The Senate is currently considering a massive immigration reform
bill, the "Secure Borders, Economic Opportunity and immigration
Reform Act of 2007" (S. 1348). This bill would grant amnesty to
nearly all illegal immigrants currently in the United States.
The fiscal consequences of this amnesty will vary depending on
the time period analyzed. It is expected that many illegal
immigrants who are currently working "off the books" and paying no
direct taxes will begin to work "on the books" after receiving
amnesty, and therefore tax payments will rise immediately. By
contrast, under S. 1348, benefits to these immigrants from Social
Security, Medicare, and most means-tested welfare programs (such as
Food Stamps, public housing, and Temporary Assistance to Needy
Families) will be delayed for many years. In consequence, then, the
increase in taxes and fines paid by amnesty recipients may
initially exceed slightly the increase in government benefits
received. In the long run, however, the opposite will be true. In
particular, the cost of retirement benefits for amnesty recipients
is likely to be very large. Overall, the net cost to taxpayers of
retirement benefits for amnesty recipients is likely to be at least
$2.6 trillion.
Who Are the Illegal Immigrants?
According to the most widely accepted estimates, there were 11.5
million to 12 million illegal immigrants in the United States in
the spring of 2006.[1] Because the number of illegal immigrants
has, on average, increased by roughly 500,000 each year, the number
of illegal immigrants in the U.S. in 2007 is probably around 12
million to 12.5 million; however, these estimates are uncertain,
and the actual number of illegal immigrants may be higher.
As Chart 1 shows, some 49 percent of illegal immigrants are
adult males, 35 percent are adult females, and 16 percent are
foreign-born children. Living in illegal immigrant families are
another 3.1 million U.S.-born children of illegal immigrant
parents.[2] Because they were born inside the U.S.,
these children are considered citizens, not illegal immigrants.
Illegal immigrants now make up about 4 percent of the U.S.
population, meaning that about one in twenty-five persons currently
in the U.S. is here unlawfully. Illegal immigrants make up nearly
one-third of the foreign-born population in the U.S.
As Chart 2 shows, more than half (56 percent) of illegal
immigrants come from Mexico. Another 22 percent come from other
Latin American countries, and 22 percent come from Asia, Europe,
and Africa.[3]
education of Illegal Immigrants.Illegal immigrants
generally have very low education levels. As Chart 3 shows, 61
percent of illegal immigrant adults lack a high school diploma, 25
percent have only a high school diploma, 5 percent have attended
some college, and 9 percent are college graduates, according to the
Center for immigration Studies' estimates.[4] The Pew Hispanic Center
estimates slightly higher education levels: 49 percent without a
high school diploma, 25 percent with a high school diploma only, 10
percent with some college, and 15 percent with college degrees.[5]
Overall, 49 to 61 percent of adult illegal immigrants lack a high
school diploma, compared to 9 percent of native-born adults.
Illegal Immigrants and poverty. Because of
their low education levels, illegal immigrants have a poverty rate
that is roughly twice that of native-born Americans. As Chart 4
shows, the poverty rate of children in illegal immigrant families
is 37 percent, compared to 17 percent among children in
non-immigrant families. The poverty rate among adult illegal
immigrants is 27 percent, compared to 13 percent among
non-immigrant adults.
S. 1348 and the amnesty Process
The Senate's immigration reform bill would offer amnesty and a
path to citizenship to the 12 million to 12.5 million illegal
immigrants currently in the U.S. In addition, its lax evidentiary
standards would encourage millions more to apply for amnesty
fraudulently. Because there is no numeric limit on the number of
amnesties that could be granted under the bill, the actual number
who would receive amnesty under the bill could be far higher.
In general, under S. 1348, any person who was illegally present
inside U.S. borders on January 1, 2007, is eligible for Z visa
status, amnesty, and ultimately citizenship. Excluded from this
rule are illegal immigrants subject to a formal deportation order
issued prior to enactment of the legislation and illegal immigrants
convicted of a felony or three misdemeanors prior to enactment. The
amnesty process consists of four stages leading to citizenship.
Stage One: Probationary Z Visas. Within 180
days of enactment of the bill, the Secretary of Homeland Security
would begin accepting applications for Z visa status from illegal
immigrants. The Secretary can accept applications for up to two
years. The Secretary must grant "probationary Z visa" status to all
amnesty applicants who pass a background check that must be
completed within one business day. Except for those failing the
one-day background check, applicants will automatically be granted
probationary status and issued appropriate documents on the day
after their application, even if the background check has not been
completed.[6]
Stage Two: Permanent Z Visas. The Secretary must
issue a permanent Z visa to every applicant who is determined to
have met four conditions: the individual was inside the U.S.
unlawfully on January 1, 2007; has not left the U.S. for more than
six months since then; is employed or is the spouse or child of an
employed applicant; and has passed more thorough criminal
background checks that may be required. Each Z visa is good for
four years and can be renewed indefinitely for the rest of the Z
visa holder's life.[7] The Secretary cannot grant permanent Z
visas unless the modest enforcement trigger provisions of S. 1348
have been met.[8]
Stage Three: legal Permanent Residence (LPR).All Z
visa holders who pay a $4,000 fine and pass an English test would
become eligible for legal permanent residence (also known as green
card status). Z visa holders must go abroad to apply for LPR status
but may return to the U.S. the same day. No later than 8 years
after enactment, the Secretary of Homeland Security must determine
the number of Z visa holders who are eligible for legal permanent
residence and grant LPR status to all such persons over the
following five years at a rate of 20 percent per year.[9]
During this process, Z visa holders would be granted their own
special "supplemental allocation" of green cards and would not be
required to compete with other visa seekers.[10] In the 13th year
after enactment, the Secretary must provide an additional allotment
of green cards to Z visa holders who are qualified for Z visa
status.
Stage Four: Expanded Eligibility for Government
Benefits. During the initial years an immigrant is in LPR
status, access to government welfare programs may be limited;
however, after five years in LPR status, individuals become
eligible for nearly all welfare programs. legal permanent residents
may also apply for U.S. citizenship at this point.
Eligibility for Government
Benefits
The following outlines eligibility for government benefits at
each stage of the amnesty process. In each case in the following
text, eligibility for a benefit means that the former illegal
immigrant or his family member obtains the same eligibility for
that program as a U.S. citizen would have; that is, he will receive
the benefits if income limits and other normal eligibility
standards applying to U.S. citizens are met.
Probationary and Permanent Z Visa Status.
All children born within U.S. borders to illegal immigrants, Z visa
holders, or legal permanent residents are automatically U.S.
citizens. As such, these children are potentially eligible for all
U.S. welfare benefits from the moment of birth through the rest of
their lives. All children of Z visa holders (both foreign- and
native-born) have the right to attend U.S. public schools and to
receive Head Start and daycare assistance.[11] In addition,
adult Z visa holders and their foreign-born children will be
eligible for medical care under the Medicaid Disproportionate Share
Program.
All individuals placed in probationary Z visa status will be
given lawful Social Security numbers,[12] which makes the Z visa
holder immediately eligible for two refundable tax credits: the
Earned Income Tax Credit (EITC) and the Additional Child Tax Credit
(ACTC). These credits provide cash welfare assistance to low-income
parents. Upon receipt of a lawful Social Security number, Z visa
holders will also be granted the right to earn entitlement to
future Social Security and Medicare benefits. After 10 years of
employment, they will become fully eligible for Social Security and
Medicare benefits, although in most cases the benefits will not
commence until the individual reaches age 67.
legal Permanent Residence. Upon obtaining LPR
status, the non-citizen children of former Z visa holders will
become eligible for Food Stamp benefits.[13] All legal permanent
residents who have a 10-year work history in the U.S. are
automatically eligible for Food Stamps, Medicaid, Supplemental
Security Income, Temporary Assistance for Needy Families (TANF),
and other welfare programs.[14] Many legal residents
without a work history are eligible for Medicaid in 22 states,
including California and New York.[15] Irrespective of employment
history, amnesty recipients will become eligible for 60 different
federal welfare programs five years after receiving legal permanent
residence.
Citizenship. After obtaining citizenship,
individuals become eligible for Supplemental Security Income, a
means-tested cash aid program for disabled and elderly persons.
To summarize this process, all Z visa holders will be eligible
for medical care benefits under the Medicaid Disproportionate Share
Program. Foreign-born children of Z visa holders will be eligible
to attend public schools and receive Head Start and daycare
assistance. Children born inside the U.S. to illegal immigrant
parents and Z visa holders will be eligible for public schooling
and all means-tested welfare programs. Many state and local
governments may also provide benefits and services to Z visa
holders.
Upon obtaining a probationary Z visa, amnesty applicants will
receive a lawful Social Security number, which makes Z visa holders
potentially eligible for the EITC and the ACTC. In addition, they
will begin to earn entitlement to Social Security and Medicare
benefits. Roughly eight years after enactment, amnesty recipients
will begin to enter LPR status and non-citizen children will become
eligible for Food Stamps. legal permanent residents with a 10-year
work history in the U.S. will be eligible for most federal welfare
programs subject to income limits and other admission criteria. No
later than five years after receiving LPR status, amnesty
recipients will be eligible for nearly all means-tested welfare
programs.
The initial limitation on receipt of means-tested welfare will
have only a small effect on governmental costs. welfare is only
part of the benefits received by immigrant families. Moreover, the
average adult amnesty recipient can be expected to live more than
50 years after receiving his Z visa. While recipients' eligibility
for means-tested welfare will be constrained for the first 10 to 15
years, they will be fully eligible for welfare during the last 30
to 40 years of their lives. Use of welfare during these years is
likely to be heavy.[16]
In addition, if S. 1348 is enacted, many state and local
governments are likely to begin giving benefits and services to Z
visa holders that are greater than those currently provided to
illegal immigrants. State governors of both parties will pressure
Congress to relax the eligibility restrictions barring Z visa
holders from receiving most federal means-tested benefits as a way
of relieving fiscal pressure on state and local governments. In the
present political climate, these efforts are likely to prove
successful.
The Net Retirement Costs of
amnesty
Giving amnesty to illegal immigrants will greatly increase
long-term costs to the taxpayer. 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
precise estimate, it seems likely that if 10 million adult illegal
immigrants currently in the U.S. were granted amnesty, the net
retirement cost to government (benefits minus taxes) could be over
$2.6 trillion.
The calculation of this figure is as follows. As noted above, in
2007 there were, by the most commonly used estimates, roughly 10
million adult illegal immigrants in the U.S. Most illegal
immigrants are low-skilled. On average, each elderly low-skill
immigrant imposes a net cost (benefits minus taxes) on the
taxpayers of about $17,000 per year. The major elements of this
cost are Social Security, Medicare, and Medicaid benefits. (The
figure includes federal state and local government costs.) If the
government gave amnesty to 10 million adult illegal immigrants,
most of them would eventually become eligible for Social Security
and Medicare benefits or Supplemental Security Income and Medicaid
benefits.
However, not all of the 10 million adults given amnesty would
survive until retirement at age 67. Normal mortality rates would
reduce the population by roughly 15 percent before age 67. That
would mean 8.5 million individuals would reach age 67 and enter
retirement.
Of those reaching 67, their average remaining life expectancy
would be around 18 years.[17] The net cost to taxpayers of these
elderly individuals would be around $17,000 per year.[18]
Over 18 years, the cost would equal $306,000 per elderly amnesty
recipient. A cost of $306,000 per amnesty recipient multiplied by
8.5 million amnesty recipients results in a total net cost of $2.6
trillion.
These costs would not occur immediately. The average adult
illegal immigrant is now in his early thirties; thus, it will be 25
to 30 years before the bulk of amnesty recipients reaches
retirement. At their peak level, it appears the amnesty recipients
will expand the number of beneficiaries under Social Security by 5
to 10 percent. This will occur at a point when Social Security will
already be running deficits of over $200 billion annually.
This is a rough estimate. More research should be performed, but
policymakers should examine these potential costs very carefully
before rushing to grant amnesty, "Z visas," or "earned citizenship"
to the current illegal immigrant population.
Factors That Could Increase Future
Costs
The $2.6 trillion figure is a rough estimate of future costs
that would result from putting 10 million adult illegal immigrants
on a guaranteed pathway to citizenship. There are a number of
factors that could raise or lower these future costs. Among the
factors that could increase the net cost (benefits received minus
taxes paid) well above $2.6 trillion are the following:
- The actual number of illegal immigrants may be greater than
12 million. The estimated cost of $2.6 trillion in future
retirement costs outlined above assumes that the number of illegal
immigrants in the U.S. in 2007 was around 12 million, based on data
from the Pew Hispanic Center. While the Pew Hispanic Center is the
most widely used source for demographic information about illegal
immigrants, its data assume that some 90 percent of illegal
immigrants appear in the Census Bureau's Current Population Survey
(CPS).[19] It is possible that many illegal
immigrants do not appear in the CPS and that the total number of
illegal immigrants is substantially higher than 12 million. Some
estimates place the number of illegal immigrants as high as 20
million. Clearly, if the illegal immigrant population is greater
than 12 million, then the net retirement costs resulting from
amnesty would be, ceteris paribus, higher as well.
- There is a huge potential for amnesty fraud. In order to
receive amnesty and a Z visa and be put on a pathway to
citizenship, an illegal immigrant must demonstrate that he or she
was in the U.S. illegally and employed on January 1, 2007. However,
the standard to demonstrate residence is very loose. The illegal
immigrant need merely produce two affidavits from non-relatives
asserting that he or she was working in the U.S. on the appropriate
date. The affidavits could even come from other illegal immigrants.
It is doubtful that the Department of Homeland Security has any
real capacity to separate true affidavits from bogus ones,
especially in the crush of processing millions of applications in
the space of a year or two. Consequently, the potential for amnesty
based on fraudulent documents is very high. In the 1986 amnesty, an
estimated 25 percent of the amnesties granted were fraudulent.[20] In
the last 20 years, the underground industry producing fraudulent
documents has grown vastly larger and more sophisticated. In this
round of amnesty, the fraud rate could be as high as or higher than
in 1986, resulting in millions of additional amnesties.
- Spouses and children living abroad may be added to the
amnesty population. In its present form, the bill grants
amnesty to employed illegal immigrants who were in the U.S. on
January 1, 2007. Any spouses, children, and parents of employed
illegal immigrants who were residing in the U.S. on that date will
also receive Z visas and amnesty. However, many illegal immigrants
have spouses and children living abroad; under S. 1348, while
illegal immigrants and their families inside the U.S. are put on a
path to citizenship, families living abroad are not. family members
living abroad would be denied Z visas and would not be permitted to
reside in the U.S. for the foreseeable future. Presumably, the Z
visa holder could have his family join him when he achieves legal
permanent residence, but this would not occur until eight years
after he is initially given the Z visa.
The designers of the bill appear to have excluded spouses and
children living abroad from eligibility for Z visas in order to
lower the apparent number of amnesty recipients, but pressure will
build to eliminate this exclusion. At some point, either before or
after the bill's passage, a "technical correction" will almost
certainly be introduced allowing spouses and children living abroad
to obtain Z visas and get on the pathway to citizenship. For every
10 illegal immigrants living in the U.S., there may be four
dependents living abroad; if the current illegal population is 12
million, the number of additional dependents who could be brought
permanently into the country should the exclusion be eliminated may
be as high as five million.[21] The overall number of
amnesty recipients and dependents could easily reach 17
million.
- Medicaid and Medicare costs are likely to rise faster than
the rate of general inflation. To project the future
governmental costs of amnesty recipients during retirement, this
paper has used the current net governmental costs for elderly
immigrants with skill levels similar to the amnesty population.
These net governmental costs amount to $17,000 per person per year
in 2004; half of this cost was medical care expenditures under the
Medicare and Medicaid programs. The cost of government Medicaid and
Medicare benefits has tended to escalate rapidly both because
medical cost inflation has been greater than the general rate of
inflation in the economy and because the range of medical services
provided by these programs has expanded. The cost of Medicare and
Medicaid services is likely to continue to increase more rapidly
than inflation for the foreseeable future. As a consequence, the
actual retirement costs for amnesty recipients will almost
certainly be greater than $2.6 trillion, even after adjusting for
general inflation.
Factors That Could Reduce Future
Costs
By contrast, three factors could reduce the future costs
estimated in this paper:
- Not all illegal immigrants will get amnesty. The cost
estimate in this paper assumes that all illegal immigrants residing
in the U.S. will receive amnesty. In reality, not every illegal
immigrant who was present in the U.S. on January 1, 2007, will
actually receive amnesty. Some will not apply for a Z visa. Some
will be found ineligible due to lack of proof of residence, despite
the lax evidentiary standards. Some illegal immigrants will fail
the criminal background checks and be rejected.
- Some amnesty recipients will return to their native
countries. Granting amnesty and creating a pathway to
citizenship creates powerful financial incentives for illegal
immigrants to remain in the U.S. permanently. Nonetheless, some Z
visa holders and legal permanent residents will return to their
native countries before reaching old age. Even in this case, some
amnesty recipients will have earned eligibility for Social Security
benefits and thereby will impose governmental costs even after
leaving the nation. To the extent that amnesty recipients leave the
U.S. at some point in the future rather than living out their full
lives in the U.S., future governmental costs will be reduced. This,
however, simply underscores the fact that illegal immigrants, on
average, are a fiscal burden. The longer they remain in the U.S.,
the greater the burden.
- The net taxes paid by second-generation immigrants may
offset some costs. The average amnesty recipient will reach
retirement age in 30 to 35 years. By that time, many of the
children of amnesty recipients will have reached adulthood and will
be receiving benefits in their own right and paying taxes. This
second generation will have better education and higher incomes
than their parents. In consequence, their government benefits will
be lower and their tax payments will be higher than those of their
parents. It is possible that, on average, these second-generation
immigrants will be net fiscal contributors; the taxes they pay
could exceed the benefits they receive. If this is the case, their
net tax payments may offset some the government retirement costs of
their parents; however, in calculating the fiscal contributions of
second-generation families, it is essential to count more than
Social Security taxes paid. A family that pays $3,000 in Social
Security taxes while receiving $30,000 in a variety of government
benefits does not contribute to governmental solvency. At present,
it is uncertain to what extent, if any, the children of potential
amnesty recipients will be net fiscal contributors (paying taxes
exceeding total benefits). Further, even if they are net
contributors, these second-generation families would have to make
very large contributions in order to significantly offset the
$17,000 per year net cost of their parents.
One final factor should be considered: Some illegal immigrants
may become citizens, and thereby impose costs on taxpayers, even
without amnesty. Under current law, a child born inside the U.S. to
illegal immigrant parents is deemed a U.S. citizen. Upon reaching
age 21, this child can petition for his illegal immigrant parents
to be given legal permanent residence. In most cases, the petition
is automatically accepted. Upon receiving LPR, the parents could
begin to gain eligibility to Social Security and Medicare; within
five years, the parents would become eligible for most means-tested
welfare programs.
This means that, even without amnesty, some current illegal
immigrants could become eligible in their retirement years for the
type of benefits described in this study. Consequently, some of the
costs estimated in this paper may occur without amnesty. How many
illegal immigrant parents would, under current law, be placed on
the pathway to citizenship by the petitions of their native-born
children is unknown. Certainly the path to entitlement through the
amnesty provided in S. 1348 is easier and more attractive.
Nonetheless, the fact that some illegal immigrants can obtain
access to government benefits under current law does not reduce the
fiscal costs estimated in this paper; it simply means that a
portion of these costs may occur even if S. 1348 is not
enacted.
Congressional Budget Office Estimate
of S. 1348
At first glance, the figures presented in this paper appear to
differ from the cost estimates of S. 1348 by the Congressional
Budget Office (CBO).[22] However, the CBO has estimated only the
changes in benefits and revenues that would occur in the first 10
years after enactment of S. 1348. By contrast, the retirement costs
analyzed in this paper will not really begin until 25 to 30 years
after passage of the legislation. The current paper and the CBO
study thus analyze very different impacts from the bill.
Currently, very few illegal immigrants are elderly, and
virtually none receive Social Security and Medicare. A major result
of S. 1348 would be to make illegal immigrants eligible for
Medicare, Medicaid, and Social Security during their retirement
years. CBO does not address these retirement costs at all.
The CBO report does conclude that in the first 10 years after
enactment of S. 1348, federal taxes and other revenues paid by Z
visa holders would increase by $63 billion while federal benefits
would increase by $33 billion. This should not be surprising since,
as this paper has pointed out, under S. 1348, increases in tax
revenues would occur immediately while increases in benefits, for
the most part, would not begin for 10 years or more. However, in
subsequent decades, benefits received by amnesty recipients would
increase significantly. When the amnesty recipients reach
retirement age, total benefits received will outstrip taxes paid by
roughly seven to one. Thus, while amnesty may reduce government net
costs slightly in the short run, in the long run, the fiscal
effects will be substantially negative.
There are other limitations to the CBO study. First, it covers
only federal benefits and revenues and ignores state and local
government costs. Second, it covers only changes in spending and
revenue that would result from S. 1348 and ignores the government
benefits currently received by illegal immigrant families. Finally,
the CBO report does not analyze the total fiscal balance of amnesty
recipient families either before or after amnesty. (The total
fiscal balance of a family equals total federal state and local
benefits received by the family minus total taxes paid.) Similarly,
it does not analyze the total fiscal balance of amnesty recipients
either before or after retirement.
Policy Discussion: Reducing the Costs
of immigration Reform
amnesty is not only very expensive, but it also violates the
rule of law and is manifestly unfair. It gives the inestimable gift
of U.S. citizenship to millions of individuals whose sole
qualification for receiving citizenship is that they broke U.S.
laws. Consider that on January 1, 2007, there were hundreds of
thousands of foreigners in the U.S. on a variety of temporary
visas. Because these individuals were here lawfully, none will be
granted citizenship under S. 1348. By contrast those who were in
the U.S. illegally on that same day will be given the privilege of
citizenship.
Consider two foreigners who were in the U.S. on temporary visas
that expired in December 2006. One of these individuals lawfully
returned home upon expiration of his visa; the other chose to
remain in the U.S. unlawfully. Under S. 1348, which of these
individuals will be granted the privileges and benefits of
citizenship? The one who broke the laws, while the individual who
respected the law will have little chance for citizenship. Is this
fair? Of all the people in the world who wish to come to America,
why should any American feel compelled to place those who broke the
laws on a guaranteed path to citizenship?
It is often argued that it is unfair to expect illegal
immigrants who have spent years in the U.S. and have begun to raise
families here to uproot their families and return home. But S. 1348
makes no distinction between illegal immigrants who have been in
the U.S. for decades and those that have been here only a few days.
Everyone who was here illegally on January 1, 2007, is potentially
eligible for citizenship.
In order to constrain fiscal costs, immigration reform should
include three policies:
- Emphasize enforcement. In 1986, the U.S. granted amnesty
to some three million illegal immigrants as a quid pro quo for a
prohibition on the future hiring of illegal immigrants. The amnesty
was granted, but the prohibition on the future hiring of illegal
immigrants was never enforced. S. 1348 repeats the same mistake;
mass amnesty will be granted, but the border and employment
enforcement provisions of the act are hollow and will probably
never be enforced. To avoid repeating the mistakes of 1986,
enforcement must come first.[23]
- Do not grant amnesty. amnesty is unfair and would be
very expensive. Proponents of S. 1348 will argue that there is no
feasible alternative to giving citizenship to all the illegal
immigrants in the U.S. But serious, phased enforcement of a ban on
hiring illegal immigrants would cause many, if not most, illegal
immigrants to voluntarily leave the U.S. and return to their native
countries. To minimize economic disruption, it might be possible to
give some current illegal immigrants temporary work visas, with the
explicit provision that they must return home over time. Such
temporary visas would not grant access to welfare, Social Security,
Medicare, or citizenship. If necessary, the exiting illegal workers
could be replaced by legitimate temporary workers or by permanent
immigrants who have never violated U.S. laws.[24]
- Close the "anchor baby" loophole. As explained above,
under current law, when U.S.-born children of illegal immigrants
turn 21, they can petition the government to grant their illegal
immigrant parents legal permanent residence, thereby conferring an
automatic path to welfare entitlements and citizenship upon the
parents (hence the term "anchor baby"). The popular concept of
"birthright citizenship"-that anyone born in the United States
is automatically a U.S. citizen-is historically and legally
inaccurate and ought to be corrected by Congress.[25] Regardless, this
backdoor path to citizenship for illegal immigrant parents should
be closed.[26]
Conclusion
There are currently at least 12 million illegal immigrants in
the U.S. The immigration reform bill currently being debated in the
Senate would grant amnesty to these individuals and would likely
result in the entry of 4 to 5 million dependents living abroad into
the U.S. as permanent residents. Illegal immigrants receiving
amnesty will immediately begin earning eligibility for Social
Security and Medicare benefits and, after approximately 10 years,
gain access to a wide variety of means-tested welfare programs,
such as Medicaid, Food Stamps, and public housing.
Because amnesty recipients have very low education levels (75 to
85 percent have only a high school diploma or less), they are
likely to receive more in government benefits than they pay in
taxes through most of their lives. When they reach retirement age,
amnesty recipients will impose a large net cost on taxpayers,
receiving each year at least $17,000 more per person in benefits
than they pay in taxes. The illegal immigrants granted amnesty
under S. 1348 are likely to impose a net cost of at least $2.6
trillion on U.S. taxpayers during their retirement years.
Policymakers should carefully consider the potential long-term
fiscal costs before enacting the amnesty provisions of this
bill.
Proponents of S. 1348 will emphasize that amnesty recipients
will pay Social Security taxes during their working years, thereby
presumably helping to alleviate the great burden already on the
government retirement system. Given their low skill levels, the
Social Security tax payments of amnesty recipients will, on
average, be modest. More important is the fact that, in future
years, Social Security benefits will be funded by both Social
Security taxes and general revenue. What matters is not the small
amount of Social Security taxes that will be paid but the overall
fiscal balance (total federal state and local benefits received
minus all taxes paid) of amnesty recipients. If the net benefits
taken by amnesty recipients and their families exceed the Social
Security and other taxes paid, the amnesty recipients will
undermine rather than strengthen the financial support for U.S.
retirees, even before they reach retirement age themselves.
Finally, if S. 1348 is enacted, the public should expect to see
a broad array of new spending proposals and programs designed to
help amnesty recipients move upward economically and socially. Many
of these programs are likely to be enacted into law, further
increasing fiscal pressures.
Robert Rector is Senior
Research Fellow in Domestic Policy Studies at The Heritage
Foundation.