New Report Validates the EB-5 Program as a Most Efficient Job Creation Program
A June U.S. Policy Metrics/Hamilton Place Strategies report Harnessing Private Capital For Job Creation: An Analysis Of The EB-5 Visa Program demonstrates the impact of the EB-5 visa program as a net job creator and budget-neutral catalyst for bringing private investment into the U.S. The report was commissioned by the EB-5 Investment Coalition (EB-5IC), a broad-based, bipartisan organization focused on reauthorizing and strengthening the EB-5 Regional Center Program. This 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.
The report’s top findings include:
EB-5 GENERATES PRIVATE INVESTMENT AT A TIME WHEN OTHER POLICY CHANNELS FALL SHORT
- National debates over tax reform, trade expansion, and infrastructure policy have one thing in common: a desire to boost private investment to help fuel long-term growth. EB-5 does exactly that, catalyzing growth at no cost to taxpayers.
- The report shows that the EB-5 program generated a minimum of $5.2 billion in private investment between 2005 and 2013, generating at least $1.6 billion in private investment in 2013 alone.
EB-5 IS 500 PERCENT MORE EFFICIENT AT JOB CREATION THAN THE 2009 STIMULUS BILL
- While the 2009 American Recovery and Reinvestment Act, commonly known as 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.
- The EB-5 program created 31,000 jobs in 2013 alone – more jobs than 11 different states have individually created in the last 12 months.
- 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.
EB-5 PROVIDES ‘PATIENT CAPITAL’, CAPABLE OF ADDRESSING BOTH SHORT-TERM FINANCIAL CRISES AND LONG-TERM ECONOMIC CHALLENGES
- The report shows that the EB-5 program can sustain growth during both short-term economic contractions, such as the 2008 financial crisis, and across long-term financial headwinds.
- As the U.S. population ages and baby boomers start retiring, EB-5 can address challenges associated with capital formation by bringing fresh streams of private investment into the U.S.
- The report notes the role of EB-5 in delivering “patient capital,” a form of financing that is considered ideal for long-term, capital-intensive projects.
WITH SMART REFORMS, CONGRESS CAN BOOST EB-5’S JOB CREATING IMPACT
- The report assesses the potential effects of proposed reforms, including those contained in a bipartisan Senate bill introduced 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. It notes that other policy options, such as those to effectively increase the 10,000 visa cap, could have significant economic benefits.