needs to find some ways to help the economy. But neither politicians nor big business have had much success in finding solutions, so it might be time to entertain more creative fixes. One possible method would be to heavily utilize the EB-5 visa program.

The EB-5 program gives temporary visas to foreigners who invest a minimum of $500,000 in a business or program in an economically distressed area. In addition, the investments must create at least 10 jobs. If the investor fulfills their obligations to the program, the visa can become a permanent green card. Although EB-5 is little known, it has been around since 1990, and there were 1,885 EB-5 visas granted in 2010.

There are many benefits from the program. In addition to creating jobs, the visa holders must pay taxes like any citizen. And since the investments must be in economically downtrodden areas, the program will in theory assist those most in need.

However, EB-5 has its downsides. It unfairly gives rich foreigners first dibs at coming to the United States. Furthermore, many EB-5 visa holders are Chinese nationals, which gives the impression that the country is being sold to China.

Another problem is the possibility of exploiting loopholes. For instance, there are ways to get around the requirement of creating 10 jobs. According to journalist Jack Minor, “If the project is located within the area of a regional center, ‘indirect jobs’ such as increased workers at a new fast food restaurant or similar business are also counted as jobs created.”

Clearly the EB-5 program is far from perfect, but if improving the economy is really a top priority, I think it should be promoted as much as possible. At the same time, I would like to see it amended to eliminate as many loopholes as possible, especially the “indirect jobs” one. And while the prospect of the Chinese taking over the American economy is frightening, I believe that fear is exaggerated. After all, many if not most of the EB-5 visa holders want to be in this country and someday become American citizens.

Even though I’d like to see EB-5 be expanded, I do feel bad about it discriminating against the poor in other countries. But since it might help poor Americans, I feel that there could be a net benefit.

Some of the recent economic policies of the United States may have been helpful, but they definitely haven’t created a booming economy. Promoting EB-5 is hardly a panacea, but it’s a step in the right direction.


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