Tomorrow, The Heritage Foundation’s Robert Rector will share the following analysis in testimony before the House Judiciary Committee. Virtually no attention has been paid to the enormous costs involved in legalizing millions of low-skilled illegal aliens. One problem is that immigration reform is being negotiated by Judiciary Committee lawyers who typically have little experience in budgetary issues. Some Members who might be expected to blanch at a potential price tag of $2.5 trillion on their handiwork are kidding themselves by naively expecting that government benefits will be denied to the newly-legalized. Some know so little about tax burdens and benefit costs that they wrongly believe low-skilled workers are a net benefit to the social security system.
Giving amnesty to illegal immigrants would increase the costs outlined in this testimony. Some 50 to 60 percent of illegal immigrants lack a high school degree. Granting amnesty or conditional amnesty to illegal immigrants would, overtime, increase their use of means-tested welfare, Social Security and Medicare. Fiscal costs would go up significantly in the short term but would go up dramatically after the amnesty recipient reached retirement. Based on my current research, I estimate that if all the current adult illegal immigrants in the U.S. were granted amnesty the net retirement costs to government (benefits minus taxes) could be over $2.5 trillion.
The calculation of this figure is as follows. In March 2006, there were 9.3 million adult illegal immigrants in the U.S. Most illegal immigrants are low-skill. On average, each elderly low-skill immigrant creates a net cost (benefits minus taxes) for the taxpayer of about $17,000 per year. (This includes federal state and local government costs.) If the government gave amnesty to 9.3 million illegal immigrants, most of them would eventually become eligible for Social Security and Medicare benefits or Supplemental Security Income and Medicaid benefits.
However, not all of the 9.3 million adults given amnesty would survive till age 67. Normal mortality rates would probably reduce the population by roughly 15 percent before age 67. That would mean 7.9 million individuals would reach 67 and enter retirement.
Of those reaching 67, the average life expectancy would be around 18 years. The net governmental cost (benefits minus taxes) of these elderly individuals would be around $17,000 per year. Over eighteen years of expected life, costs would equal $360,000 per elderly amnesty recipient. A cost of $306,000 per amnesty recipient times 7.9 million amnesty recipients would be $2.4 trillion. These costs would hit the U.S. taxpayer at exactly the point that the Social Security system is expected to go into crisis. This is a preliminary estimate based on my ongoing research. More research should be performed, but I believe policy makers should examine these potential costs carefully before rushing to grant amnesty, “Z visas” or “earned citizenship” to the current illegal immigrant population.
Amnesty proponents may argue that some of these individuals will go home without getting benefits, or before they reach retirement age. Though perhaps valid, that argument only emphasizes how expensive amnesty recipients would be; the longer they remain in the country the greater the cost to the taxpayer.
Little wonder that supporters of “comprehensive” immigration reform are racing against the clock. They best hurry up and pass this EXPENSIVE bill before taxpayers already opposed to amnesty realize what it’s likely to cost them.