Today the White House released a report called “The Economic Benefits of Fixing Our Broken Immigration System,” detailing purported economic growth from immigration reform and drawing significantly on the Congressional Budget Office report on the Senate comprehensive immigration bill (S. 744). The White House’s report fails in several areas.
Measures of Economic Well-Being
First, the report repeats self-evident truths about the economy and fails to grapple with the most relevant measure of well-being. An increase in population that would result from massively increasing immigration and forgiving those who broke our laws would by definition increase gross domestic product (GDP), but a bigger economy does not by itself make anyone better off.
The proper economic goal should be increased after-tax income for those who are in the United States legally. This bill appears to fail that test in the years following enactment, since even the Congressional Budget Office (CBO) shows that the Senate bill would lower per-capita gross national product (GNP) all the way out past 2030 (Figure 2). The CBO notes that by 2033, per capita GNP could be lower or higher. When the heavy fiscal costs, most comprehensively calculated by Heritage, are taken into account, those currently present legally will almost certainly be worse off.
The White House report also largely ignores the amnesty provisions of S. 744 and certainly does not provide separate economic analysis of such an amnesty. (Any GDP increase from an amnesty would be nearly entirely consumed by the illegal immigrants themselves.)
Such an amnesty is unfair to those who respect U.S. laws, and it is costly to federal, state, and local taxpayers to the tune of trillions of dollars over the lifetime of the illegal immigrants.
Heritage has long maintained that proper reforms to our immigration system, particularly those that emphasize high-skill immigration, could lead to economic growth that is fiscally responsible, because those with a college degree pay significantly more in taxes than they receive in benefits and services. Under the Gang of Eight’s bill, only 15 percent of new immigrants would be skill-based. The CBO also predicts that as a group, new immigrants would have below-average skill and education levels.
So if we can get the bulk of economic growth from reforming our legal immigration system, why wouldn’t we do that instead of insisting on an unfair, unworkable, and costly amnesty?
Does Not Fix the System
The report, though titled “Fixing Our Broken Immigration System,” fails to contend with the CBO’s plain measure of the bill’s ineffectiveness. The CBO predicts that the bill would reduce illegal immigration by one-third to one-half. That means millions more illegal immigrants would enter or stay in the U.S. illegally, and we will face the same problem we face now in just a few years.
In addition, the CBO predicts that millions of currently illegal immigrants will remain in the shadows and not apply for amnesty; neither S. 744 nor the current Administration has explained what they will do with respect to these millions of illegal immigrants.