May 24, 2013
The very idea that anyone in the current administration would assume he or she automatically has the public’s trust simply because they hold a government office is ludicrous, to say the least. Nevertheless, the Gang of Eight say their immigration reform bill won’t add a single penny to the U.S. deficit and they expect you to believe it because, well, because they said so, that’s why.
In the wake of The Heritage Foundation’s May 6 report that the immigration reform bill, as it stands now, will create a deficit of $6.3 trillion, the Gang of Eight offered a substitute amendment that would increase the implementation funding by an additional $900 million, increasing the Trust Fund to $7.5 billion.
“Our watchword here is to have this bill pay for itself. In other words, we do not want it to incur any costs to the taxpayer, the Treasury or anybody else. That will be a balance. It will be the costs of administering the E-Verify program and the exit-entry visa program, the costs of strengthening the border and the costs of just administering the new immigrants who will be coming here,” Sen. Charles Schumer (D-N.Y.), the lead sponsor of the legislation, told colleagues during the Judiciary Committee’s markup.
There are only two problems with Schumer’s statement that the bill will pay for itself, the first being the Trust Fund itself. The bulk of the now $7.5 billion to fund the Trust Fund will be transferred from the U.S. Treasury Department General Fund, and 67 percent of the money in the General Fund comes from taxes – paid by legal U.S. citizens.
Since the U.S. is already some $17 trillion in debt and the clock doesn’t appear to be slowing down, it’s possible that Schumer considers another $7.5 billion expenditure just a drop in the bucket, therefore not really worth mentioning, but the average American knows if we already owe $17 trillion bucks, at best we’re merely robbing Peter to pay Paul, and that’s putting it mildly. In short, any way you look at it, we’re adding to the deficit and legal American citizens will have to pay for it.
But the second problem is even more alarming, and that’s the Heritage Foundation’s report, compiled by Robert Rector and Jason Richwine, Ph.D., titled, “The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer.” According to this report:
“If amnesty were enacted tomorrow, current unlawful immigrants (along with their minor children and dependent parents) would subsequently receive around $9.4 trillion in government benefits over the span of a lifetime. The lifetime taxes paid by the amnesty recipients would come to $3.1 trillion. The total fiscal deficit (total benefits received minus taxes paid) would equal $6.3 trillion. (All figures are in constant 2010 dollars.)”
Now, why should we believe the Heritage Foundation’s outrageous claims over The Gang of Eight’s? Because Robert Rector and Jason Richwine actually back it up with statistics and analysis, they’re not just assuming you’re going to trust them. So let’s break it down…
The Heritage Foundation report first defines the various government services available to U.S. citizens:
Direct benefits: These include Social Security, Medicare, unemployment insurance, and workers’ compensation.
Means-tested welfare benefits: There are over 80 of these programs which, at a cost of nearly $900 billion per year, provide cash, food, housing, medical, and other services to roughly 100 million low-income Americans. Major programs include Medicaid, food stamps, the refundable Earned Income Tax Credit, public housing, Supplemental Security Income, and Temporary Assistance for Needy Families.
Public education: At a cost of $12,300 per pupil per year, these services are largely free or heavily subsidized for low-income parents.
Population-based services: Police, fire, highways, parks, and similar services, as the National Academy of Sciences determined in its study of the fiscal costs of immigration, generally have to expand as new immigrants enter a community; someone has to bear the cost of that expansion.
According to the Heritage report, “The cost of these governmental services is far larger than many people imagine. For example, in 2010, the average U.S. household received $31,584 in government benefits and services in these four categories.”
Rector and Richwine explain that the governmental system is highly distributive, thus, well-educated households tend to be net tax contributors:
“For example, in 2010, in the whole U.S. population, households with college-educated heads, on average, received $24,839 in government benefits while paying $54,089 in taxes. The average college-educated household thus generated a fiscal surplus of $29,250 that government used to finance benefits for other households.”
On the flip side, households with less education tend to be net tax consumers:
“The benefits they receive exceed the taxes they pay. These households generate a “fiscal deficit” that must be financed by taxes from other households or by government borrowing. For example, in 2010, in the U.S. population as a whole, households headed by persons without a high school degree, on average, received $46,582 in government benefits while paying only $11,469 in taxes. This generated an average fiscal deficit (benefits received minus taxes paid) of $35,113.”
Rector and Richwine believe that the high deficits of poorly educated households are significant in the amnesty debate because the typical illegal immigrant has only a 10th-grade education. Fifty-percent of illegal immigrant households are headed by someone with less than a high school education, and only 25 percent are lead by someone with a high school diploma.
Currently, illegal immigrants don’t have access to means-tested welfare, Social Security, or Medicare, but this doesn’t mean they’re not costing tax payers money. Children in these households receive a heavily subsidized public education. Many have U.S.-born children who are already eligible for the full range of government services. And illegal aliens living in communities use the roads, the schools, and the fire and police services.
In 2010, then, the average illegal household received around $24,721 in government benefits and services while paying only $10,334 in taxes, generating a deficit of approximately $14,387 per household – which is covered by legal, tax-paying U.S. citizens. Amnesty would give these illegal households access to the full range of public services, including Obamacare, Social Security, and Medicare. “The fiscal deficit for each household would soar.”
Now, the Gang of Eight would have us believe that once these illegals get on the Pathway to Citizenship they’re going to be able to get better jobs and pay more taxes and perform miracles for the American economy. But we’ve already discussed their lack of education. They may very well be able to get a better rate of pay simply because of their legal status. But the current 11.5 million illegal immigrants are now, and always will be, net tax consumers, as will most of their children.
Currently, all illegal households combined create an annual deficit of approximately $54.5 billion. During the 13-year interim phase before they’re granted amnesty, that deficit will likely take a small drop to around $43.4 billion as they get better paying jobs.
But it’s the end of that 13-year waiting period where things take a drastic turn for the worse. At the end of the interim phase, “former unlawful immigrant households would become fully eligible for means-tested welfare and health care benefits under the Affordable Care Act. The aggregate annual deficit would soar to around $106 billion.”
Now, let’s do the real math. If the typical illegal alien is 34 years old, after the 13-year waiting period he’ll be eligible for the full range of government services for approximately 50 years. The average adult illegal immigrant would receive $592,000 more in government benefits over the course of his remaining lifetime than he would pay in taxes.
“Over a lifetime, the former unlawful immigrants together would receive $9.4 trillion in government benefits and services and pay $3.1 trillion in taxes. They would generate a lifetime fiscal deficit (total benefits minus total taxes) of $6.3 trillion. (All figures are in constant 2010 dollars.) This should be considered a minimum estimate. It probably understates real future costs because it undercounts the number of unlawful immigrants and dependents who will actually receive amnesty and underestimates significantly the future growth in welfare and medical benefits.”
Now, who are you going to believe? Will you believe the Gang of Eight’s claim that the amnesty bill will pay for itself because, well, because that’s their story and they’re sticking to it? Or will you believe Rober Rector and Jason Richwine, Ph.D. of the Heritage Foundation when they say the bill will create an additional $6.3 trillion in deficit spending because they back it up with statistics and analysis?
This article was posted: Friday, May 24, 2013 at 9:50 am
Tags: domestic news