Right-wing media outlets hyped widely discredited research from the Heritage Foundation to push the myth that President Obama's executive actions on immigration will cost the U.S. economy more than $2 trillion in federal benefits paid to those undocumented immigrants whose deportations are deferred. But Obama's exercise of prosecutorial discretion on behalf of certain undocumented parents of U.S. Citizens and lawful permanent residents does not confer federal means-tested benefits and economists report that allowing more immigrants to legally work will raise revenues and boost the economy.
Obama Announces Executive Action On Immigration
Obama's Executive Action On Immigration Will Protect Some From Deportation And Give Them Access To Work Permits. In a November 20 speech, Obama announced a plan to temporarily offer deportation relief to as many as 5 million undocumented immigrants and allow some to gain legal employment:
OBAMA: First, we'll build on our progress at the border with additional resources for our law enforcement personnel so that they can stem the flow of illegal crossings, and speed the return of those who do cross over.
Second, I'll make it easier and faster for high-skilled immigrants, graduates, and entrepreneurs to stay and contribute to our economy, as so many business leaders have proposed.
Third, we'll take steps to deal responsibly with the millions of undocumented immigrants who already live in our country.
So we're going to offer the following deal: If you've been in America for more than five years; if you have children who are American citizens or legal residents; if you register, pass a criminal background check, and you're willing to pay your fair share of taxes -- you'll be able to apply to stay in this country temporarily without fear of deportation. You can come out of the shadows and get right with the law. That's what this deal is. [WhiteHouse.gov, 11/20/14]
Conservative Media Promote Heritage Foundation Claim That Executive Action Will Cost $2 Trillion In Benefits
The Daily Caller: “Obama's Amnesty For Four Million Illegal Immigrants Will Cost Americans About $2 Trillion, Or Roughly $40 Billion A Year.” During a November 23 interview with Heritage Foundation's Robert Rector, The Daily Caller cited Rector's research that purported that Obama's immigration action will cost American taxpayers $2 trillion in government support for low-income residents. From the Daily Caller:
President Barack Obama's amnesty for four million illegal immigrants will cost Americans about $2 trillion, or roughly $40 billion a year for the next five decades.
The $2 trillion cost is driven by the federal government's support for all poor people, says Robert Rector, a budget analyst at the Heritage Foundation. Rector explained that, on average, the illegal immigrants benefiting from the amnesty have a 10th grade education.
That low education ensures they can't earn enough money, or pay enough taxes, to pay for the many benefits they'll get if they progress from temporary residents to legal residents and then to citizens, Rector said. [The Daily Caller, 11/23/14]
Mark Levin: “Sucker” Taxpayers Will Cover Cost Of Benefits For Immigrants. On the November 24 edition of his show, Conservative radio host Mark Levin claimed that the immigrants who will gain deportation relief from the executive action are too poorly educated to support themselves and will rely on taxpayer-funded benefits to make ends meet. He added:
LEVIN: Rector explained that on average, illegal aliens benefitting from the amnesty have a tenth grade education. And that low education ensures they can't earn enough money or pay enough taxes to pay for the many benefits they'll get if they progress from temporary residents to legal residents and, of course, eventually, citizens. So, he says they pay in about $13,000 dollars per year -- get about $50,000, each household, in benefits. So, who makes up that $30,000? You do, sucker! You make it up. That's the whole point. And that's the whole damn problem. [Premiere Radio Networks, The Mark Levin Show, 11/24/14]
Breitbart: “Robert Rector: Amnestied Illegal Immigrants To Cost Taxpayers $2 Trillion.” Breitbart echoed Rector's research to argue that immigrants were “granted amnesty” by Obama's actions, which “will likely cost taxpayers $2 trillion”:
The undocumented immigrants granted amnesty by President Barack Obama's executive orders will likely cost taxpayers $2 trillion, according to Heritage Foundation poverty expert Robert Rector.
“The net cost -- which is total benefits minus total benefits paid in -- of the amnesty recipients I estimate will be around $2 trillion over the course of their lifetime,” Rector explained in an interview with Breitbart News Monday. He added that the calculation is based on the assumption that 4 million undocumented immigrants will participate and they will live, on average, 50 years.
According to Rector -- who has published extensively on welfare, poverty, and immigration -- the cost has two components: The first is the potential to access Social Security and Medicare, given amnestied undocumented immigrants' ability to obtain work permits and Social Security Numbers. [Breitbart, 11/24/14]
Fox Host Bill Hemmer: Price Of Immigration Plan Is "$2 Trillion." On the November 24 edition of Fox's America's Newsroom, co-host Bill Hemmer reported that, according to the Heritage Foundation, the president's immigration actions will cost "$2 trillion dollars." Appearing as a guest, Fox Business host Stuart Varney explained that Heritage found that the “cost of giving amnesty to 4 million people is $40 billion a year.” [Fox News, America's Newsroom, 11/25/14]
The $2 Trillion Claim Comes From Heritage's 2013 Immigration Study...
"Rector Draws His Estimate From A May 2013 Analysis He Completed For Heritage." The Daily Caller explained that its numbers were drawn from the Heritage Foundation's May 2013 immigration study. [The Daily Caller, 11/23/14]
... Which Has Been Widely Recognized As “Not Credible”
Conservative Economist Stephen Moore: “Almost All Economists Disagree” With Heritage's Claim That Immigrants Harm Economy. On Fox's America's Newsroom, former Wall Street Journal editorial board member and Fox News contributor Stephen Moore, who now serves as Heritage's chief economist, said the study “leaves the impression” that “immigrants are a cost to the economy. That is one thing almost all economists disagree with, that we are very much benefitted by being a nation of immigrants.” [Fox News, America's Newsroom, 5/6/13; Talking Points Memo, 1/23/14]
Wash. Post's Dylan Matthews: “The Heritage Numbers Simply Are Not Credible.” According to The Washington Post's Dylan Matthews, Heritage's estimate leaves out several important factors in determining the cost of immigration reform:
[The Heritage Foundation's Robert] Rector and [Jason] Richwine are certainly correct that making currently ineligible immigrants eligible for means-tested benefits and retirement entitlements has a real budgetary cost. But in the long run, we know that immigration is a net economic boon, and in particular for immigrants, which reduces their fiscal cost and increases our ability to pay for what benefits they do receive. And the best study we have on the fiscal effects of immigration reform, from the CBO, finds the impact to be minimal or positive.
Pay attention to that study. Pay attention to whatever score the CBO puts out of the Gang of 8 bill. But the Heritage numbers simply are not credible. [The Washington Post, 5/6/13]
Cato Institute's Alex Nowrasteh: Heritage Report Leads To “A Massive Underestimation Of The Economic Benefits Of Immigration And Diminishing Estimated Tax Revenue.” According to the Cato Institute's Alex Nowrasteh, the Heritage Foundation's 2013 study underestimates the positive impact of immigration reform on the economy and doesn't even score the specific immigration proposal in the Senate:
The new Heritage report is still depressingly static, leading to a massive underestimation of the economic benefits of immigration and diminishing estimated tax revenue. It explicitly refuses to consider the GDP growth and economic productivity gains from immigration reform--factors that increase native-born American incomes. An overlooked flaw is that the study doesn't even score the specific immigration reform proposal in the Senate. Its flawed methodology and lack of relevancy to the current immigration reform proposal relegate this study to irrelevancy. [Cato Institute, 5/7/13]
AEI's James Pethokoukis: Heritage Study “Fails To Capture Indirect But Important Economic Impacts Of Immigration.” According to a blog post by American Enterprise Institute (AEI) columnist James Pethokoukis, the Heritage study fails to take into account the economic benefits of immigration:
The study, however, fails to capture indirect but important economic impacts of immigration such as increasing economic activity or positively affecting American employment. Both of those would lead to higher tax revenues and reduced transfer payments. Surely every effort should be given to factoring in such dynamic impacts of immigration reform. The Heritage study says, for instance, that “taxes and benefits must be viewed holistically.” So, too, immigration overall. Big policy changes don't exist in a vacuum, isolated from the rest of the economy.
Not making these added calculations raises red flags as to the study's completeness. What about studies of US states that find economic contributions of low-skill immigrants “dwarf their fiscal costs.” Another example: Heritage claims “that unlawful immigration appears to depress the wages of low-skill US-born and lawful immigrant workers by 10 percent, or $2,300, per year.” Yet other highly regarded research finds wage gains at all education levels for US-born workers.
Is immigration reform that potentially expands the population of less-skilled individuals a smart economic policy or not? It's impossible to draw a reasonable conclusion based only on the Heritage study. [American Enterprise Institute, 5/6/13]
Heritage's Flawed Study Assumes That Obama's Plan Will Make Undocumented Immigrants Eligible For Disability Benefits, Food Stamps, Welfare
Heritage's Rector Bases His Claim On Assumption That Immigrants Will Receive Benefits From Social Security, Food Stamps, Medicare, And More. The Daily Caller notes that Rector derives his $2 trillion estimate by assuming full “amnesty,” which would affect three times as many people, would cost $6.3 trillion, roughly three times more. His original assessment assumed that the immigrants would receive benefits from a wide range of government programs, including: Social Security, Medicare, Medicaid, Supplemental Insurance for Needy Families, unemployment insurance, Earned Income Tax Credit (also known as food stamps), Temporary Assistance for Needy Families (commonly called Welfare), Supplemental Security Income (disability insurance). [The Daily Caller, 11/23/14; The Heritage Foundation, 5/6/13]
But Obama's Action Does Not Give Undocumented Immigrants Access To Disability Benefits, Food Stamps, Welfare
Associated Press: Under Obama's Plan, Undocumented Immigrants “Are Not Eligible For Food Stamps, Federal Welfare Benefits Or Disability Benefits. The Associated Press reported that ”Officials said the eligible immigrants would not be entitled to federal benefits -- including [Affordable Care Act] health care tax credits -- under Obama's plan." Immigrants whose deportations are deferred also remain ineligible for “food stamps, federal welfare benefits or disability benefits” :
The beneficiaries of Obama's new executive action would be treated in the same manner as those immigrants who were shielded from deportation in his 2012 directive, according to one official who discussed the limits of Obama's action on the condition of anonymity, lacking authority to speak on the record at this point.
Those young immigrants covered by the 2012 action can obtain work permits but are not eligible for food stamps, federal welfare benefits or disability benefits under the Supplemental Security Income program. They also are ineligible for tax credits under Obama's health care law, though they can buy health coverage at full price on the exchanges created by the law. They may be eligible for public benefits provided by some states. [Associated Press, 11/19/14]
NBC News: Deferred Action Immigrants “Won't Be Able To Enjoy Many State And Federal Benefits.” NBC reported that “recipients will be able to live in the U.S. lawfully but will not have legal status.” This means that they will be allowed to “live, work and attend school without the fear of being deported but won't be able to enjoy many state and federal benefits.” [NBC News, 11/21/14]
Huffington Post: “Millions of Immigrants Are Asked To Pay Taxes, But Won't Receive Federal Benefits.” The Huffington Post reported that Obama's immigration order will grant millions of undocumented immigrants temporary administrative relief and ask them to pay taxes, but will still be ineligible for federal benefits:
On Thursday, President Barack Obama granted millions of undocumented immigrants who are parents of U.S. citizens or permanent residents and have lived in the U.S. for at least five years the right to work and pay taxes. They don't, however, have the right to receive federal benefits, including subsidies under the Affordable Care Act, Medicaid coverage and food stamps. [The Huffington Post, 11/21/14]
In Fact, The Decision Is Likely To Help The Economy And Increase Federal Tax Revenue...
Politico: Undocumented Immigrants' Tax Contributions Will “More Than Make Up For” Federal Tax Credits They Receive. Politico explained that while some of the immigrants affected will likely qualify for tax credits that benefit the working poor, their overall tax contributions will “more than make up for the credits the government pays to them.” Politico also cited economics professor Madeline Zavodny, who said that immigrants' wages typically rise when they are able to work legally, which she, explained “would also mean more taxes.” [Politico, 11/20/14]
Center For American Progress: Tax Revenue Would Increase If Immigrants Who Have Been In The U.S. For More Than 5 Years Worked Legally. A report from the Center for American Progress (CAP) found that letting undocumented immigrants work legally would increase tax revenue by $6.1 billion in payroll taxes in the next year and would contribute a total of $45 billion over five years. From CAP (emphasis original):
- Expanding the Deferred Action program would immediately yield billions of dollars in tax revenues, while increasing wages and job security for all Americans. Allowing low-priority unauthorized immigrants who have been in the country for five years to apply for deferred action -- a temporary work permit and deferral of deportation -- would mean that they could earn higher average wages and protection from exploitation. This would have a significant impact on the U.S. economy, yielding $6.1 billion in payroll tax revenue in the first year and increasing gains of up to $45 billion over the next five years. [Center for American Progress, 10/23/14]
Center For American Progress: Failing To Offer Protections “Is Not Revenue Neutral.” CAP also found that decreasing deportations would carry economic benefits and lower government spending (emphasis original):
- Maintaining the status quo is not revenue neutral. With only one-third of unauthorized immigrants working in the formal economy and contributing about $12 billion in payroll taxes each year, the United States loses around $20 billion in payroll tax revenue annually. This lost revenue would go a long way toward funding the retirement of Americans across the country.
- The United States spends more on immigration and border enforcement annually than the annual gross domestic product of 80 countries. In fact, the United States now spends $3.5 billion more on immigration and border enforcement -- a total of nearly $18 billion per year -- than it does on all other federal law enforcement combined.
- A self-deportation regime would cost our economy trillions of dollars. If all undocumented immigrants in the country were deported or “self-deported” -- meaning they choose to leave the country because life is too difficult -- the United States' cumulative GDP would suffer a hit of $2.6 trillion over 10 years.
- Mass deportation of the undocumented immigrant population would cost billions of dollars. Deporting the entire undocumented population would cost $285 billion over a five-year period, including continued border and interior enforcement efforts. For that price, we could hire more than 1 million new public high school teachers and pay their salaries for five years.
- It costs taxpayers more than $20,000 to carry out the deportation of a single individual. Apprehending, detaining, processing, and transporting one individual in the deportation process cost $23,482 in fiscal year 2008. [Center for American Progress, 10/23/14]