Thread: The cost approach

On the Lou Dobbs Hazelton special I believe that the final speaker was Robert Rector of the Heritage Foundation (please correct me if I am wrong). He got cut short but he made a compelling point about the amnesty that our elected officials are pushing. I believe after he stated the financial cost of 1 illegals lifetime (1 million $$) he said that congress was in no way informed enough about the financial implications of an amnesty, and they have no right to carelessly push this on our country. Since we can't seem to get through to them on the cultural or even crime/DUI stats, I am planning on writing the pro-amnesty senators/congressmen with these financial FACTS. I'll post two articles, the first was posted by Kate before in April, and the other may be posted here somewhere but I want it on one thread for reference when I am emailing. Thought maybe some of you would like to use this angle to get through to the knuckleheads as well.

April 10, 2007
By Byron York

When George W. Bush visited the U.S. Border Patrol’s Yuma Station Headquarters in Arizona Monday — for the second time in a year — his message on illegal immigration sounded a bit tougher than in the past. “Illegal immigration is a serious problem — you know it better than anybody,” he told a group of border agents. “It puts pressure on the public schools and the hospitals, not only here in our border states, but states around the country. It drains the state and local budgets…Incarceration of criminals who are here illegally strains the Arizona budget. But there’s a lot of other ways it strains the local and state budgets. It brings crime to our communities.”

The president touted his get-tough-on-the-border policies, enacted under pressure from the then-Republican Congress, and singled out Operation Jump Start, under which National Guard troops assist border agents. But he also stressed the need for “comprehensive” reform, and when he did his message sounded like the George W. Bush of old. “Past efforts at reform failed to address the underlying economic reasons behind illegal immigration,” the president said. “People are coming here to put food on the table, and they’re doing jobs Americans are not doing.”

With those words, the president was revisiting the great question in the debate over illegal immigration: Is the presence of illegal immigrants, mostly from Mexico, a boon to the U.S. economy, or a drag? It’s a question that has long divided Bush supporters; the Wall Street Journal editorial page tells us that a lenient immigration policy is absolutely vital for American prosperity, while enforcement-first advocates tell us a strict policy is the only thing that will ensure continued economic health.

Both have plenty of statistics to cite to make their case. But now a scholar at the Heritage Foundation, Robert Rector, has found a new and revealing way to get at the answer.

Rector has just published a study, “The Fiscal Cost of Low-Skill Households to the U.S. Taxpayer,” that is ostensibly not about immigration at all. He takes the most detailed look yet at the economics of the 17.7 million American households made up of people without a high-school degree. With numbers from the Census Bureau, the Congressional Research Service, the Bureau of Labor Statistics, and other government agencies, Rector found what they make, what they spend, and how much they receive in government services.

The reason Rector chose to look at low-skilled workers is that it is estimated that nearly two-thirds of illegal immigrants fall into that category. (By way of comparison, slightly less than ten percent of native-born Americans are in that group.) By focusing on those workers, Rector was able to make use of information on them that is more detailed and precise than information on immigrants as a whole. And any conclusions he reached would be applicable to a large majority of illegal immigrants who are already in this country as well as those who would come here under various immigration reform proposals.

Rector began by calculating the dollar value of the benefits those low-skill workers receive from the government. There are direct benefits, like Medicare and Social Security, and means-tested benefits, like food, housing and medical benefits specifically for low-income people. Then there is public education, along with population-based services like police and fire protection, parks, and roads. (Those services benefit everyone, and their cost usually increases as the population increases.) After that, there is interest on the public debts, a burden spread throughout all income groups, and the cost of what Rector calls “pure public goods” — national defense, scientific research, and a few other areas — which benefit everyone but do not necessarily rise in cost as the population rises.

Rector found that in 2004, the most recent year for which figures are available, low-skill households received an average of $32,138 per household — the great majority in the form of means-tested aid and direct benefits. (Rector excluded from that figure the cost of public goods and interest; with those included, he says, each low-skill household receives an average of $43,084.) Against that, Rector found that low-skill households paid an average of $9,689 in taxes. (The biggest chunk of that was the Social Security tax — $2,509 — followed by state and local taxes, consumption taxes, property taxes, and federal income taxes, but Rector counted everything, including highway levies and lottery purchases.) In the final calculation, he found, the average low-skill household received $22,449 more in benefits than it paid in taxes — the $32,138 in benefits, excluding public goods, minus the $9,689 in taxes.

Taking that $22,449, and multiplying it by the 17.7 million low-skill households, Rector found that the total deficit for such households was $397 billion in 2004. “Over the next ten years the total cost of low-skill households to the taxpayer (immediate benefits minus taxes paid) is likely to be at least $3.9 trillion,” Rector writes. “This number would go up significantly if changes in immigration policy lead to substantial increases in the number of low-skill immigrants entering the country and receiving services.”

From a purely money perspective, it’s a powerful argument. At a cost of $22,449 per household per year — well, multiply that by an adult lifespan of 50 years and you have an average lifetime cost to the taxpayer of $1.1 million per unskilled worker. Increase that population with a wave of unskilled immigrants, and you’re talking a lot of money.

There’s probably room for argument on Rector’s exact numbers. Jeffrey Passell, a senior research associate at the Pew Hispanic Center, questions whether some of Rector’s cost estimates might be too high. For example, the arrival of new illegal immigrations will likely not raise the cost of defending the country, he says, so perhaps future immigrants will not be quite as expensive as Rector claims. (Rector tried to address that issue by excluding the cost of pure public goods in the $22,449 figure.) Still, Passell does not question the basic premise of Rector’s report. “One of the purposes of our government is to provide support for people on the low end,” says Passell. “Of course there is a bit more spending on households on the lower end than on the high end, and of course the low-income households don’t pay as much as the high-income households. That’s not surprising.”

The bigger argument over Rector’s approach is whether illegal immigrants bring economic benefits that outweigh their undisputed costs. Tamar Jacoby, an advocate of comprehensive reform who is a senior fellow at the Manhattan Institute, points to a study done recently of immigrants in North Carolina which estimated that in the past ten years Hispanic immigrants had cost the state $61 million in benefits while being responsible for more than $9 billion in economic growth. “Yes, the individual might cost more in services,” says Jacoby, “but they are growing the pie so significantly that that cost pales in comparison.”

Not so, says Rector. “The problem is, the growth to the pie that they make, they eat,” he explains. The economic growth reflected in the numbers, he says, is what the immigrant workers are making. “To the extent that they make the pie grow any bit more than what they take out of the pie in wages, it is very subtle, and it would be a tiny fraction of the gross domestic product growth,” Rector says.

And that means something for the immigration debate, and for George W. Bush’s proposals. “Every one of these [reform] bills envisions bringing in millions and millions of additional low-skill immigrants with the right to access welfare and become citizens,” says Rector. “Within ten years, you would have four million of these individuals, each of whom can bring family. You’d be looking at a cost of $80 billion per year.” Perhaps Congress and the president will decide to do that. But if Robert Rector is correct, no one should underestimate the cost.

http://article.nationalreview.com/?q=ZT ... ZlOWJkNDk=

The Wrong Course
The Senate’s proposed amnesty will cost a fortune.

By Robert Rector

Congress is in the midst of the most dramatic overhaul of our nation’s immigration laws in 80 years. So why is hardly anyone is asking the basic question, How might this affect government costs?

In the case of the leading reform proposal, a measure sponsored by Sens. Mel Martinez (R., Fla.) and Chuck Hagel (R., Neb.), we have an answer: It would raise them substantially. The bill would grant amnesty to about 10 million illegal immigrants and put them on a path to citizenship. Once they become citizens, the net addi*tional cost to the federal government of benefits for these individuals will be around $16 billion per year. The bill would also spur a rapid new flow of low skill immigrants through its program for “guest workers” (for life, that is) and other provisions.

To make matters worse, once an illegal immigrant becomes a citizen, he has the right to bring his parents to live in the U.S. The parents, in turn, may become citi*zens. The long-term cost of government benefits for the parents of 10 million recipients of amnesty could be $50 billion per year or more. In the long run, the Hagel-Martinez bill, if enacted, would be the largest expansion of the welfare state in 35 years.

Welfare can be defined as means-tested aid pro*grams; these programs provide cash, non-cash, and social service assistance that is limited to low-income households. The major means-tested pro*grams include Food Stamps, Temporary Assistance to Needy Families, public housing, the earned income credit, and Medicaid. Historically, recent immigrants were less likely to receive welfare than native-born Americans.

But over the last 30 years, this historic pattern has reversed. As the rel*ative education levels of immigrants fell, their ten*dency to receive welfare benefits increased. By the late 1990s, immigrant households were 50 percent more likely to receive means-tested aid than native-born households. Moreover, immigrants appear to assimilate to welfare use. The longer immi*grants live in the U.S., the more likely they are to use welfare.

The picture for illegal immigrants, who would receive amnesty under the bill, is even more alarming. Roughly half of current illegal immigrants are high-school dropouts. Use of welfare among legal immigrants who are high-school dropouts is three times the rate for the U.S. native born population as a whole; the rate for low-skill immigrants granted amnesty would be similar. Overall, welfare costs added by this group would be quite high.

Illegal immigration is now a major cause of child poverty. According to the Pew Hispanic Center, 4.7 mil*lion children of illegal immigrant parents currently live in the U.S. Some 37 percent of these children are poor. While children of illegal immigrant par*ents make up around 6 percent of all children in the U.S., they are 11.8 percent of all poor children.

This high level of child poverty among illegal immigrants in the U.S. is in part due to low edu*cation levels and low wages. It is also linked to the decline in marriage among Hispanics in the U.S. Within this group, 45 percent of children are born out of wedlock. Among foreign-born Hispanics the rate is 42.3 percent. By con*trast, the out-of-wedlock birth rate for non-Hispanic whites is 23.4 percent. The birth rate for Hispanic teens is higher than for black teens. While the out-of-wedlock birth rate for blacks has remained flat for the last decade, it has risen steadily for Hispanics. These figures are important because, as noted, some 80 percent of illegal aliens come from Mexico and Latin America.

In general, children born and raised outside of marriage are seven times more likely to live in poverty than chil*dren born and raised by married cou*ples. Children born out of wedlock are also more likely to be on welfare, to have lower educational achievement, to have emotional problems, to abuse drugs and alcohol, and to become involved in crime.

The federal government currently operates a massive system of income redistribution: The upper-middle class is taxed, and money and services are transferred to the lower-income half of the population. In 2004, some $583 billion was transferred in this way. Current immigration in the U.S. disproportionately brings poorly educated individuals with a high probability of unwed births into the U.S. Over the last 20 years, around 10 million indi*viduals without a high-school diploma have entered the United States. These individuals inevitably end up on the recipient end of the income-redistribution equation, providing an extra tax burden on the already hard-pressed middle-class taxpayers.

There is a remarkably foolish idea now running through the Senate, that the key to solving the Social Security crisis is to import into the U.S. tens of millions of low-skill immigrants, earning perhaps $20,000 per year, along with their families. The folly of this should be apparent. For most of these individuals, receipt of the earned income tax credit alone will outweigh Social Security taxes paid. The overall costs such individuals will add to government programs throughout their lifetime (including welfare, social security, Medicare, education for children, transportation, and law enforcement) will greatly exceed taxes paid.

Immigration to the U.S. is a privilege, not a right. Immigrants should be net contributors to the government and society and should not be a fiscal burden. To reduce the looming Social Security deficit and to strengthen the nation, the U.S. should encourage immigration of high-skill workers who will be fiscal contributors, not low-skill workers who will be fiscal takers. In this respect, the Hagel/Martinez bill is on the wrong course; it will make the finance books of government worse, not better.

—Robert Rector is a senior research gellow in domestic-policy studies at the Heritage Foundation.

http://article.nationalreview.com/?q=Mz ... FhNzgzNTQ=

Sent to Luis "open borders" Gutierrez

Dear Mr. Gutierrez -
I strongly disagree with your stance on illegal immigration. I have strong feelings against amnesty (of any kind) for many reasons, but recently the financial implications have been brought to my attention. I agree with Robert Rector of the Heritage Foundation when he said that congress is not educated enough of the financial implications to make this kind of decision for our country. Amnesty for illegal immigrants puts our country and it's citizen services in grave danger. According to studies, illegal immigrant low-skill workers use more services than they pay taxes for. What benefit would it be for this country to adopt millions and millions of low-skill workers? What about the skilled immigrants from countries that don't border ours that are waiting their turn and paying their dues? Here are a couple articles for you to read to educate yourself on the disaster you are so passionately embracing. The facts speak for themselves.
http://article.nationalreview.com/?q=ZT ... ZlOWJkNDk=

http://article.nationalreview.com/?q=Mz ... FhNzgzNTQ=

Please reconsider your stance on this dangerous amnesty that you are pushing. It is the wrong answer for American citizens.

Thank you,

Umm, they expect YOU to pay for it. If you don't, you are an anti-immigrant racist. If you complain, you might be liable for hate crime charges. And I bet you thought Communism was defeated.

Well all I can say is look at who won in France. If this BS keeps up that kind of politician will win most races here soon.

I have heard Rector say on several occasions that Congress is either clueless about the costs, or they are aware of the costs but just don't care.

Can you believe this? Members of Congress don't care to have or consider such fundamental facts as the cost of amnesty when we know it will be staggering and will destroy this country. No wonder we have a $8.8 trillion national debt, and they want to multiply this by giving amnesty, and SS benefits to Mexico.

We've been using this in our communication.

It's quite amazing that there hasn't been a REQUEST FOR A COST ANALYSIS by these legislators who are pushing for

The HAIL MARY AMNESTY BILL

They either have NO CLUE or won't spill the beans about the huge -by TRILLIONS - cost to Americans that their sham would suck down the proverbial AMNESTY DRAIN.

The Iraq War would be a BLIP on the screen compared to this!

All these OBL's and politicians can argue anything they like, but you can't debate the numbers. There is no defense.

I'm just guessing that the only way to get through to a liberal democrat is to talk money. They can't seem to understand morality, values or patriotism to their country.