As the Senate’s Gang of Eight prepares to bring their immigration plan up for a vote, the usual players are coming out of the woodwork to scare lawmakers into voting no. Chief among them is the Heritage Foundation, which released a report today that uses some rather crude accounting to claim that immigration reform would add $6.3 trillion to fiscal deficits over the next several decades. Major economists on both the left and right beg to differ, but the report’s bad math is small potatoes compared to its troubling view of the average American taxpayer.
Let’s start with the basics. Heritage looks at the average value of government benefits received by undocumented, lawful immigrant and low-education households and compares it to the value of the tax receipts those households pay. Many of those households, on paper, receive more in government benefits than they pay in taxes. Heritage looks at projected demographic changes caused by immigration reform over the next fifty years and does some basic multiplication to come up with the $6.3 trillion number. It gives the impression that immigration reform would be the nail in the coffin for U.S. fiscal policy over the coming decades. Luckily we have some smart people on both sides of the debate telling us that it is total bunk.
In 2006, the Congressional Budget Office scored an earlier Senate proposal that contains many of the same policies as actually reducing the ten year fiscal deficit by $12 billion. David Bier at the Competitive Enterprise Institute, a major free-market public policy group, recently concluded that a more ambitious immigration program that actually allows more guest workers into the country would “boost the economy [and] protect American businesses,” and he isn’t alone. The right-leaning Manhattan Institute for Policy Research has put out a report that argues, “Embracing a more flexible legal immigration system can dramatically improve” the country’s fiscal situation.
So with so many smart people arguing for the economic benefits of immigration, what is driving the Heritage report? It has a lot to do to with contempt for the average American taxpayer, regardless of their immigration status.
“Following amnesty, the fiscal costs of former unlawful immigrant households will be roughly the same as those of lawful immigrant and non-immigrant households with the same level of education. Because U.S. government policy is highly redistributive, those costs are very large.”
In essence the problem isn’t immigrants – it’s poor people.
In the view of Heritage, most households are “net tax consumers” and take in more in benefits than they provide in taxes. They argue these people are a drag on the economy and that reducing the number that come into the country is a good thing. However, using Heritage’s methodology, these immigrants are economically identical to “non-immigrant” households, i.e. existing citizens. It stands to reason that shipping these people out of country would be good for the economy, as well. Of course that is absurd. Shrinking populations generally are not good for growth – just ask Russia and Japan. But that’s the logical conclusion of the Heritage’s reasoning.
So the report isn’t really about immigration as much as it’s a rehash of Heritage’s existing concerns with mainstream fiscal policy. That said, I’d encourage the Heritage staffers to submit their tax returns so we can evaluate whether or not they are worthy of legal status.