Trump Endorses the Proposed RAISE Act

Trump Endorses the Proposed RAISE Act

Here we go again…!! On August 2, 2017, President Trump, endorsed the Reforming American Immigration for Strong Employment (RAISE) Act. This bill, if it becomes law (and we do predict that this would be very unlikely) would reduce legal immigration drastically by eliminating all employment based categories (essentially EB-1 to EB-5) eliminating diversity visas, and replacing them with a points system, which is based on the kind of systems used in the UK, Canada, and Australia.

In order to immigrate to the US, applicants would need 30 points or more to immigrate to the US with 6 points allocated to those who invest $1,350,000 in a new commercial enterprise, and 12 points to those who invest $1,800,000. In both instances, the investment must be maintained or at least 3 years, and it must also be actively managed.

One of the most significant changes to the previous EB-5 visa program outside of the minimum capital requirements and job creation, is the active management provision. This requires that investors hold a major and more heavily involved position within the US company. This would hinder the significant and much needed capital flows that EB-5 investors provide to US companies, therefore handicapping US businesses from expanding employment and growing in size. Additionally, the bill, although intended to help increase wages for low-skilled American workers, will also be unlikely to have that effect. Recent studies have shown that in lieu of hiring more low-skilled American workers with a higher wage as a result of low supply of labor, US employers will instead seek to either outsource or use cost saving methods, such as machination, to replace them and reduce long term costs. Thus, it is also likely to have this unintended effect of harming more low-skilled Americans.

Despite the president’s sentiments regarding immigration and the Republican desire for a points system, the bill is not very likely to pass due to legislative procedure. The strong opposition from big business, immigration rights advocacy groups, and Democrats will make it difficult and near impossible to reach the required 60 votes to avoid a filibuster, where the bill could die. Even the available 52 Republican votes for the simple majority seem farfetched as Republican Senators Lindsay Graham of South Carolina, Jeff Flake of Arizona, Dean Heller of Nevada, Lisa Murkowski of Alaska, as well as Senator John McCain of Arizona have indicated earlier this year that they would be against curtailing legal immigration. Sen. Graham has said regarding this bill that, “If this proposal were to become law, it would be devastating to our state’s economy, which relies on this immigrant workforce,” a sentiment held by many other Senators whose states’ economies also require labor intensive employment.