I received this e-mail from Kerrie Rushton at the White House:
I wanted to take a moment to respond to your post this morning, “Spending Fights.”
The claim that retirement costs will be $2.6 trillion is unrealistic and misleading. It assumes that there is no emigration from the U.S. (even though out migration is significant for the foreign born); assumes that all unauthorized workers have the fiscal profile of high school dropouts (even though only about half of the unauthorized have less than a high school degree); and doesn’t bother to account for the taxes the workers or their descendants will be pay into the retirement system. These assumptions artificially inflate the supposed “costs.”
According to a recent paper from the White House Council of Economic Advisers, immigrants slightly improve the solvency of pay-as-you-go entitlement programs such as Social Security and Medicare. The 2007 OASDI Trustees Report indicates that an additional 100,000 net immigrants per year would increase the long-range actuarial balance by about 0.07% of taxable payroll.
Furthermore, the CBO also concluded temporary workers, Z visa holders, and future legal immigrants under the Senate bill will have a positive financial impact on Social Security and Medicare. Also, SSA’s Chief Actuary has evaluated the Senate immigration bill and estimates that it will reduce the long-range Social Security deficit by 0.04% of payroll.
As always, the White House appreciates the chance to respond directly on The Corner.
ME: We welcome the White House’s interest in engaging on the immigration bill’s price tag. A demonstrated familiarity with Robert Rector’s research would also be welcome. His research focuses exclusively on the costs of low-skilled illegal aliens, i.e. those without a high-school education who would be granted amnesty under the Senate bill. About 50 to 60 percent of illegal aliens fit this profile. The increased chain migration the bill provides for over the next several years will include millions of family members and about 38 percent of them will also lack a high-school degree. Government estimates that don’t confine their analysis to the fiscal impact of low-skilled aliens aren’t responsive to Robert Rector’s conclusions.
The fact that native-born, low-skilled dropouts impose net costs is unremarkable. They consume more in benefits and services than they pay in taxes, including Social Security taxes. But when government data based on their net costs is applied to their foreign-born counterparts, amnesty supporters respond as though something wholly novel and controversial is being asserted.
The Council of Economic Advisers did find that in the long-run immigrants’ descendants provide a fiscal benefit. Make that the really, really long-run. Last week’s CEA report found that immigrants’ costs would be offset by taxes paid by their descendants in 300 years. That would be by 2407.






Comments