Quotes of the day

posted at 10:41 pm on May 6, 2013 by Allahpundit

An exhaustive study by the Heritage Foundation has found that after amnesty, current unlawful immigrants would receive $9.4 trillion in government benefits and services and pay more than $3 trillion in taxes over their lifetimes. That leaves a net fiscal deficit (benefits minus taxes) of $6.3 trillion. That deficit would have to be financed by increasing the government debt or raising taxes on U.S. citizens…

Already, illegal immigrants impose costs on police, hospitals, schools and other services. Putting them on a path to citizenship means that within a few years, they will qualify for the full panoply of government programs: more than 80 means-tested welfare programs, as well as Social Security, Medicare and Obamacare. The lifetime fiscal cost (benefits received minus taxes paid) for the average unlawful immigrant after amnesty would be around $590,000. Who is going to pay that tab?…

Our cost estimates are in some ways very conservative: The $6.3 trillion figure does not factor in the waves of unlawful immigrants who could pour into this country hoping for another future amnesty. As scholars at the Heritage Foundation and elsewhere have explained, the comprehensive immigration bill being considered in the Senate differs little from previous empty promises to secure our borders and enforce immigration laws on the books. When amnesty was granted under a similar plan in 1986, there were about 3 million unlawful immigrants; now we have more than 11 million.

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“I believe that this cost estimate of $6.3 trillion is in fact a very, very low estimate. It assumes that there are only 11.5 million illegal immigrants in the United States, I believe the actual number is considerably higher than that,” Rector, the lead author of the Heritage report on the cost of mass legalization, said during a press conference.

“It also assumes there will be no cheating, in terms of people applying for and receiving amnesty, who do not in fact deserve it,” he added. “In the 1986 amnesty, probably 25 percent of the people who received amnesty were in fact not eligible.”

Rector added that the report also has virtually no “constant dollar growth” in welfare and medical benefits for the next 50 years, and that is “almost certainly an underestimate.”

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The key flaw in Heritage’s 2007 study is its use of static fiscal scoring, rather than dynamic fiscal scoring, to evaluate that year’s immigration reform bill. “Scoring” a bill means predicting its impact on the U.S. budget in the future by estimating how it will affect future spending and tax revenue. A statically scored prediction assumes the bill will not affect the rest of the economy – which is highly unrealistic.

A dynamically scored prediction, on the other hand, assumes that the bill will affect the rest of the economy, also changing tax revenue and government spending. Since increased immigration will increase the size of the economy, it will also increase tax revenue and some government spending. It’s important to factor those increases into any scoring model. Heritage’s 2007 study did not…

A common retort to the above is that many new immigrants will be low-skilled and, because of our progressive tax system, will not pay much in taxes. Expanding the supply of laborers and entrepreneurs through immigration would increase profits, expand the production possibilities frontier, increase the return to capital, and raise incomes for most American workers who are complements. Thus, even if most future immigrants are low-skilled—and they likely will be—their positive effect on the economy would increase tax revenues indirectly.

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Douglas Holtz-Eakin, a conservative economist who once helmed the Congressional Budget Office, has estimated that the Senate’s immigration reform measure would cut the deficit by more than $2.5 trillion over the next decade alone, for example…

Critics of the 2013 study say that the 50-year horizon for calculating costs is designed to induce a level of sticker shock for Republican politicians. Looking at the bill over the standard 10-year window would show the bill actually reduces the fiscal drag from the undocumented by more than $130 billion, because those being legalized are forbidden from accessing many government support programs as they progress toward US citizenship.

“This study is designed to try to scare conservative Republicans into thinking the cost here is going to be so gigantic that you can’t possibly be for it,” said Haley Barbour, a former Republican governor of Mississippi now working with the Bipartisan Policy Center on its immigration reform efforts…

Moreover, conservatives cringe at the Heritage report’s assertion that “many conservatives believe that if an individual has a job and works hard, he will inevitably be a net tax contributor (paying more in taxes than he takes in benefits). In our society, this has not been true for a very long time.”

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For all the criticism of the report, however, I think it does one important thing by making an attempt to measure the cost of the legislation over time. Under the current design of the Gang of Eight Senate proposal, immigrants currently here illegally could become legalized after certain near-term conditions are met, but they can’t become citizens for at least 13 years, at which point they’d start becoming eligible for government benefits. The problem is the Congressional Budget Office only measures the fiscal impact of legislation over a 10-year budget window. Any estimate from the CBO, therefore, won’t be able to take into account a spike in the cost of government programs such as Medicaid or Obamacare’s health insurance exchanges as a result of newly-naturalized immigrants claiming benefits.

So, whether or not one agrees with the methodology of this Heritage study, to be useful, any analysis of the impact of immigration legislation should try to estimate costs as new citizens become eligible for government benefits. Costs in year 13 are still costs, even if they don’t show up in CBO’s projections.

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Last month, Rubio’s office put out a press release stating: “FACT: If the proposed immigration bill does pass, hundreds of thousands of illegal immigrants who do not qualify for temporary legal status will be subject to deportation. The legislation also provides for enhanced punishment as well as increased funding for deportation of future illegal immigrants. … Even for illegal immigrants who attain temporary status, that temporary status can be revoked if they commit a serious crime or if they fail to comply with the employment requirement, the public charge requirement (which goes hand-in-hand with the employment requirement), their tax obligations and their physical presence obligations. They will then be subject to deportation.”…

The “public charge” requirement stipulates no immigrant can obtain a green card unless they can verify that they are earning at least 25 percent above the poverty level. But as today’s Heritage Foundation study points out, more than one-third of unlawful immigrant households have incomes below the federal poverty level. That is about 4 million people.

Does Rubio really expect conservatives to believe that the Obama (or Clinton) administration will round up 4 million immigrants and deport them just because they are poor?

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Senators and their immigration reform allies insist the goal of 70-plus votes laid out last month by Gang of Eight leaders Sens. Chuck Schumer (D-N.Y.) and John McCain (R-Ariz.) is more than just attainable under the right circumstances — it’s imperative. The legislative strategy for passing a bill is based largely on the theory that an overwhelmingly bipartisan vote in the Senate is essential to getting it through the Republican-controlled House…

“The key is Rubio,” said Aguilar, executive director of the Latino Partnership for Conservative Principles. “Without Rubio, this bill would not get anywhere with Republicans. He gives them the cover.”

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Via Mediaite.

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