Robert Rector’s Study: Open Borders + Welfare State = Disaster

Monday, May 6th, 2013 and is filed under Blog, Immigration, News

We’ve noted many times throughout the debate over amnesty that you simply cannot legalize so many low-skilled people without reforming the welfare state.  Some people don’t like to hear it, but the reality of today’s redistributive society is that the higher-skilled population transfers a tremendous amount of wealth to the lower-skilled population in the form of the tax code, entitlements, welfare, and social services.  Do we really need to import so many new low-skilled illegal and legal immigrants over the next decade to exacerbate the current unsustainable dynamic?

That is the question Heritage’s Robert Rector deals with in his cost study on amnesty today, at least in the case of illegal immigrants.  And the answer is a resounding no.  Under any amnesty plan, there would indeed be more people paying payroll taxes, but that revenue will never outweigh the cost of benefits they would inevitably receive.

According to Rector, “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.”  That’s a net cost of $6.3 trillion in combined federal, state, and local benefits.   The annual net cost will be roughly $112 billion.  The majority of expense will be the result of increased educational and welfare costs.

Additionally, there are a number of likely factors that could result in higher costs:

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Chain Migration Will Bury the Republic and Republican Party

Friday, April 26th, 2013 and is filed under Blog, Immigration

Throughout the past week, we’ve focused on many of the individual details in the Schumer/Rubio bill.  However, it’s important to step back and look at the bill in totality.  Between all of the amnesties, guest worker programs, and massive expansions in legal immigration, this bill will set off a seismic chain migration.  The effects on the welfare system and our ability to absorb so many immigrants will be felt within 5-10 years.  Yesterday, Senator Sessions broke down the comprehensive effects of the bill on chain migration as follows:

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Rubio: Then and Now

Tuesday, April 23rd, 2013 and is filed under Blog, Immigration, News

As far as amnesty, that’s where [Charlie Crist] and I disagree. He would have voted for the McCain plan. I think that plan is wrong…if you grant amnesty…you will destroy any chance we will ever have of having a legal immigration system that works here in America. [Marco Rubio, Fox News Sunday debate with Charlie Crist, March 28, 2010]

It’s this sort of straight talk that endeared Rubio to the conservative base in 2010.  Rubio presciently noted that when you consistently grant amnesty and telegraph the message that you will never enforce the law, we will continue to repeat the cycle of illegal migration and amnesty.  At the 1:30 mark in this interview, Rubio offers one of the best lines of attack against amnesty I’ve heard.  His views were simply diametrically opposed to what he is espousing now.

The irony is that the McCain amnesty bill wasn’t nearly as offensive as the current iteration Rubio is supporting.  The past bill contained a cap on the age for Dream Act recipients and required education attainment.  This bill doesn’t.  Moreover, this bill invites in thousands of illegals who were already deported, many of them for criminal activities.

Consequently, the cost of this bill – both for amnestied illegals and low-skilled guest workers, along with their children – will likely be more expensive than the 2007 bill.  Yet Rubio’s office is coordinating a pre-emptive attack on the coming cost study from Heritage, demanding that they score the “benefits” of bringing in so many new workers.  Amazingly, it was actually Charlie Crist who advanced a similar argument in defense of McCain-Kennedy.  During a debate with Rubio, Crist said that by offering amnesty to 12 million illegals ,we would help solve the Social Security deficit because more people would be paying into the system.

Rubio laughed him off the stage: “There isn’t a single serious public policy observer in the country that thinks that’s a serious solution.”  Then, Rubio sent out a press release, which was posted on his website at the time, lambasting the idea that low-wage earners could possible solve Social Security.  In doing so, he cited….Robert Rector’s cost study – the very study he now maligns:

DEBATE FACT #5: Crist’s Amnesty For Social Security Plan Would Bankrupt The System Faster

by Marco Rubio (Notes) on Tuesday, October 26, 2010 at 6:42pm

What Crist Said…

That he would protect Social Security but his plan would actually make it go bankrupt faster.

The Facts About The Crist Record…

Charlie Crist Has Proposed Granting Amnesty For Illegal Immigrants To Save Social Security:

· In 2007, The CBO Predicted That Amnesty For Illegal Immigrants Would Increase Social Security Spending $350 Million Over Ten Years And Add 11,500 Disabled And Retired Workers To The Rolls Ten Years Out. “CBO estimates that the Z-A visa program would boost outlays for Social Security benefits by $350 million over the 2008-2017 period and add 11,500 disabled and retired workers to the rolls in 2017.” (Congressional Budget Office, “Senate Amendment 1150 To S. 1348, The Comprehensive Immigration Reform Act Of 2007,” 6/4/07)

· Amnesty Would Also Increase Medicare Spending $290 Million Over The Same Period According To The CBO. “Medicare would spend an extra $290 million over the 2008-2017 period and enroll an added 7,000 people in 2017.” (Congressional Budget Office, “Senate Amendment 1150 To S. 1348, The Comprehensive Immigration Reform Act Of 2007,” 6/4/07)

· PolitiFact: Crist Plan Would Actually Add Costs To The Social Security System. “In fact it turns out Social Security already is receiving a huge benefit from illegal workers who are paying into the system but as of now are unable to receive any of the benefits. Back in 2005, the New York Times reported that illegal workers essentially are contributing a $6 billion to $7 billion annual subsidy. More recent estimates suggest illegal workers are now paying $9 billion to $12 billion a year into Social Security, with no legal way to get that money back in retirement benefits. … Crist’s plan would potentially tap the other third of illegal workers not paying payroll taxes, but also would allow all workers access to Social Security benefits when they reach retirement age. Added benefits, yes. But added costs, too.” (Aaron Sharockman, “Charlie Crist Says Social Security Plan Embraced By Former Labor Secretary Robert Reich,” St. Petersburg Times’ “PolitiFact,” 10/18/10)

· National Review: Amnesty “Would Also Make All Of These Individuals Eligible For The Program Upon Retirement – Essentially Turning Today’s One-Way Cash Flow Into A Two-Way Street.” “Here’s the fallacy of Crist’s thinking, by the numbers: About 50 percent of illegal immigrants already pay Social Security taxes, because their wages are ‘on the books.’ The Social Security Administration estimates that illegals pay as much as $7 billion into the program on a yearly basis. Since they’re not eligible for the benefits, this is an inflow of money without any future corresponding outflow. If Social Security’s numbers are the only consideration, keeping illegal immigrants illegal has its advantages. Amnesty would bring the other half of current illegals into the fold of payroll taxes, and increase Social Security receipts in the short term. But it would also make all of these individuals eligible for the program upon retirement — essentially turning today’s one-way cash flow into a two-way street. ‘It is true that they will pay small amounts into the Social Security and Medicare systems for, say, the next two or three decades, but once they retire, they will draw down $2.7 trillion in benefits from Social Security and Medicare alone,’ Rector said. Rector calculated the figure during the 2007 consideration of amnesty, based on an estimate of 10 million adult illegal immigrants.” (Kyle O. Peterson, “Charlie Crist Says Amnesty Will Help Social Security. Really. Governor?” National Review, 9/27/10) [emphasis added]

· Crist’s Amnesty Plan “Will Put More Pressure On The System.” “When Crist has been pressed for his ideas of dealing with Social Security’s long-term problems, the governor suggested that finding a way for some of the country’s 14 million illegal immigrants to become citizens may create more workers who would provide additional payroll taxes to support Social Security. Critics have attacked his proposal by pointing out many illegal immigrants already work and pay payroll taxes but do not receive Social Security benefits. They said if those workers become legal, they will put more pressure on the system and also qualify for other federal aid, such as Medicare.” (Lloyd Dunkelberger, “Senate Candidates Talk About Changing Social Security,” Lakeland Ledger, 10/3/10)

Look, there’s nothing new about politicians “evolving” shortly after being elected to Congress, but how could someone evolve so profoundly in such short order?  Rubio rightly recognized the absurdity of suggesting that millions of low-skilled amnestied illegals can affect a net-positive change on taxes and entitlements.  While they might pay in a small amount of payroll taxes, they get back more from the progressive benefit formula of Social Security, as well as from the refundable tax credits and transfer programs they might secure on behalf of themselves, or at the very least, on behalf of their American-born children.

Charlie Crist was wrong in 2007 on McCain-Kennedy.  Robert Rector was right.  McCain-Kennedy on steroids will not change that equation.

Here are Some Dynamic Scoring Ideas for the Immigration Deform Bill

Friday, April 19th, 2013 and is filed under Blog, Immigration, Issues

The coalition of leftists, big labor, big business, and big GOP consultants who are pushing this immigration bill, which is antithetical to reform, are terrified of the upcoming cost study from the Heritage Foundation.  That’s why Marco Rubio is asking them to employ “dynamic scoring.”  In the minds of his supporters, we should focus on the alleged benefits from the bill with regards to the labor market, which presumably will occur immediately, as opposed to the costs which will occur after 10 years.

The first thing we need to understand is that the children of the amnesty beneficiaries will affect the welfare costs well within the 10-year budget frame.

At present, our legal system operates under the false notion that the 14th Amendment guarantees citizenship for any child born here from someone who entered illegally.  If someone runs over the border and drops a baby, that baby is a citizen.  If the individual comes in on a tourist visa and drops a baby, that baby is a citizen.  This has created the allure of anchor babies, and serves as a huge magnet for illegal immigration.

Although illegals are officially not entitled to collect welfare benefits (though they can get refundable tax credits or steal social security numbers), they can and do collect welfare on behalf of their American-born children.  What the Gang of 8 essentially does is turn millions more people into anchor babies.  Their iteration of the Dream Act (Sec. 2103, page 110) would grant full citizenship to anyone who came here before 16 after just 5 years, irrespective of the fulfillment of their ambiguous enforcement goals.  Unlike previous versions of the Dream Act, there is no maximum age limit of 30.  Hence, a whole lot of people will be eligible for the entire litany of programs in short order, and in the case of those who are still dependents, they will be able to secure benefits on behalf of their parents.

Additionally, as part of the ‘no illegal left behind’ provision of the bill, even those illegals who were deported but are otherwise eligible for the Dream Act (or regular RPI status along a different track), are invited back into the country to accept citizenship in 5 years along with their immediate family members.  There will be a number of aggressive lawyers chomping at the bit to litigate every last one into the legal status.  Add on the fact that states will now be precluded from barring them from instate tuition, it is stupefying how insouciant some Republicans are to the cost of the Dream Act.

With that in mind, think about the children of the hundreds of thousands of temporary guest workers, who will never be temporary because the visa tracking system is not required to be implemented for 10 years (not that it will be implemented then either).  The expressed purpose of the open-borders lobby, at least on the Republican side, is to bring in cheap labor.  Well, when you pay people who have American-born children slave wages, they will be able to collect all those benefits – immediately.

Yup, you can’t forget about the children.

With regards to the benefits to the labor market, that’s a tough thing to score based on the way the bill is written.  Again, to the extent that it’s a good thing to bring in so many new illegal and legal immigrants who will depress wages, this bill won’t allow us to reap those “benefits.”  It sets up a wage-setting agency to regulate the wages of those low-skilled guest workers who come in on the newly issued W visas.  They also have numerous restrictions on employers of H1-B high skilled workers, penalizing them for employing too many of them and setting wage restrictions.

To the extent that there are some real benefits, they are either in quirky ways or in areas that there is already broad consensus to reform.  There is broad consensus to eliminate the diversity visa lottery and move towards a merit-based system, which would greatly benefit our economy.  However, this bill retains a parallel track for those already in line, in which there is no cap based on points.  It essentially increases all areas of immigration across the board.  Why not pass piecemeal legislation just on the beneficial aspects of the bill?

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They Lied to us Then About Immigration; They are Lying Now

Monday, April 15th, 2013 and is filed under Blog, Economy, Immigration

“First, our cities will not be flooded with a million immigrants annually. Under the proposed bill, the present level of immigration remains substantially the same … Secondly, the ethnic mix of this country will not be upset … Contrary to the charges in some quarters, [the bill] will not inundate America with immigrants from any one country or area, or the most populated and deprived nations of Africa and Asia … In the final analysis, the ethnic pattern of immigration under the proposed measure is not expected to change as sharply as the critics seem to think.” […]

“The bill will not flood our cities with immigrants. It will not upset the ethnic mix of our society. It will not relax the standards of admission. It will not cause American workers to lose their jobs.” [Ted Kennedy at Judiciary Committee hearing on Feb. 10, 1965, commenting on the Hart-Celler Act]

What is it not?  It is not millions of people cascading across the border….It is not welfare benefits for those folks immediately.  In fact, it’s in the bill right now that they cannot get AFDC benefits….It is not immediately wives, husbands, and children will come across. Not the case.” [Chuck Schumer on the House floor, commenting on 1986 amnesty bill].

Well, the rest is history.  It is impossible to quantify how much the last two decades of illegal immigration – a direct result of the ’86 amnesty – has cost us in education, healthcare, welfare, refundable tax credits, and criminal justice.  It is impossible to quantify how much the 1965 Kennedy bill has upset the balance of the country, ballooned the welfare state, and created a permanent Democrat majority in many parts of the country.

Now, instead of being ashamed of his past failures and lies, Chuck Schumer is back pushing amnesty for the people who were never supposed to come here as a result of his original amnesty.  This is about as Orwellian as it gets.  Now he has Marco Rubio to do his bidding and use mellifluous language to cajole conservatives into supporting another “Charlie Brown” style immigration bill.

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The Fundamental Flaws with Comprehensive Immigration Deform

Thursday, April 11th, 2013 and is filed under Blog, Economy, Immigration

There’s one overarching problem with all of the proposals for comprehensive immigration reform.  They are being drafted by the same La Raza/big labor/big corporate welfare coalition that blew up our immigration system and engendered this problem in the first place.  Having a couple of Republicans lend their names to the pack of wolves guarding the henhouse of “reform” will not change the fact that these people want open borders, endless supplies of low-skilled immigrants, welfare recipients, and Democrat voters.  Their promises about enforcement and welfare after legalization are about as valuable as the Palestinian promise to stop the terror after getting a state.

Border Security/Enforcement

The Senate’s Gang proposal will immediately legalize every single illegal before even their tepid conditions for enforcement are implemented.  The other so-called hoops they have to jump through are only preconditions for a path to citizenship.  Moreover, the same logic that is pushing them to legalize them now will persist for those who don’t jump through the hoops later.  They are all predicated on the fact that we can’t enforce the laws and we can’t deport illegals when we find them.   So what are they going to do with the ones who don’t jump through the hoops or pay the fines and taxes?  What are they going to do with those who came here more recently?  Deport them?  What are they going to do with all those friends and relatives who come here and overstay their visas to take advantage of the amnesty?   Deport them?  These guys already stated that they have no desire to do that.

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The $20 Trillion Welfare Question

Wednesday, April 3rd, 2013 and is filed under Blog, Economy

Drudge has linked to several articles this morning reporting on the record number of people below the poverty line in the country.  The latest numbers from the Census Bureau show that 50 million people, including 20% of children in the country, are living below the poverty line.  The poverty rate is at its highest levels since the ‘60s.

The amazing thing about all these articles from the liberal media is that they cannot confront reality even when it smacks them in the face.  This AP story decries the $86 billion in sequester cuts and how they will affect the success of anti-poverty programs.  Aside for the fact that half the cuts are incurred by the military and that spending levels for anti-poverty programs will essentially be frozen at Obama-era levels, the absurd irony is totally lost on these reporters.  We are witnessing these record poverty levels precisely after five decades of the War on Poverty, and particularly after the sharpest rise in spending on welfare programs.

The question that no liberal can answer is this: why is poverty at an all-time high after $20 trillion in spending on welfare programs (before Obamacare kicks in)?  Do we need to spend just another $20 trillion to find that magical panacea?  Yet, these obdurate fools have the audacity to look at baseline spending cuts, which haven’t even taken effect yet, as the culprit for the poverty that has already been created, perpetuated, and exacerbated by the welfare state.

Robert Rector and Jennifer Marshal put out an informative piece several months ago detailing the failures of the welfare state.  They found that our $20 trillion in inflation-adjusted spending on welfare programs has cost more than three times all of the real wars combined.  Our annual combined federal and state welfare spending is approaching $1 trillion.  Spending on Food Stamps alone has gone from $19.8 billion in 2000 to $84.6 billion in 2011.   In 1966, the poverty rate was 14.7%.  Now it’s at 15%.  We literally could have flushed $20 trillion down the toilet and netted the same result (actually the lack of dependency would have resulted in less poverty).

The biggest insanity of liberal politics is that they can come back every election year and say that people will languish in poverty….if we don’t continue the same policies that have grown poverty for a half-century.  It is impossible for any sane person to actually believe that throwing more money at the problem will solve poverty.  Well, maybe in the case of the media you can apply Psalms 82 – “they did not know and they do not understand [that] they will walk in darkness.”  But with regards to the elected politicians, they know exactly what they are doing.  Their objective is not to help the poor; it is to create a permanent dependency class in order to consummate a permanent Democrat governing class.  By that measure, their policies have been a resounding success.

After answering the $20 trillion question, we must also answer the 12 million dollar question: how will granting undocumented Democrats an inevitable path to voting rights, including the “Dreamers” who will receive an expedited path, help turn the tide against the fake war on poverty?

Illegal Immigration and the Pesky GOP Base

Wednesday, March 20th, 2013 and is filed under Blog, Economy, Immigration

When Lucy kept tricking Charlie Brown with the football, at least she pretended to place the football on the ground each time he kicked it.  Obama has never even pretended to start enforcing our immigration laws, yet one Republican after another is committing to amnesty – I mean pathway to citizenship – I mean – never mind.  In fact, as Republicans are committing to legalization now in return for a promise of enforcement later, Obama is letting thousands of criminal aliens out of jail.  This is not a recipe for repeating the mistakes of 1986; this is a recipe for perpetual lawlessness.

Most conservatives would love to solve this issue once and for all and put it in the rear view mirror.  Conservatives want to put an end to the cynical use of our immigration system to import welfare recipients and Democrat voters.  But there are two fundamental flaws with every proposal – form the House and Senate Gang of Ochos to the Rand Paul Gang of Uno.

First, enforcement is not a legislative problem; it is an administrative problem, and to some extent, a judicial problem.  How can Republicans float a ‘legalization for enforcement’ deal while Obama is refusing to enforce any law, is letting criminal aliens out of jail, and is suing states for enforcing laws?  Why are they agreeing to concessions without a parallel commitment from Obama to build the physical fence, pursuant to the law passed in 2006?

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Immigration as a Public Charge

Tuesday, February 19th, 2013 and is filed under Blog, Immigration

Our immigration system is broken, but not in the way that those who utter such declarations believe it to be.  Immigration can be an integral part of a pro-growth economic agenda.  It can also become a public charge.  When liberals lament our broken immigration system, they are suggesting that we don’t admit enough low-skilled immigrants who will become a public charge and vote Democrat.  The reality is just the opposite.

According to Senator Jeff Sessions, only .0084 percent of applicants from 2005-2012 were denied visas under the assumption that they would constitute a public charge.  During the turn of the 20th century, this wouldn’t have been such a concern because we did not have a vast welfare state – one that markets taxpayer-funded services to foreign countries.  Now we do.  Read this Daily Caller exposé and weep:

The United States Department of Agriculture has been working to dispel immigrants’ concerns that getting on Food Stamps will harm their chances of becoming U.S. citizens.

The USDA addresses those fears in Supplemental Nutrition Assistance Program, or food stamp, brochures it distributes to Mexican consulates as part of its “partnership” with the Mexican government “to help educate eligible Mexican nationals living in the United States about available nutrition assistance.”

In one portion of the brochure, USDA’s text asks, “If I get on SNAP benefits, will I be a ‘public charge?’” The brochure then answers: “No. You and your family can apply for and receive SNAP benefits without hurting your chance of becoming U.S. citizens.”

So at a time when food stamp usage has surged to astronomical heights, costing over $80 billion per year, we are insisting that food stamp usage does not constitute a public charge.

In addition, the USDA assures illegal immigrants that they can still secure benefits on behalf of their children:

The brochure further advises immigrants that members of their family could qualify for food stamps, even if they don’t.

“If you are not eligible due to your immigration status, your legal immigrant or citizen children may still qualify,” the brochure reads. ”You do not have to provide immigration information about yourself  when you apply for your legal immigrant or citizen children.”

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CBO: Government to Spend $47.2 Trillion Over Next 10 Years

Tuesday, February 5th, 2013 and is filed under Blog, Debt, Economy

We’ve all been waiting to see the updated CBO Budget and Economic Outlook for 2013 and the next ten years.   Most of the news articles are focusing their headlines on the deficit and debt numbers projected in the CBO report.  But remember that the reason why CBO deficit projections always understate the reality is because they overstate the amount of revenue they expect to come into the Treasury.

CBO projects the gross federal debt to rise to $26.1 trillion by 2023, just under $10 trillion more than it is today.  However, this fails to tell the full story.  CBO is projecting revenues to climb to 19% of GDP, even as they predict lethargic economic growth and high unemployment for the foreseeable future.  This is all the result of their ridiculous practice of statically scoring every dollar of a tax increase as a dollar more earned by the Treasury.  To that end, they are projecting more revenue as a result of the Obama tax hikes.

This is why it’s important to focus on the spending figures in the report.  The projected cost of the federal government during the 10-year budget period from 2014-2023 is $47.2 trillion.  Spending will rise every year for every program (except for defense during the first few years), topping out at $5.94 trillion in annual spending in 2023.  That’s a rate of growth of about 6.7% per year, trouncing the growth of the private sector.

Mandatory spending will comprise roughly $29 trillion of all outlays for the next 10 years, while discretionary spending will top out at $12.85 trillion.  The big three entitlement programs – Social Security, Medicare, and Medicaid – will cost $11.15 trillion, $8.07 trillion, and $4.36 trillion respectively.   Spending on other welfare programs (not including Medicaid) will check in at around $3.3 trillion.

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