David J. Bier
President Donald Trump is promising to sell green cards “with a path to citizenship” to one million or more immigrants who pay his administration a fee of $5 million. He plans to shut down the EB‑5 immigrant visa category for investors and replace it with what he calls the “Trump Gold Card.” He has stated that he is not asking Congress for legislation and plans to begin selling the cards in two weeks.
Selling green cards is good in theory, but Trump’s specific proposal has some problems:
President Trump cannot lawfully eliminate Congress’s EB‑5 investor program.
He cannot lawfully sell green cards in excess of Congress’s caps.
People will be paying for something Trump cannot provide.
Even if he could, his proposal will not sell one million green cards or generate $5 trillion in revenue.
Cato’s Gold Card Idea
Selling legal residence would be an improvement over the overly bureaucratic and restrictive legal system. My colleague Alex Nowrasteh published a policy analysis explaining the value of the “Gold Card” in 2019:
Congress should create an additional visa category that would allow foreigners to work and live legally in the United States after paying a tariff. Immigrants who pay the immigration tariff would receive a “gold card” that does not directly lead to citizenship but allows the immigrant to live and work legally in the United States…. Removing the bureaucratic intermediaries, human smugglers, and immigration attorneys from the mix is certainly worth publicly abandoning the fantasy that money is an irrelevant consideration in immigrating to the United States.
A gold card fee could be set at a level necessary to cover fiscal costs, to maximize revenue, or for any other purpose. Regardless of the intent, paying a fee to the government is much simpler than designing complicated rules about who qualifies for which visa category. While it would be better for the funds to go into the private sector, implementing a fee could help reduce the federal government’s enormous deficit—a challenge that Congress seems unwilling to reduce through a better mechanism, such as spending cuts.
The EB‑5 Investor Program
The current system offers immigrant investors the option to invest between $800,000 and $1.05 million. The process for obtaining an EB‑5 green card is extremely bureaucratic, as I explain in my paper on the legal immigration system. To qualify under the $800,000 investment requirement, the project must be in a rural or high-unemployment area. Additionally, the government must believe that the job will create at least 10 full-time jobs for US workers within two years. It has an annual cap of 9,940 participants, but that includes spouses and minor children, so only about a third goes to investors.
There is a two-stage process for the EB‑5. The investor must invest and submit a petition detailing how they expect to create 10 jobs. If approved, the investor receives a conditional green card. After two years, the investor must request that the conditions on the green card be removed if the 10 jobs are realized. As a result of its complicated rules, the EB‑5 visa has shockingly high and unpredictable denial rates. Since 2007, more than one in five investors was rejected at the initial stage, and about one in ten were rejected at the second stage.
Since 2007, about 100,000 investor petitions have been received. It is important to note that prior to FY 2020, the minimum investment amount was $500,000. President Trump raised it to $900,000 through a regulation, but that regulation was blocked in court. In 2022, Congress stepped in and increased it to $800,000. The minimum threshold is more important because most investors choose to invest in targeted areas.
The cap and associated regulations have caused a significant backlog to develop, with about 10,000 investors waiting at the initial petition stage and another nearly 14,000 waiting for a green card because the caps are too low. (Secretary of Commerce Howard Lutnick said there are “250,000” waiting, which is off by an order of magnitude.) Because of the caps on individual countries that state that no single nationality can receive more than 7 percent of the green cards, 98.5 percent of the investors waiting for green card cap spots to open up are from China.
The EB‑5 system is complicated for investors to navigate partly because it intentionally funnels resources into government-approved projects known as Regional Centers. The Regional Centers are considered safer investments because they are allowed to count indirect job creation toward the 10 US jobs requirement. This means that investors hand off their money to people who manage these investments, and they cannot get their money back before the government approves their application. This scheme puts investors in a vulnerable position.
Trump’s Proposal
Instead of improving the EB‑5 program, President Trump wants to scrap it and replace it with a $5 million payment to the government. Here are some upsides to Trump’s idea:
Less bureaucracy: A straight pay-to-play scheme would remove the onerous bureaucracy and complicated rules that investors currently face.
No cap on gold cards: Trump wants to sell off one million or more green cards. The current EB‑5 cap is less than 10,000 annually. Combined, all family, employment, and diversity lottery categories have a cap of 421,000. The refugee cap—set by the president—was 125,000 before Trump suspended refugee entries. Other uncapped categories—primarily for spouses, minor children, and parents of adult US citizens—account for the remaining numbers.
More direct fiscal upside: The government would directly see deficit reduction from Trump’s proposal.
Here are the downsides of Trump’s proposal compared to the EB‑5 system:
Less economic growth: The EB‑5 visa is intended to boost foreign direct investment in the United States, particularly in low-growth areas. The Trump proposal eliminates any economic upside other than deficit reduction.
Total Loss for Investors: The average EB‑5 investor is likely to fully recover their investment amount—albeit at a lower rate of return than other alternative investments. Under Trump’s Gold Card, the money is handed off to the US government for deficit reduction. Rather than a relatively small risk of losses under the EB‑5 system, investors would face a total loss under the Trump Gold Card.
Higher Minimum Threshold: Moving from a minimum requirement of $800,000 to $5 million would be a dramatic change. EB‑5 projects are already struggling to obtain investors at the lower threshold with the possibility of repayment.
No legal authority: Green card caps and categories were established by Congress through the Immigration and Nationality Act. Would wealthy individuals invest in a system without solid assurances of its legality? Congress just reformed the EB‑5 in 2022, and there is no authority to make these radical changes. While Trump could use his “parole” authority to grant temporary lawful residence to people willing to pay $5 million, his administration has taken the position that this type of “categorical” parole is unlawful. Moreover, Trump insisted that the gold card would include “green card privileges” and “path to citizenship,” which can only come from an actual green card. It is doubtful that wealthy people would pay $5 million for something with dubious legal standing or a temporary status that could be rescinded at any time.
How to Sell One Million Green Cards
Trump will not be able to sell one million green cards for $5 million per card. Not even 5,000 people per year are willing to try to obtain an EB‑5 green card when the cost is temporarily losing control over $800,000 for a few years. There are only about 2.3 million people in the world with net assets excluding their primary residence of $5 million or more—and a third of these individuals are already in the United States.
The fact is that most of these highly successful people are highly successful in their home countries and have no reason to move. Some wealthy Chinese people are exceptional in that they may be wealthy, but they have no freedom in China. Of course, many Republicans are averse to helping wealthy Chinese for fear of inadvertently helping a communist. Trump insists that the Gold Card will be open to all nationalities, and applicants will be well-vetted.
Even when high-net-worth individuals want to immigrate to the United States, the current immigration system usually provides those individuals with other, cheaper alternatives. None of those other options are “you’re wealthy, here’s a green card,” and they all have complicated rules. However, very wealthy individuals will usually be able to use their resources and connections to find ways around these problems. Other countries also sell permanent residence at much lower cost than the Trump Gold Card.
A green card sale could help reduce the deficit. But if the initial sale fails to sell one million, the Department of Homeland Security should be authorized to lower the $5 million price and conduct additional sales at six-month intervals until applications reach a pace projected to hit one million over 10 years.
