Suspicion of EB-5
Suspicion of EB-5
BALTIMORE – Two of the firms that are developing projects with the help of the state are using the EB-5 program, which provides green cards to foreigners who invest $500,000 to $1 million in a job-creating enterprise in the United States. It’s making some people uncomfortable, including Senate Minority Leader Nancy Jacobs of Harford County. She’s contemplating legislation to make the use of investor visas illegal for state projects, saying it sounds like we’re selling citizenship and “turning the country over to the Chinese.”
She is apparently not aware of how immigration law in the US works. The program, which has been around since 1990 but has expanded significantly in the last few years, certainly needs close monitoring to make sure it is achieving its maximum potential in terms of creating jobs. But the idea that we should give priority in immigration to people who are already successful in their native countries and who have the capital to invest in the development of this nation is absolutely sound.
Comparative analysis of all visa programs would quickly show that the EB-5 program would be among the most favorable to the US. Complaining that this visa program amounts to selling American citizenship reveals a misunderstanding of how our immigration system works. Our borders aren’t like a deli counter where people take a number and wait their turn. We give preference, and always have, to people who are most likely to integrate easily into American society and to contribute the most to it. Skilled workers, people with advanced degrees or promises of employment, or those with family members already here get pushed to the front of the line. The reason the investment visa is known as “EB-5″ is that there were already four other employment-based visa programs before it. The government allots 10,000 visas a year to the EB-5 program, or 7.1 percent of those allowed for all employment-based visas, though the quota has never been met.
It is only when you scrutinize all of the visa programs and compare it to illegal immigration that complaints become obvious. Those who are concerned about immigrants in American society tend to raise several objections, none of which apply here. EB-5 visa recipients are not illegal immigrants; they broke no laws to get here. They are not taking away jobs that could have gone to native-born Americans. On the contrary, they are creating jobs that, by law, must go to American citizens or legal residents. They are not straining the social safety net. Instead, they are sufficiently rich to afford a six- or seven-figure investment, and they are volunteering to come here and pay federal, state and local taxes.
Not everyone who can say the word investment, understands the word investment. Nor does everyone who say the word immigration understand the word immigration. And finally, allowing people to participate in projects like the expansion of Seagirt Marine Terminal at the Port of Baltimore and the redevelopment of the State Center office complex doesn’t amount to turning the country over to the Chinese or anyone else. The people who take advantage of this program are putting themselves and their entire families on a path to become American citizens. If the firms completing these projects sought financing through traditional means, the money could have come from investors anywhere. This way, they are selling ownership stakes in their ventures to people who will live here and who will have a tremendous incentive to make sure the developments’ job creation potential is realized. Their legal status in this country depends on it.
In this economic time when it is obvious states cannot at-will print money, they have to turn to alternative means to balance their budgets and yet continue projects. The state also realizes real benefits from the willingness of the private development firms it has partnered with to consider the EB-5 program. Because the state has a limited ability to issue bonds to pay for projects like the Seagirt expansion or the State Center renovation, it has increasingly looked to public-private partnerships. EB-5 investors make it easier for private firms to make those projects viable. Not only has it been more difficult since the financial collapse of three years ago to secure traditional financing, but EB-5 investors often require less stringent terms, since they are also getting the benefit of a path toward U.S. citizenship out of the bargain.
The viability of any project is based upon the state’s ability and willingness to do whatever it takes to fund them. There’s a reasonable case to be made that we should not be quick to hand public assets over to private management. But absent a willingness to take on substantial public debt — and to raise taxes to pay for it — there is no other viable way, for example, to expand the Port of Baltimore to handle the big cargo ships that will be moving through the Panama Canal starting in 2014. The fact that some of the investors in these projects might be new legal immigrants bringing their families and their capital to this country should sweeten the deal, not be cause for alarm.