The stodgy conservatives over at the Heritage Foundation released a long-expected report today that blasts immigration reform as an economic drain. The report, which is expected to be influential among conservative legislators, comes as the Senate Judiciary Committee begins work on its massive reform bill this week. A similar Heritage report is credited with helping to derail a previous reform effort, in 2006.
The paper is authored by Robert Rector, who came to fame as a key conservative thinker during the 1996 dismantling of family welfare, and his colleague Jason Richwine. The two claim that the “net increased fiscal costs generated by amnesty”—by which they mean the 13-year path to citizenship in the Senate bill—will cost $6.3 trillion in benefits and services for legalized immigrants over the next 50 years.
Put simply, the Heritage Foundation’s report is misleading. It focuses only on what the government spends in services and programs, minus what immigrants pay in taxes, while ignoring the vast economic contributions of immigrant communities. Nearly every independent analysis shows that immigration and immigration reform bring net economic growth. Rather than acknowledge this reality, the Heritage report reinforces a familiar trope about people of color as “takers,” a cultural rather than economic argument that conservatives have consistently invoked when trying to cut safety net programs.
A Flawed Analysis
There are lots of problems with the report. But quickly, here’s their claim. Because most newly legalized immigrants are low-income, legalization will cost the government $6.3 trillion more in benefits and services than newly legalized immigrants will pay in taxes over the next five decades. The bulk of that spending, they say, is on public education, the safety net, social security and health care. They’re most concerned with paying for school for kids and social security for aging immigrants.
Without digging into whether those calculations are right on their face, the report misses most of the story about immigrants’ relationship to the economy. As with anyone, immigrant communities’ economic impact is more than just how much any given family receives in benefits minus how much we pay in taxes. That’s why the Congressional Budget Office plans to use a so-called dynamic scoring method when it analyzes the immigration bill.
As the Washington Post’s Dylan Matthews writes:
They also assume [immigration reform has] no other economic impact of any kind. That’s so implausible that even the CBO, which is famously conservative with regards to incorporating economic effects of policies, took direct economic effects of adding people to the workforce into account when evaluating the 2006-7 reform bill. They found that legalization, even paired with increased border security spending, would mildly cut the deficit over 10 years, by about $12 billion.
The CBO plans a similar analysis this year.
Even some on the right side of the GOP challenge the Heritage methodology. Sen. Paul Ryan, R-Wisc., said in a statement, “The Congressional Budget Office has found that fixing our broken immigration system could help our economy grow. A proper accounting of immigration reform should take into account these dynamic effects.”
Missing The Point
The Heritage report accurately notes that CBO analyses look only 10 years into the future, which means it won’t account for additional benefits that that these immigrants will be eligible for if they become citizens. Immigrants on the 10-year provisional path to citizenship will be denied access to all government programs, including Obamacare healthcare exchanges. But existing research on immigration suggests that legalization provides a boon to the economy in the long term by increasing immigrants’ economic prospects in the future.
Take this research from the Immigration Policy Center on the 1986 immigration reform legislation. Rector and Richwine claim that immigrants are a drain because in aggregate those who are given legal status will remain poor and uneducated. But the IPC analysis finds precisely the opposite to be true. In the years after the 1986 Immigration Reform and Control Act:
the educational attainment of IRCA immigrants increased substantially, their poverty rates fell dramatically, and their home ownership rates improved tremendously. Moreover, their real wages rose, many of them moved into managerial positions, and the vast majority did not depend upon public assistance.
And immigrants tend to stimulate the economy by starting businesses. Here’s what the Brookings Institute has to say:
immigrants are 30 percent more likely to form new businesses than U.S.-born citizens…Such investments in new businesses and in research may provide spillover benefits to U.S.-born workers by enhancing job creation and by increasing innovation among their U.S.-born peers.
The same is true for of immigrants who don’t have lots of education, especially at the local level where immigration has for years been “revitalizing small-town America once plagued with a shrinking tax base and dim prospects for economic growth,” the Wall Street Journal reports.
Here’s another problem with the report. The research lists public education as the most costly part of government spending on immigrant families—$13,000 of the annual $24,000 the authors say taxpayers spend on a family. That’s an absurd thing to be upset about. Education for all Americans is expensive, but it’s an investment in our collective future. Moreover, the majority of the kids in question were born here in the United States. They’re not immigrants at all, according to our Constitution.
If you want to read a filing cabinet full of studies on the positive economic impact of immigration reform, check out this Immigration Policy Center fact sheet.
But facts aren’t the point of the Heritage study. The point is to provide an escape hatch for Republicans who oppose the broadly popular legislation. Yesterday, Sen. Jeff Sessions, R-Ala., told the NY Times he hoped to hold the bill up in committee long enough for it to die. “The longer this legislation is available for public review, the worse it’s going to be perceived,” he said Monday. “The longer it lays out there, the worse it’s going to smell.” As Senators propose amendments this week, don’t be surprised to see lawmakers, including those who oppose reform outright, citing the Heritage Foundation in an effort to stench up the room.