FOR IMMEDIATE RELEASE
June 25, 2015
CONSERVATIVE ECONOMIC ANALYSIS HIGHLIGHTS ROLE OF EB-5 VISA PROGRAM IN BOOSTING PRIVATE INVESTMENT ACROSS INDUSTRIES, SUSTAINING LONG-TERM GROWTH AS U.S. POPULATION AGES
New Report Shows Wide Reaching EB-5 Program to be 500 Percent More Efficient at Job Creation than 2009 ‘Stimulus’ Bill
WASHINGTON, D.C., June 25, 2015: On the heels of recently introduced bipartisan Senate legislation to reauthorize and reform the EB-5 Regional Center program, a new U.S. Policy Metrics/Hamilton Place Strategies report highlights the program’s impact as a net job creator and budget-neutral catalyst for efficiently bringing private investment into the U.S. at a time when other policy channels have fallen short. The report also cites EB-5 as an important tool for addressing both short-term economic contractions and long-term financial headwinds, including obstacles to capital formation associated with an aging U.S. population.
The report was commissioned and released today by the EB-5 Investment Coalition (EB-5IC), a broad-based, bipartisan organization mobilizing around the shared mission of putting Americans to work by reauthorizing and strengthening the critical EB-5 Regional Center Program. EB-5 investments have funded job-creating projects in all 50 states and across a broad range of industries, including health care, education, manufacturing, energy, agriculture, retail, hospitality, transportation, infrastructure, and real estate. The report is authored by Steve McMillin, a partner at U.S. Policy Metrics and former deputy director of the White House Office of Management and Budget under President George W. Bush; Michael Solon, also a partner at U.S. Policy Metrics and former budget advisor to Senate Majority Leader Mitch McConnell (R-KY); and Matt McDonald, a partner at Hamilton Place Strategies and a former advisor to President George W. Bush.
“This report highlights how the EB5 program is helping to further the mission of job creation and economic development in communities all over The United States of America: through its power to diversify regional economies, fund vital infrastructure projects and boost an incredibly diverse range of industries at no cost to our taxpayers,” said Republican Mayor Tomás Regalado of Miami, honorary chair of the EB-5IC. “As Congress continues to debate the path forward on everything from trade and tax policy to infrastructure financing, the EB-5 program has been steadily working to bring private investment into the U.S. and create jobs across all 50 states.”
Today’s report shows that the EB-5 program generated a minimum of $5.2 billion in private investment between 2005 and 2013. In 2013 alone, the program generated at least $1.6 billion in private investment and 31,000 jobs – more jobs than 11 different states have individually created in the last 12 months, including Alabama, Kansas, Nebraska and North Dakota. Characterizing the program’s impact on net job creation and domestic investment as “disproportionately large,” the report finds the EB-5 program to be 500 percent more efficient at creating jobs than the 2009 American Recovery and Reinvestment Act, more commonly known as the “stimulus” bill. Whereas the stimulus bill created one job for every $100,000 to $400,000 in public spending, the EB-5 program has created tens of thousands of jobs at no cost to taxpayers.
In examining the role of EB-5 in delivering “patient capital,” a form of financing that is considered ideal for long-term, capital-intensive projects with significant job-creating potential, the report notes unique values to this type of capital, including its ability to play a significant role on the regional and local level.
“Part of the beauty of EB-5 financing is the fact that it’s accessible to everyone, not just big developers in major metro areas with deep pockets and endless credit lines, ” said Chad Wold, managing partner of Forza Partners in Southlake, TX and a member of the EB-5IC. “I’ve seen this firsthand in one of our projects in Allen, Texas, where proactive efforts on the part of the local business community and city government have allowed us to attract enough EB-5 capital to build a new convention center and hotel—projects that might not otherwise have moved forward without EB-5 financing.”
In addition to examining the economic impact of the EB-5 program, today’s report also assesses the potential effects of recently proposed reforms, including those contained in a bipartisan Senate bill introduced earlier this month by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and Ranking Member Patrick Leahy (D-VT). The study cautions that overly restrictive job creation requirements and rules favoring certain geographic regions could restrict the program’s ability to promote broad-based growth and investment. However, it notes that other policy options, such as those to effectively increase the 10,000 visa cap, could have significant economic benefits.
“Recently introduced legislation to extend and improve the EB-5 program is a welcome development that could go a long way in furthering the program’s economic impact,” said Solon. “Additional changes to the treatment of dependents and cyclical adjustments could be especially beneficial in improving the overall effectiveness of EB-5 and amplifying its ability to counteract painful economic downswings.”
A regulated employment-based initiative, the EB-5 program can approve up to 10,000 visas each year. The initial application requires proof of investment in a qualified project, evidence of an investment of at least $500,000 and the creation of at least 10 U.S. jobs. The investor’s application is screened and, if approved, only a “conditional green card” is granted. Most of these applications come through regional centers, which pool and deploy investments.
About U.S. Policy Metrics
US Policy Metrics is an economic and public policy research firm providing independent, strategic analysis of how current and proposed legislation and regulations affect the economy, industries and individual firms.
About Hamilton Place Strategies
HPS is a consulting firm with an analytical approach to improving public policy at the intersection of government, business, and media. The firm uses a combination of analysis, communications, and advocacy to understand complex issues, to explain these issues for target audiences, and to persuade critical stakeholders.
About the EB-5 Investment Coalition
The EB-5 Investment Coalition (EB-5IC) is a broad-based organization of businesses, industry leaders, trade associations and elected officials mobilizing around the shared mission of putting Americans to work by reauthorizing and strengthening the critical EB-5 Regional Center Program. A bipartisan organization representing a diverse range of geographic regions and industries, the Coalition is united in its conviction that America cannot afford to sit on the sidelines in today’s increasingly competitive global economy—especially not when tens of thousands of jobs and billions of dollars in investment are at stake. The EB-5IC’s members have seen firsthand the power of EB-5 to promote dynamic local economies, competitive free markets and homegrown American jobs – all at no cost the taxpayer—and are working to not only reauthorize but also strengthen the program through a series of targeted reforms that would make it even more effective, accountable and secure.