WASHINGTON — In tandem with the $447 billion jobs plan President Barack Obama announced on September 8, his administration is breathing new life into an old programme to draw job-creating foreigners to the United States. It’s known as the EB-5 investor programme, has a clouded history, and can’t bring much relief to America’s unemployment misery.
But with 27 million people unemployed or underemployed and Obama’s own job depending on whether or not he can bring down the unemployment rate in time for next year’s presidential election, every job-creating opportunity is worth pursuing.
Which is why Homeland Security chief Janet Napolitano and Alejandro Mayorkas, the director of US Citizenship and Immigra-tion Services (USCIS), announced “streamlining measures” to America’s complicated immigration laws a few weeks before the president laid out his ideas on how to spur growth, a mix of tax cuts and infrastructure spending.
Unlike the Obama plan, tweaks to existing immigration rules need no approval from Congress so the administration has no-one to blame if the streamlining fails to yield results, such as a rush of foreigners investing $500,000 in a US project that generates at least 10 jobs in areas of economic hardship and high unemployment. The incentive, apart from possible profits: a fast track to a “green card” (permanent residence) and US citizenship for the entrepreneur and his family.
Long an object of desire for millions of would-be immigrants, a green card normally takes years to get. Approval for a conditional EB-5 green card can come through in a matter of weeks and the USCIS has established a Premium Processing Service that “guarantees processing within 15 calendar days for “projects that are fully developed and ready to be implemented.”
The impact of the enhancements announced by Napolitano and Mayorkas remains to be seen. According to projections by the Congressional Budget Office, the agency that provides economic data to Congress, lowering the unemployment rate by 1 per cent (it now stands at 9.2 per cent) would require 316,000 new jobs per month. That dwarfs the jobs created by the EB-5 programme.
Since its inception in 1990, according to USCIS estimates, the programme resulted in more than $1.5 billion in capital investments and created at least 34,000 jobs – an average of 1,700 a year. There has not been a single year when the annual quota of 10,000 EB-5 green cards was taken up. A Government Accountability Office report in 2005 blamed, among other things, “an onerous application process and lengthy adjudication periods.”
Those kinks have been ironed out, to hear the government tell it, and the United States is ready “to attract the best and brightest from around the world.”
But foreigners thinking of putting down $500,000 (for projects in depressed regions) or $1 million for other projects would be well-advised to read a Reuters report, the result of two months of investigations, on misleading promotions of the system by some of the specially-designated American businesses (known as regional centres) that are allowed to offer EB-5 visas to foreign investors.
Nothing easy, nothing certain
The report comes to the conclusion that the EB-5 programme is anything but an easy and certain path for wealthy foreigners to get into the US and stay there. In fact, only 54 per cent of the immigrants who start the process of gaining permanent residence through the programme actually attain it, according to the report, published in December.
Since the beginning of the year, USCIS has been working on enhancements of the process and its backers see it as a win-win proposition. One of its most vocal champions, Stephen Yale-Loehr, a professor at Cornell University Law School, says it’s a win for US businesses finding it difficult to get bank loans, it’s a win for the foreigner who gets a green card (if the project flourishes) and it’s a win for American workers because jobs are being created.
Hard-core opponents of immigration see a different picture. David North of the Washington-based Center for Immigration Studies, greeted the announcement that the EB-5 process was being streamlined with a blast of criticism headlined ‘Administration caves to open-borders advocates on investor visas’.
This is a reflection of a general anti-immigration mood thanks to which new legislation to attract foreigner entrepreneurs to the United States is stuck in Congress. Called the Startup Visa Bill, it was first introduced last year by Senator John Kerry, a Democrat, and Richard Lugar, a Republican, and re-introduced with modifications in the spring. The aim is the same as the EB-5 programme but the barriers to entry are lower and the procedure differs.
Under the legislation, a foreign entrepreneur would qualify for a conditional green card if he can raise $100,000 from a US venture capitalist. The green card would become permanent if the new venture created five new American jobs and raised at least $100,000 in annual revenues.
The bill has won fulsome praise from the technology industry, where foreign entrepreneurs have played leading roles, but the prospect of its passage in an election year look as remote as the comprehensive immigration reform Obama promised when he campaigned for the presidency in 2008.
Even less likely to persuade immigration opponents is an unorthodox suggestion from one of the most prominent advocates for an overall reform of an immigration system he has described as completely broken – New York Mayor Michael Bloomberg. His idea: offer visas to foreigners who agree to live in blighted cities, such as Detroit, for seven years without claiming any welfare benefits.
In his words: “Overnight you would fill it with new people who would fill it with new jobs.”
(Bernd Debusmann is a Reuters columnist. The opinions expressed are his own.)