Thread: HERITAGE FOUNDATION REJECTS WHITE HOUSE ARGUMENT THAT AMNESTY 'CREATES JOBS'

HERITAGE FOUNDATION REJECTS WHITE HOUSE ARGUMENT THAT AMNESTY 'CREATES JOBS'



by MATTHEW BOYLE 27 Aug 2013, 11:50 AM PDT 22POST A COMMENT
The Heritage Foundation’s Robert Rector on Tuesday criticized President Barack Obama’s White House and establishment Republicans on Tuesday for claiming that amnesty for illegal immigrants would create jobs.

“The White House last week released a report claiming that granting amnesty and citizenship to illegal immigrants would increase the income of Americans by $791 billion over the next decade,” Rector, an expert on the economic impacts of immigration, wrote. “Most of this bump in income would go to the former illegal immigrants themselves, but the White House also claimed that amnesty would add roughly 2 million new jobs over the same period.”
Rector notes that Obama’s White House’s information is “based on a report from the Center for American Progress (CAP).” CAP is a far leftwing group founded by former Clinton White House Chief of Staff John Podesta and funded by leftwing billionaire George Soros, a supporter of amnesty. This particular CAP report that the White House used, Rector notes, actually “assumed that if illegal immigrants were granted amnesty and citizenship, their wages would increase by a full 25 percent.”
“This is an extreme assumption,” Rector wrote. “Data from the federal government’s last amnesty for illegal immigrants, in 1986, indicate a wage increase of roughly 5–10 percent.”
Rector wrote that the White House’s argument that an amnesty would create 2 million jobs and simultaneously boost Americans’ income by $130 billion were “generated by the CAP authors’ Keynesian economic assumptions,” which were that the “hypothetical increase in the wages of amnesty recipients generates greater consumer demand; this, in turn, ‘ripples through the economy,’ creating new jobs and higher income.”
“Such simplistic assumptions, in which boosting consumer demand or government deficit spending is the pathway to national prosperity, have been discredited for decades,” Rector wrote. “Nonetheless, the left habitually uses Keynesian economics to argue that spending on welfare programs such as food stamps boosts jobs and gross domestic product.”
Rector argued that while “it is no surprise” Obama’s White House “would use outmoded Keynesian theories to promote amnesty and vastly increased immigration,” it is surprising to see Republicans advocating in favor of amnesty “buying the Keynesian snake oil.”
As Breitbart News reported last week, GOP establishment figure, former Congressional Budget Office (CBO) director, Doug Holtz-Eakin appears to be violating American Economic Association (AEA) standards through data released by his American Action Forum (AAF) and its sister group American Action Network (AAN), run by former Sen. Norm Coleman (R-MN). Upon request, the groups have not released economic assumptions made to argue amnesty creates jobs.
But the information the group did release shows that Holtz-Eakin’s team is using, as Breitbart News reported, data compiled by a series of liberal foundations, and that Obama’s White House has relied on the same data before as well.
Rector also wrote on Tuesday that the White House and CAP “ignore the obvious fact” that any amnesty would mean illegal alien recipients would eventually each qualify for Social Security, Medicare, Obamacare, and the more than 80 means-tested welfare programs like food stamps and housing programs. Since the average illegal alien is 34 years old and has a 10th-grade education as Rector notes, they are “voracious tax consumers” in that “government benefits they receive vastly exceed the taxes they pay.”
“Under the Senate-passed amnesty bill (S. 744), each current illegal immigrant would receive more than $900,000 in government benefits over his lifetime while paying around $300,000 in taxes—a net cost of more than $600,000 to taxpayers,” Rector wrote. “Even if the wages of amnesty recipients were to soar by 25 percent, the long-term costs per recipient would be more than $500,000. The overall cost to taxpayers after amnesty, as Heritage has calculated, is likely to exceed $6 trillion.”


http://www.breitbart.com/Big-Governm...y-creates-jobs

http://www.alipac.us/f9/amnesty-11-m...s-22-a-278794/

http://www.alipac.us/f9/real-cost-amnesty-280250/

http://www.alipac.us/f9/24-million-i...illion-279886/

Robert Rector

August 27, 2013 at 9:40 am
heritage.org



The White House last week released a report claiming that granting amnesty and citizenship to illegal immigrants would increase the income of Americans by $791 billion over the next decade. Most of this bump in income would go to the former illegal immigrants themselves, but the White House also claimed that amnesty would add roughly 2 million new jobs over the same period.

Where did these figures come from? The White House document is based on a report from the Center for American Progress (CAP). The CAP study assumed that if illegal immigrants were granted amnesty and citizenship, their wages would increase by a full 25 percent. This is an extreme assumption. Data from the federal government’s last amnesty for illegal immigrants, in 1986, indicate a wage increase of roughly 5–10 percent.

The White House report asserts that granting citizenship to illegal immigrants would create nearly 2 million new jobs for current citizens over the next decade and boost their income by roughly $130 billion over the same period. These figures are generated by the CAP authors’ Keynesian economic assumptions: The hypothetical increase in the wages of amnesty recipients generates greater consumer demand; this, in turn, “ripples through the economy,” creating new jobs and higher income.

Such simplistic assumptions, in which boosting consumer demand or government deficit spending is the pathway to national prosperity, have been discredited for decades. Nonetheless, the left habitually uses Keynesian economics to argue that spending on welfare programs such as food stamps boosts jobs and gross domestic product.

It is no surprise that the Obama White House would use outmoded Keynesian theories to promote amnesty and vastly increased immigration. It is surprising that so many Republicans in the House appear to be buying the Keynesian snake oil.

Moreover, both the White House and the CAP study ignore the obvious fact that amnesty and citizenship would make 11.5 million illegal immigrants eligible for Social Security, Medicare, Obamacare, and more than 80 different means-tested welfare programs such as food stamps and public housing. The average illegal immigrant is 34 years old and has a 10th-grade education. At that age, education levels would increase very little after amnesty.

Both U.S. citizens and current legal immigrants with such education levels are voracious tax consumers: The government benefits they receive vastly exceed the taxes they pay. For example, legal immigrants without a high school diploma receive $5 in government benefits for every $1 in taxes paid each year. This imposes an annual net cost of $37,000 per household on taxpayers.

Under the Senate-passed amnesty bill (S. 744), each current illegal immigrant would receive more than $900,000 in government benefits over his lifetime while paying around $300,000 in taxes—a net cost of more than $600,000 to taxpayers. Even if the wages of amnesty recipients were to soar by 25 percent, the long-term costs per recipient would be more than $500,000. The overall cost to taxpayers after amnesty, as Heritage has calculated, is likely to exceed $6 trillion.

http://blog.heritage.org/2013/08/27/...ian-economics/

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