A $5 million 'Trump Gold Card' visa: good or bad?

The White House is enthusiastic that the program will reduce fraud and bolster foreign investment.

President Donald Trump has proposed to replace the EB-5 visa program for foreign investors with a "gold card" (very on-brand for the president) that would provide purchasers with permanent residency and an expedited path to citizenship for a substantial sum of $5 million.

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“Wealthy people will be coming into our country by buying this card," the president said at a White House press conference. "They’ll be successful, and they’ll be spending a lot of money... We think it’s going to be extremely successful.”

The EB-5 visa program, which the Trump Administration is seeking to replace, was created by Congress in 1990. If investors spend at least $900,000 and have a company that employs at least 10 people, they will receive the aforementioned perks following a cleared background check. On average, between five and ten thousand individuals from abroad use the EB-5 program per year.

At the White House on Wednesday, Commerce Secretary Howard Lutnick said the gold card includes a path to citizenship and reform the waste and abuse of the EB-5 program.

Lutnick and the president said the sale of millions of gold cards would contribute to paying down the national debt and insisted that it would not require congressional approval.

I have mixed feelings about this one…

The Good

• America needs to make a concerted effort to onshore manufacturing and overall capacity. The threats posed by America’s adversaries necessitate that the United States get back in the business of localizing our supply chains.

• EB-5 is overloaded with fraud and abuse and needs reform. Over the past decade, the program has witnessed a $350 million fraud scheme tied to a Vermont ski resort project defrauded investors. In Chicago, a $147 million scam promised a convention center that never materialized, with the money siphoned off for personal gain. For its part, the SEC has intervened in multiple instances, such as freezing the assets of a Seattle developer who allegedly diverted $17 million of EB-5 funds for unrelated projects and personal use. The EB-5 program often involves middlemen or developers soliciting foreign investors — usually motivated more by the visa than the investment return— then misusing the funds, leaving investors with neither returns nor residency.

• The president and his team want to cut spending and find ways to increase revenue in ways that don’t burden the American taxpayer. Bringing in cash from foreign investors is one such way to relieve the stress of taxpayers.

The Bad

• The numbers don’t add up. Sure, getting millions of people to purchase “gold cards” would be great, resulting in a potential trillions of dollars in revenue. However, only a few million people outside of the United States have a net worth of over $5 million, and only a fraction of that number has the liquidity to write a check to the U.S. government for that amount. The program cannot generate the capital necessary to pay down the debt. The math doesn’t math.

• The program could be subject to national security risks without proper vetting, given that China has the highest concentration of wealth outside of America.

• There is no guarantee that a mechanism will be created to use the revenue from the “gold card” program to pay down the debt. It would more likely be used to finance other government programs.

• America is not a technocracy but a constitutional republic. Creating a unique program for wealthy foreign elites and powerbrokers may resonate with Wall Street, Washington, and Silicon Valley. Still, the Americans who elected Donald Trump president may vehemently disagree with such an initiative. By catering exclusively to one class of people, the White House risks acquiescing to the demands of special interests, which won’t align with the president’s mission of “draining the swamp.”

The “gold card” endeavor is still in its early stages. Still, it would be ideal for the Trump Administration to assure American citizens and taxpayers that the program will phase out past EB-5 boondoggles and not simply become a vehicle for the wealthy and powerful to skip the line.

Feel free to drop your thoughts in the comments section!