Immigration bill: Drain or windfall? - Foes, supporters argue bottom line for U.S. taxpayers

Immigration bill: Drain or windfall? - Foes, supporters argue bottom line for U.S. taxpayers
By Karoun Demirjian
Copyright © 2007, Chicago Tribune
Published June 4, 2007

WASHINGTON -- Bitter political, legal and even semantic squabbles have dominated the fight over immigration since the Senate took up a bipartisan reform bill last month.

But outside the daily bickering, advocates for and against the bill are trying to argue their case based on what is often the deciding argument in Washington: What's the bottom line?

There is as much variance on that question as any other in the divisive immigration arena. Some warn that the programs in the Senate bill would cost U.S. taxpayers tens of billions of dollars in resources used by immigrants, while others say accommodating immigrants would be an enormous financial plus, as the newcomers' productivity and taxes significantly boost the economy and expand the coffers of the U.S. treasury.

It might seem that determining the cost of the immigration program would be a simple matter of crunching numbers. And indeed, the Congressional Budget Office made its first attempt to put a price tag on the proposed legislation as debates in the Senate wound down before Memorial Day, estimating that implementing the bill's proposals would cost the government up to $38 billion in direct spending but that it would be more than offset by $75 billion in extra tax revenue.

Because the overall scope of the immigration bill is not yet known as the Senate debate resumes Monday, many of the financial estimates are speculative. Yet even with the authoritative stamp of a government estimate, the debate has not quieted and criticism of the estimates has been vocal.

Robert Rector, a senior research fellow at the Heritage Foundation, a conservative think tank, recently completed a study in which he estimated that low-skilled immigrants are an $89.1 billion annual drain on the economy -- a sum he said would become more pronounced if current undocumented immigrants are given visas, as proposed.

"A legal immigrant is, ironically, more expensive than an illegal one," Rector said. "Illegal immigrants don't pay income tax, but they don't get as much in benefits and have less eligibility for welfare programs."

That is a hard cost-benefit analysis, the premise of which angers many, including President Bush.

As he addressed the immigration issue again Friday to build support for the Senate bill, Bush argued that the assets immigrants bring the country are not just financial.

"This country must never lose sight that what has made us unique -- and, in my judgment, great -- is that we welcome people like that in a legal way, that throughout our history there have been the stories of people who have enriched our soul and lifted our spirit by coming to America," he said.

But several critics said the Heritage Foundation estimate is just wrong.

"There is a kind of anti-immigration fever running through certain conservative circles," said Daniel Griswold, director of the Center for Trade Policy Studies at the Cato Institute, a libertarian think tank. "There's no doubt that low-skilled immigrants, like low-skilled Americans, cost the government more than they pay in taxes ... but it's more than offset by the economic benefits."

There might be reduced security costs, he said, once border patrol agents can stop chasing after would-be dishwashers and construction workers trying to enter the country illegally, or extra tax revenue for the government once immigrant children are educated and start earning a living.

The Senate bill's supporters contend that a balance sheet of government services presents an incomplete picture of immigrants' contributions to the economy.

"I don't know anybody who thinks that a complete picture of their contribution to the economy can be drawn from simply asking how much they pay in taxes," said Ben Johnson, executive director of the American Immigration Law Foundation, which favors the Senate bill. "If you take that view, then all busboys, all farmworkers, regardless of where they come from, are a net drain on our economy. And that's just not true."

But critics say that because the immigration proposal inevitably will increase the financial burden on government through Social Security and earned income tax credit claims, health-care demands and education costs for several million immigrants, it makes sense to exclude those with lower earning potential.

"An unskilled illegal immigrant is a problem," said Steve Camarota, director of research for the Center for Immigration Studies, which opposes the Senate bill. "But an unskilled legal immigrant is a disaster. It's not because he's lazy. It's not because he doesn't work. But earned income tax credits, additional child credit, free school lunch and Medicaid ... those things only go to legal workers."

On average, low-skilled illegal immigrant workers claim fewer tax credits and use fewer social welfare services than their legal counterparts. But critics of the legislation predict that legalizing undocumented immigrants will lead to a rush on public services that will outweigh any increase in tax revenue from the newly legalized workers.

"If we had 12 million additional high school dropouts born in the U.S., people would say, 'Wow, that sounds like a significant problem,' but somehow when we're bringing in people with a 3rd- and 4th-grade education from abroad, we look on this as somehow an economic miracle that's going to benefit us all," said the Heritage Foundation's Rector. "The post-tax, personal income of the American citizen goes down as a result of the presence of low-skilled immigrants."

Those who anticipate burdensome trends to accompany the implementation of any new immigration legislation say they actually are looking out for the low-skilled American worker, whose wages they say will be driven down with an influx of immigrants, legal or not.

But Johnson said there is a big difference.

"It is true that the group of people that may be adversely impacted by immigration are native-born [U.S.] high school dropouts," he said. "They can't compete with a black market [labor force]. They can, however, compete very well on an even playing field. Everybody's working conditions will improve if you get rid of the black market."

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kdemirjian@tribune.com