In June, Washington fought and lost its own Little Big Horn. Attempting to push through comprehensive legislation to secure America's broken borders and fix dysfunctional immigration laws, Congress - like Custer - fought at the wrong place at the wrong time. The politicians fought outnumbered, garnering withering criticisms from the right and the left. They deserved to lose.

Washington lost because the draft bill proposed in the Senate would have made the challenge of securing the U.S.-Mexican border more, not less, difficult. The legislation would have encouraged more illegal migration. It would have saddled federal, state and local governments with crippling financial burdens and cheapened the value of U.S. citizenship.

Making compromises at every turn, the legislation lost sight of the nature of the problem, and what border and immigration reforms are needed to keep the United States free, safe and prosperous.

Know Your Enemy. Fixing a problem starts with understanding the problem. More than 500,000?people illegally cross the southern border a year, and millions more live unlawfully inside the United States. These troubles, however, are mere symptoms of the two real issues.

No. 1. The United States shares about 2,000 miles of border with Mexico. That border is an economic engine that generates hundreds of billions a year in benefits for both countries. It is, however, a border out of control?- and that creates a serious security problem. Transnational criminals are exploiting the chaos, and cartels are fighting over control of a corridor that ferries a multibillion-dollar-a-year business of drugs, people and weapons. There is nothing going on in Baghdad that has not been tried on the border: kidnapping, bombings, beheadings. The cartel wars and violence and lawlessness they breed are making U.S. borders a dangerous place, destroying property and putting lives at risk. Going after the gangs has to be a top priority. Dealing with illegal immigration is part of the mix. Serious criminals hide among the 500,000 individuals who illegally cross the border each year. A significant drop in illegal crossings would allow law enforcement to focus resources on criminals victimizing people on both sides of the border.

No. 2. By even the most conservative estimates, the United States has an unlawful population of at least 12 million. This population serves as a magnet for further illegal migration. According to a Pew Hispanic Center study in 2003, individuals working in the United States sent almost $30 billion to their families in Latin America and the Caribbean. As the single largest form of direct foreign investment in the region, these remittances have become the economic engine of Latin America. As long as the unprecedented economic importance of remittances remains, individuals will seek access to the U.S. labor market by legal or illegal means. That pressure has overwhelmed America's ability to secure its own border.

The challenges of an unlawful population that accounts for about 4 to 5 percent of everyone living in America - or about one in every 25 people in the country - also reach well beyond the border. They are largely the source of undocumented workers referred to as cheap labor. In truth, the costs of low-wage, undocumented labor is foisted on state and local communities, from providing various entitlements to the law-enforcement expenses involved in incarcerating criminal aliens. As a result, while immigration overall has a net-positive effect on the U.S. economy, the fiscal costs of illegal migration often fall disproportionately on small communities. Up to 3 million people who illegally crossed the border, for example, are living in Texas. That's about 20?percent of the unlawfully present population in the United States, and the public benefits they receive?- like education and emergency-room care - are a crippling burden.

There are other issues as well, like public health. Recently, the case of Andrew Speaker, the globetrotting honeymooning lawyer infected with tuberculosis, gained the attention of thousands of newspaper articles and hours of TV coverage because of his ability to slip past border officials. What the media largely missed is that the United States already has a major communicable disease problem. And the individuals entering the United States legally through legitimate points of entry are the least part of it. Tuberculosis, including strains that are increasingly drug-resistant, is one of the fastest-spreading diseases in the world. In part, this is because of the spread of HIV/AIDS, which reduces the human immune system and leaves individuals more susceptible to TB. According the World Health Organization, more than 8 million people a year get TB, and about 98 percent live in the developing world. Most illegal migration comes from the developing world to Europe and the United States. Many of these individuals never pass through a point of entry, which is the most likely source of a human-carried pandemic.

When the Senate considered a bill that would immediately grant legal status, including the right to pass back and forth across the U.S. border, to anyone living unlawfully in the United States - with no health check required - everyone should have been concerned.

Missing in Action. As far as solving America's border and immigration woes, logic was largely missing from the legislation proposed in the Senate that started out by granting amnesty to virtually anyone. For starters, this seriously flawed proposal would have undermined the rule of law by granting massive benefits to those who have willfully violated U.S. laws while denying benefits to those who have played by the rules, and sometimes even to U.S. citizens.

The Senate's immigration reform proposal would not improve border security and could actually worsen the problem of illegal immigration. The most dramatic impact of the legislation would be to allow millions of immigrants who are unlawfully present in the United States to remain, critically undermining the deterrent effect of U.S. immigration laws and border security. As recent experience in both the United States and Europe demonstrates, legalization measures only spur further unlawful migration.

Like the Senate legislation, the Immigration Reform and Control Act of 1986 was a bipartisan compromise strongly supported by the president. When President Reagan signed the bill, he declared, "It will remove the incentive for illegal immigration." More than 2 million signed up for amnesty in 1986; the unlawful population in the United States today is probably five times that.

Proponents of the Senate bill and the Congressional Budget Office largely dismissed the expense of amnesty by issuing a standard 10 year outlook for quantifying the costs and benefits. Many of the most profound costs associated with the bill occur after the point when amnesty recipients get full citizenship. Then the check comes due. Robert Rector, an analyst at the Heritage Foundation, who looked at the "out year" costs of amnesty, found that it would greatly increase long-term costs to taxpayers. Granting amnesty to illegal immigrants would, over time, increase their use of means-tested welfare, Social Security and Medicare. Fiscal costs would rise in the intermediate term and increase dramatically when amnesty recipients reach retirement. Although it is difficult to provide a reliable estimate, it seems likely that if 10 million adult illegal immigrants in the United States were granted amnesty, the net retirement cost to government - benefits minus taxes - could exceed $2.6 trillion.

No one knows the true number of those here who would sign up for amnesty. The response to the 1986 amnesty proved far greater than expected. In addition, since the standards for amnesty qualification could be easily falsified, there a significant number of fraudulent applications might be expected. Finally, Medicare and Medicaid rates could rise far faster than current CBO projections. That means that a system growing so fast that it is already on course to bankrupt the federal budget could happen just that much faster.

Stop the Insanity. The United States has been ramping up security on the border for decades. Spending has tripled and has had almost no impact on stemming the flow of illegal crossings. Also, only about half of those living unlawfully in the United States crossed an open border. The other half entered legally and overstayed their visas. Only securing the border would be like locking the door but leaving the window open.

There is, however, a sensible strategy that would work, based on four basic points.

1. Enforce the laws. Numerous laws already exist that, if enforced in a targeted manner, would discourage illegal immigration and the employment of illegal labor and send a signal that such activities will no longer be overlooked. Recent actions by the administration prove that reasonable enforcement measures - well short of massive deportations - can significantly reduce the number of illegal border crossings.

2. Regain control of the southern border. Many of the border-security provisions of the Senate proposal are being implemented as requirements of previous legislation, including the Secure Fences Act of 2006 and the Intelligence Reform and Terrorism Prevention Act of 2004. This should continue. Responsible border security and workplace enforcement makes America safer.

3. Emphasize legal immigration. The process by which individuals enter the country legally must be fair, orderly and efficient - welcoming those who abide by immigration laws and denying entry and advantages to those who violate the law. The integrity of this process is important to protecting and encouraging a meaningful naturalization and citizenship process.

4. Create flexible legal opportunities to work in the United States. A balanced and well-constructed temporary worker program that allows for a market-driven source of labor provided by a rotating temporary workforce would diminish incentives for illegal immigration by providing an additional option for legal entry. This would foster national security and serve a growing economy.

Together, these elements - along with a rejection of amnesty - offer a real possibility for strengthening national security and replacing an undocumented labor force with temporary workers and new legal immigrants. Additional options may become reasonable once these policies are allowed to operate over time.

This strategy is realistic and feasible in the short term. Most of the tools required to beef up border security and pursue workplace enforcement already have been passed and mostly authorized by Congress. The only missing programmatic component is a practical and realistic alternative for legal temporary workers.

Without serious policy change, the illegal population in the United States will continue to grow, the burden on local communities will increase, the stresses on civil society will become greater, and border security will become more expensive while remaining just as ineffective. On the other hand, with a handful of initiatives, Congress and an administration working to implement existing and new national security and immigration laws could achieve a comprehensive solution in a reasonable amount of time. A far brighter future would unfold.

As with any major policy goal, reducing illegal entry and presence in the United States will take time and perseverance. Likewise, it is misleading and naïve to suggest that every policy aspect can and should be settled up front in one all-encompassing agreement. The challenge is to answer the big questions first so that the others fall into place or are susceptible to later resolution. This approach to immigration is analogous to the policy success of welfare reform in the 1990s. The use of incentives and disincentives to encourage work reduced welfare rolls over time by 60 percent, through the decreased entry and increased exit of welfare-program participants.

Securing a future where America's borders are no longer porous, its laws are respected, and illegal labor is replaced by legal workers and legal immigrants is an achievable objective. The way forward is not to repeat the failures of the past but to pursue an incremental strategy of real reforms. With these steps, the president and Congress can deliver on their promises to provide border security and to realize comprehensive immigration reform. This achievement would help lawmakers to not only regain the trust and confidence of the American people, but also to meet their solemn obligations to keep the nation safe, prosperous and?free for all Americans - and all those who will become Americans - today and for generations to come.

James Carafano, a retired U.S. Army lieutenant colonel, is an expert in defense affairs, military operations and strategy, and homeland security at The Heritage Foundation. A former assistant professor at the U.S. Military Academy in West Point, he has authored many books and studies.