Cost of giving illegal immigrants path to citizenship could outweigh fiscal benefits
Any immigration reform plan that allows the roughly 11 million individuals now in the United States illegally to stay in the country would bring with it a mix of new revenues and increased costs. And as President Obama and a bipartisan group of senators separately press the issue this week, past studies suggest it is doubtful that the fiscal benefits of such policy changes would outweigh the costs.
By legally joining the workforce, the immigrants in question would generate additional and much-needed income tax but also would become eligible for a certain level of government assistance. Research shows creating a path to citizenship for so many illegal immigrants would result in significant costs to state, local and federal governments.
Published January 28, 2013
“This doesn’t make them bad people, but (lawmakers) should be honest with the public,” Steve Camarota, director of research for the Washington-based Center for Immigration Studies, says. “Don’t sell them a bill of goods.”
While most studies, including one by the nonpartisan Congressional Budget Office, have focused on the impact at the state and local levels, where most of the socials services for illegal immigrants are provided, Camarota has also looked at the impact on the federal government.
He estimated in an often-cited 2004 study that illegal immigrants paying taxes and getting access to such social services as Medicaid or food stamps would cost taxpayers $29 billion annually.
Contrary to the conventional wisdom, he argued, the main reason illegal immigrants create a large deficit is not their heavy use of social services but their lack of education, which results in low-paying jobs and small income-tax contributions.
“On average, the costs that illegal households impose on federal coffers are less than half that of other households, but their tax payments are only one-fourth that of other households,” writes Camarota, in his 2004 study “The High Cost of Cheap Labor: Illegal Immigration and the Federal Budget.”
More recent studies of the fiscal benefits and costs of immigration reform are hard to come by, and the CBO study, too, dates back to 2007.
Even so, Camarota points outs that more recent data unmistakably show less-skilled and less-educated citizens have been hit hardest by the recent economic downturn and that the proposed legislation would put them in direct competition with illegal immigrants with similar qualifications.
“While it would be a mistake to think that every job taken by an illegal immigrant is a job lost by a native, it would also be a mistake to imagine that allowing illegal immigrants to stay permanently in their jobs has no impact on labor market outcomes for U.S.-born workers,” Camarota said last month.
The bipartisan Senate proposal unveiled Monday in part calls for a path to citizenship for illegal immigrants already in the country, contingent upon better securing the Mexico border and tracking of people here on visas; awarding green cards to immigrants who obtain advanced degrees in science, math, technology or engineering from a U.S. university; and establishing an agricultural worker program.
The lawmakers hope to have a complete bill by late March and a Senate vote by late spring or early summer.
Obama, who has made comprehensive immigration reform a second-term priority, will be in Las Vegas on Tuesday to talk about his goals.
Darrell West, vice president and director of governance studies at the liberal-leaning Brookings Institute, argues immigration studies have largely focused just on the short-term economic consequences of comprehensive illegal immigration reform.
He said Monday that legally picking fruits and vegetables, for example, is indeed a low-paying job, but filling those vacant spots would help farms reach maximum productivity and in turn perhaps increase wages and hire more people.
West also argued illegal immigrants have a strong entrepreneurial spirit and that their children historically are economically better off.
Should such legislation become law, millions of illegal immigrants also would become eligible for medical benefits under Obama's health care law.
Illinois Democratic Rep. Luis Gutierrez told The Hill newspaper that he wants illegal immigrants integrated into the labor force and accessing government-run health exchanges so they will become less of burden, particularly as uninsured Americans.
“Do we want them to go to the exchanges?” he said. “Absolutely we do — if and when they don’t have health care through their employers.”
Alabama Republican Sen. Jeff Sessions called the Senate proposal "large-scale amnesty" that is "likely to add trillions of dollars to the debt over time, accelerate Medicare’s and Social Security’s slide into insolvency, and put enormous strain on our public assistance programs."