Public Interest Comment on DHS's Proposed Rule: Removal of International Entrepreneur Parole Program

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By Daniel R. Pérez & Lisa Zimmer
June 29, 2018

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Introduction

The Department of Homeland Security’s proposed rule would eliminate its international entrepreneur (IE) program, issued in 2017. DHS states that its proposal is consistent with the administration’s policy priorities detailed in section 11 of Executive Order 13767 (EO 13767), “Border Security and Immigration Enforcement Improvements.”[1] However, this order states that parole of individuals into the U.S. should be exercised on a case-by-case basis “only when an individual demonstrates…a significant public benefit derived from such parole.”[2] The department’s IE program includes a strict set of criteria designed to achieve precisely this outcome. Additionally, the elimination of this program is not in line with the administration’s stated policy priority of moving towards a merit-based immigration system.[3]

In its final rule published on January 17, 2017, DHS noted that the IE program was “expected to generate important net benefits to the U.S. economy.” Among the benefits DHS cited were the creation of jobs for U.S. citizens, increased spending on research and development, and increases in total factor productivity and innovation including technological spillovers into other areas of the economy. In addition, DHS committed to fully recovering all costs associated with administering the program by charging fees to applicants; a biennial review process would ensure that DHS could adjust application fees to ensure they covered all administrative costs.[4]

In its 2017 IE rule, DHS argued that the program was not only consistent with its “general authority to extend employment authorization to noncitizens in the United States”[5] but also directly advanced the agency’s statutory mandate to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland.”[6] DHS’s current justification for eliminating the IE program directly contradicts this statutory mandate.

In the event that DHS chooses to move forward with its elimination of the IE program, there are several regulatory requirements mandated by existing executive orders that are absent in the proposed rule. For example, DHS’s preferred alternative for transitioning out of the IE program—automatic termination of IE parole on the effective date of a final rule—is not consistent with the regulatory philosophy outlined in EO 12866 that agencies tailor their regulations to impose the least burden on society.[7]

DHS’s proposed rule would harm economic growth by raising barriers to foreign entrepreneurship; the agency previously cited and agreed with the wealth of economic literature asserting that “high growth firms” (which the IE program targets) are responsible for a disproportionately large share of economic gains related to growth in total factor productivity, job creation, innovation, and GDP.[8]

This public comment proposes several changes that DHS could make to its proposed rule to minimize its cost burden on the U.S. public.

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[1]    Executive Order 13767, “Border Security and Immigration Enforcement Improvements,” January 25, 2017. 82 FR 8793. §11.

[2]    Ibid. §11(b).

[4]    82 FR 10.

[5]    8 U.S. C. §1324a(h)(3)(B).

[6]    6 U.S.C. §111(b)(1)(F).

[7]    Executive Order 12866, “Regulatory Planning and Review,” §1(b)(11).

[8]    See Clayton et al. “High-employment-growth firms: defining and counting them,” Office of Industry Employment Statistics, Bureau of Labor Statistics (BLS), Monthly Labor Review (June 2013), p.1-2. For the relationship between high-growth firms and the economy, see: Haltiwanger et al. “Who Creates Jobs? Small vs. Large vs. Young,” the National Bureau of Economic Research. NBER Working Paper No. 16300. August 2010.