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Study: US immigration reform would cost $6.3 trillion

Demonstrators seeking change in immigration policy march on May Day in Los Angeles, California, May 01, 2013
Demonstrators seeking change in immigration policy march on May Day in Los Angeles, California, May 01, 2013. A US political battle raged Monday over the cost of Senate-proposed immigration reform, with a conservative think-tank warning the plan to legali

A US political battle raged Monday over the cost of Senate-proposed immigration reform, with a conservative think-tank warning the plan to legalize 11 million undocumented workers would soar to $6.3 trillion.

The Heritage Foundation, in a report released shortly before amendments are proposed to the bipartisan bill, said legalized immigrants' costs such as Social Security, Medicaid health care for the poor, and unemployment insurance would stack up dramatically faster than many US lawmakers would realize.

The report is certain to galvanize some conservatives in Congress who are opposed to the plan, seen as the most ambitious immigration reform effort in a generation and which was rolled out last month by a "Gang of Eight" senators, four Democrats and four Republicans.

President Barack Obama envisions immigration reform as a major and viable second-term accomplishment, after Republicans who lost last November's election said it was crucial to reach out to minority communities such as Hispanics, the largest beneficiaries of any immigration deal.

But Heritage said the millions of immigrants who would be legalized through "amnesty" would generate massive fiscal deficits over the long term, driven in large part by extra pressures on health care for low-income Americans, public education and services like police, fire and roads.

The bill creates a path to citizenship for the estimated 11.5 million people living in the country illegally, but under certain conditions like tighter border enforcement and after a 13-year wait, during which time they will not be entitled to government aid.

The foundation's study argued that while illegal aliens will start to pay taxes once they register legally, when they become citizens they will be net recipients of government funds.

It said the legalized immigrants would receive those benefits for five decades, if their retirement pension is included, with their cost to government coffers pegged at $9.4 trillion, while they will pay just $3.1 trillion in taxes.

"No sensible thinking person would read this study and conclude that, over 50 years, that it could possibly have a positive economic impact," Heritage president Jim DeMint, a Republican former senator, said at a press conference.

Report co-author Robert Rector warned that the costs jump to about $160 billion per year about 35 years from today, when the bulk of the legalized immigrants reach retirement age.

But pro-reformers immediately assailed the Heritage plan as ignoring the prospect that millions of immigrants would become substantial contributors to the nation's economic prosperity.

Doug Holtz-Eakin, former director of the Congressional Budget Office who now heads the American Action Forum, said the Heritage report did "mislead people about the genuine budgetary impact" of immigration reform.

"The notion that 50 years from now all 12 million who are here illegally will be collecting full benefits is a vast overstatement," he told reporters, adding that under Heritage's formula, the immigrant experience begins and ends in poverty.

"There's no American dream, there's no upward mobility for anyone" according to Heritage, Holtz-Eakin said.

The report more than doubles the cost estimated in a 2007 Heritage study, which said a Senate plan for immigration amnesty being considered that year -- but which ultimately failed -- would cost a net $2.6 trillion.

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