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Calculating the Cost of Amnesty

Citizenship rally in Washington, April 10 (Getty Images/Alex Wong)

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The Heritage Foundation has undertaken to back a plausible theory with numbers. The theory is that the amnesty contained in the immigration bill before Congress will cost taxpayers plenty; it is plausible because we have a large redistributive state, and many of the illegal immigrants to whom this bill will grant legal status — and the relatives their legal status will allow them to bring here — will be net recipients of government benefits.

The Heritage researchers assess, in substantial detail, the current benefits received and taxes paid by illegal immigrants and what those numbers will look like after legalization on the terms proposed by the Senate’s bill. The federal government currently spends about $50 billion more on illegal immigrants than it receives from them in taxes each year; after amnesty and an interim period in which access to benefits is restricted, that gap will open to about $100 billion. This adds up to $6.3 trillion in benefits that legal taxpayers will have to fund for legalized immigrants over their lifetimes; some of those benefits would have to be provided in the absence of amnesty, but a large fraction would result from the legislation.

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Supporters of the bill are pointing out, quite correctly, that Heritage has not performed a complete analysis of the bill’s effects. The report looks only at the bill’s provisions affecting illegal immigrants, and not, for example, at its guest-worker programs. Further, Heritage does not claim to forecast the bill’s effects on the overall economy, and therefore does not include these effects in its calculation of the cost to taxpayers. Theirs is a “static,” not a “dynamic,” score.

So far, though, the Heritage analysis is the best available, and the attempts by supporters of the bill to produce dynamic analyses that further their cause have been sketchy at best. The American Action Forum released a highly optimistic assessment of the benefits of higher immigration levels, calculating that GDP growth would rise by about a percentage point in the near term, which by itself would reduce the budget deficit by about $2.7 trillion over ten years. Liberal critics of dynamic scoring have always said that it is merely wishful thinking, and in this case the criticism holds. The Forum not only ignored entirely the impact of amnesty and of higher immigration levels on the cost of federal welfare programs, but relied on fanciful and discredited assumptions about the economic benefits of immigration. Their effort should be dismissed out of hand.

We may yet get something better. The Congressional Budget Office has said that it will take account of some of the bill’s possible effects on the economy in assessing the Gang of Eight’s proposals, and their attendant effects on economic growth, revenues, and fiscal outlays. Yet the CBO, too, will not produce a complete assessment. It will look at a ten-year budget window: Conveniently, the Gang of Eight’s bill bars amnestied immigrants from receiving most federal benefits for ten years; after that, the costs will stack up. In addition, the CBO does not take into account the Medicare and Social Security liabilities that amnestied illegal aliens will begin accruing immediately. Nonetheless, their approach provides hints as to what a true dynamic scoring might look like, and other such assessments will be worthwhile.

Economic interests should not be the sole determinant of our immigration policy. If granting legal status to illegal immigrants were a requirement of justice, we would just have to pay whatever costs it entailed. Senator Marco Rubio has, to his credit, said clearly that he does not agree with this view of justice: Legal status is something we provide, he argues, because it serves our interests as part of a larger reform. That means we have to know the costs and the benefits. Heritage has gone farther than anyone else so far in putting numbers on them. If supporters of the legislation have any better analysis to offer, now’s their chance.



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