Illegal Alien Amnesty and the Economy - Myths, Lies & Obfuscation

By: Jack Martin

Director of Special Projects

Recognizing that today's economic conditions and climbing unemployment are a deterrent to any consideration of immigration amnesty legislation, amnesty advocates are trying to persuade the public and Members of Congress that an amnesty for illegal aliens would help the economy. For example, the Immigration Policy Center (IPC) recently issued a report that argues that, "Without  comprehensive reform of the immigration system [read amnesty for illegal aliens], our nation cannot experience a full economic recovery."1 If bold, baseless assertions such as these would win the immigration debate, the debate would be over. This argument spins a fantasyland out of partial and misleading data. Here is how they do it.

The first assertion of the IPC polemic describes a revenue panacea for the government if an amnesty is enacted. "The 2007 immigration reform bill, which included a legalization program, would have more than paid for itself through increased tax revenue. The CBO and JCT estimated that the Comprehensive Immigration Reform Act of 2007, as amended by the Senate through May 24, 2007, would have generated $48 billion in new revenue during 2008-2017, primarily through Social Security payroll taxes.

• The additional revenue would have more than offset the estimated $23 billion in new "direct spending" on refundable income tax credits and Medicaid during 2008-2017. 
• The extra revenue would have partially offset the $43 billion in new "discretionary spending" on immigration enforcement during 2008-2017."

Read that again. The estimate is that a "legalization" program would cost $23 billion in direct spending and $43 billion in discretionary spending for a total cost of $66 billion and would [only] generate $48 billion in new revenue. So the difference - a deficit of $18 billion - "would have more than paid for itself." Moral: stating that down is up does not make it so.

An analysis by the Center for Budget and Policy Priorities of the same CBO projection noted: "The legislation would increase the unified federal budget deficit by only 'several billion dollars a year' by 2027..."

Although that estimate may understate the net fiscal cost, at least it recognized that it would be a revenue loser, not a bonus for the federal government. Aside from the wishful thinking about the impact on the federal budget, the IPC ignores the much greater fiscal impact that amnesty would have at the state and local level. The Federation for American Immigration Reform (FAIR) explained this impact with regard to the earlier CBO estimate of the impact of the 2006 Senate amnesty bill: "An estimate of the fiscal impact at the local level by FAIR identifies a cost of $70 billion per year by 2020, primarily for education and health care. The $70 billion annual price tag does not include a number of other likely cost increases for programs such as assisted housing and other social welfare programs."

In addition, because the formal CBO estimate is for the ten-year period after adoption of the legislation, the estimate focuses on the early effects when the newly legalized aliens currently are precluded by law from using federal welfare programs.Therefore, it does not include the delayed impact. The CBO acknowledged this issue in its report. "This [the increase in the budget deficit] would happen because, the net cost of the legislation would grow after 2017, as more of the affected immigrants became eligible for benefits and the per capita cost of benefits rose..."

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If you enjoyed this article, read the full report at:

Amnesty and the Economy: Myths, Lies, and Obfuscation

by the Federation for American Immigration Reform

www.FAIRUS.org

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