Wednesday, June 27, 2007

White House Report Hides the Real Costs

In another follow-up on the Heritage report about the costs of this amnesty bill, Robert Rector answers the White House.It is a long response but well worth reading. An excerpt:

Last week, the White House Council of Economic Advisers issued a report entitled "Immigration's Economic Impact" which defended the President's promotion of the Senate's "comprehensive" immigration legislation (S.1348).[1] On June 25, the White House issued a follow-up editorial elaborating on the points made in the CEA report.[2] These publications criticized Heritage Foundation research on the fiscal costs of low skill immigration and amnesty.

The Heritage research criticized by the White House made the following basic points about immigration and its costs:

  1. Individuals without a high school degree impose significant net costs (the extent to which benefits and services received exceed taxes paid) on taxpayers.
  2. The net fiscal cost of families of immigrants who lack a high school degree is not markedly different from the net fiscal cost of families of non-immigrants who lack a high school degree.
  3. Immigrants are disproportionately low skilled; one-third of all immigrants and 50 to 60 percent of illegal immigrants lack a high school degree.
  4. Unlike low and moderate skill immigrants, immigrants with a college education will pay more in taxes than they receive in benefits; therefore. immigration policy should increase the number of high skill immigrants entering the country and sharply decrease the number of low skill, fiscally dependent immigrants.[3]

Heritage research has shown that low skill immigrants (those without a high school degree) receive, on average, three dollars in government benefits and services for each dollar of taxes they pay. This imbalance imposes a net cost of $89 billion per year on U.S. taxpayers. Over a lifetime, the typical low skill immigrant household will cost taxpayers $1.2 million.[4]

Future taxpayer costs will be increased by policies which increase (1) the number of low skill immigrants entering the U.S., (2) the length of low skill immigrants' stays in the U.S., or (3) low skill immigrants' access to government benefits and services. Unfortunately, this is exactly what the Senate immigration bill does:

  • The bill would triple the flow of low skill chain immigration into the U.S.
  • By granting amnesty to at least 12 million illegal immigrants, the bill would greatly lengthen their stay in the U.S., particularly during retirement years.
  • The bill would grant illegal immigrants access to Social Security and Medicare benefits and, over time, to more than 60 different federal welfare programs.
  • Although the bill does not currently permit Z visa holders to bring spouses and children in from abroad, this would likely be amended at some future point on humanitarian grounds, resulting in another 5 million predominantly low-skill immigrants entering the country.

Heritage research has concluded that the cost of amnesty alone will be $2.6 trillion once the amnesty recipients reach retirement age.

In an effort to defend the Senate bill, the White has contested these conclusions. As described below, many of the assertions made by the White House are inaccurate or misleading.