When Senate Majority Leader Harry Reid (D – Nevada) pulled the immigration bill last week, the blame game started immediately. Conservatives blamed Liberals. Liberals blamed Conservatives. But nobody pointed the finger where it rightly belonged: at the American people.
While most surveys indicate that Americans aren’t opposed to an immigration bill that offers some form of amnesty to qualifying immigrants (though who qualifies has hardly been a consensus vote), most Americans are opposed to the cost of an immigration bill. In a recent poll, 70% of Americans agreed that illegal immigrants use more public services than they pay for in taxes. In a year in which government spending is increasing and the projected revenues are not, that means that Americans are loathe to embrace legislation that hits where it hurts the most: their own pockets.
And what a hit this bill would be. The Congressional Budget Office estimated that the bill as introduced would have cost the government as much as $126 billion over the next decade.
Where would the dollars go? Law enforcement measures including hiring additional workers and building the controversial fence along the US-Mexico barrier alone would cost $3.3 billion. In fact, more than half of the bill would fund law enforcement measures that will likely happen whether a comprehensive bill passes or not.
The remainder of the bill (nearly $50 billion) would be paid out to newly legalized immigrants in federal benefits. Over the next decade, it is estimated that legalized workers, guest workers, and their families would claim $24.5 billion in tax refunds through the earned income credit and child credit, $15.4 billion in Medicare and Medicaid, $5.2 billion in Social Security benefits and $3.7 billion in food stamps and child nutrition programs. All billion with a b.
While it is estimated that there are between 11 and 15 million illegal immigrants currently in the United States, it’s difficult to gauge their cost because much of the financial details are undocumented. Many employers are paying illegal immigrants “under the table” and that income escapes taxation not only on the immigrant level but also on the employer level. As much as it is popular to blame immigrants, large scale companies like Wal-Mart fail to verify employment again and again – even after they were fined for federal employment violations – ostensibly because of economics. As long as Americans want to buy 10 tube socks for $1, companies like Wal-Mart will continue their hiring, sub-contracting and importing practices.
Despite the subversive nature of employing illegal immigrants, the conservative think tank, The Heritage Foundation, has made an attempt to quantify the cost. They estimate that for every dollar that an illegal immigrant receives, the US spends three dollars in services. This amount is, of course, disputed by those who again cite the undocumented nature of the income and claim that illegal immigrant taxpayers are on the rise. A story cited by the Tax Foundation indicates that undocumented workers are increasingly filing taxes, claiming that last year, 1.4 million people filed tax returns using ITINs (Individual Tax Identification Number) – a 40% increase.
This buffers the claim by proponents of the immigration bill who argue that, in the long run, tax revenue generated by new workers would offset virtually all the additional upfront spending. They advocate that it is likely that many of the immigrants who are legalized will become taxpayers and not tax consumers, just as many of those before them have done. In fact, Forbes reported encouraging news about second-generation immigrant families. The difficulty is finding the data to support those claims on a wide scale – not because success stories don’t exist but because they are rarely documented.
Senator Ted Kennedy (D – Massachusetts) has said that if immigrants “work hard and play by the rules and work in very tough and menial jobs, they may have an opportunity to be a part of the American dream.” After all, America was founded on that very basis. But when it affects current American fiscal policy, we’re a little less likely to embrace that idea.
I want to know what you think: are American tax dollars a good investment in our future in a bill such as this? It is, after all, your money.