Amnesty for Entitlements?
Illegal immigration strains the welfare state. So shrink the welfare state.


Daniel Foster

I’m reluctant to wade into the debate over Heritage’s immigration study — which claims amnestying 11 million illegals will cost taxpayers a net $6.3 trillion over the immigrants’ lifetimes — because, unlike gleeful congressional Democrats and most of the political press, I don’t get off on cannibalism, especially when it’s the less bad of the two major parties that’s ingesting itself.

But the truth is, I’m with Jim Pethokoukis, Americans for Tax Reform, Cato, the American Enterprise Institute, the American Action Network — and let’s just throw in every centrist and center-right pro-amnesty group that saw fit to flood my inbox with press releases yesterday — in concluding that the Heritage study gives a flawed and incomplete picture of the economic impact of the immigration bill.

Simply put, the Heritage study looks at the difference between the amount of taxes paid and the value of government transfers received by the average illegal alien and extrapolates the $6.3 trillion figure from there. What it doesn’t do is factor in the “dynamic” effects on the economy, and in turn on government coffers, of bringing those people into the system. The “static” scoring of the Heritage study, which goes against the think tank’s — and conservatives’ — habitual call to consider the behavorial impact of laws, assumes both maximal dependency and zero economic mobility for the illegal-immigrant population. As Doug Holtz-Eakin put it: “There is no American dream. They start in poverty. They end in poverty. Their kids are in poverty.” It also flatly ignores the economic effects of other aspects of the bill, like more H-1B visas for high-skilled labor and an expanded guest-worker program.

Of course, acknowledging the flaws in the Heritage document doesn’t mean admitting that mass amnesty is a good idea. Nor does it preclude us from acknowledging that the study gets at other important truths. Indeed, Heritage’s critics on the right, almost to a man and woman, seem to agree that its most important conclusion is that the welfare state is too big. Here is the Manhattan Institute’s Diana Furchtgott-Roth (an NRO contributor) in an otherwise critical post at RealClearMarkets:

Table 7 of the report shows that in the “interim phase,” after immigrants have received legal status but before they qualify for welfare benefits, the fiscal deficit per household declines by $2,000 per year. After the interim phase, which could take 5 to 15 years, the deficit rises by $15,000 annually from current levels, primarily due to increased spending on healthcare and means-tested benefits. One solution: cut benefits.

That is, supposing amnesty for illegal immigrants would place a greater strain on the welfare state, the solution is to pare back the welfare, not the immigrants. Blunt, to be sure, but not unreasonable!

Again, the Heritage report doesn’t settle the empirical question of whether amnesty would create a net drag on the American taxpayer. But if it did, paring back the welfare state could certainly help make it “pencil out,” and it would go a ways toward again making America the kind of country that can have a functional immigration system. Think about it: In 1890, it was easy to have mass immigration because you had a voracious industrializing economy, vast reserves of untapped resources and land, and a government that guaranteed a set of business-friendly negative liberties and not much more. That’s what living in America used to entail. Now it entails a complex web of entitlements and resource transfers, dramatically raising the stakes for decisions about whom we let in and whom we keep out.