Conservative group warns immigrants could cost US $6.3tn

This assumes that people are just costs and don’t contribute anything

By Anna Fifield

The 11m unauthorised immigrants in the US could cost taxpayers $6.3tn if they were allowed to become American citizens, according to a study from the conservative Heritage Foundation .

The think-tank’s study, which is out of sync with the vast majority of other economic analyses, was immediately criticised for being ideologically driven and selective with the facts.
But Heritage hopes for a repeat of 2007, when it used a similar economic report to motivate opponents of immigration reform during the final year of George W. Bush’s presidency and helped kill a proposed bill.

“No sensible thinking person could read this study and conclude that over 50 years they could have a positive economic impact,” said Jim DeMint, the former Tea Party-backed Republican senator from South Carolina who heads the Heritage Foundation.

The US Senate will this week start considering a bipartisan bill that would overhaul the immigration system by giving undocumented people a 13-year pathway to citizenship, at the same time as increasing border security.

Economists from across the political spectrum have concluded that such reforms would have a net positive impact on the economy, bringing undocumented workers out of the shadows and forcing them to pay taxes. Proponents of immigration reform have been seizing on those reports to try to ensure that Heritage does not derail this year’s planned overhaul.

The bill’s passage through the Senate looks likely but its prospects are not so good in the House of Representatives, where arguments such as Heritage’s will gain more traction.

Heritage has concluded that former unlawful immigrants, whose average age is 34, would receive $9.4tn in government benefits and services over their lifetimes, while they would contribute only $3.1tn in taxes.

“This should be considered a minimum estimate,” wrote Robert Rector and Jason Richwine, the study’s authors, saying it probably undercounted the number of people who would be given legal status while underestimating growth in welfare benefits.

Under the Senate plan, unauthorised immigrants would not be eligible for any federal services during the decade-long legalisation process.

But Heritage added up the benefits they would be able to access once they got green cards giving them permanent residence – including social security and Medicare, food stamps and public housing, public education and “population-based services” such as police and parks.

This report is saying they’re not Americans and they have no dream, and that troublesme

- Doug Holtz-Eakin, former Congressional Budget Office director

The aggregate annual deficit for all unlawful immigrant households would amount to $43.4bn in the years between legalisation and citizenship, the report concluded. But it would “soar” to about $106bn a year as these new citizens became eligible for all benefits.

Heritage’s last report in 2007 – when Mr Rector concluded that illegal immigrants would cost the economy a net $2.6tn – was widely criticised for using a flawed methodology.

The latest report repeated those mistakes, said Alex Nowrasteh, an immigration analyst at the Cato Institute, a libertarian think-tank that agrees with Heritage on many other issues.

The Heritage report did not take into account any of the benefits of immigration reform, such as higher tax revenues and increased rates of growth and productivity.

“This assumes that people are just costs and don’t contribute anything,” Mr Nowrasteh said.

Doug Holtz-Eakin, a director of the Congressional Budget Office during the last Bush administration, added that the report used a 50-year time horizon to come up with a huge figure by assuming that all new citizens would use all the benefits available to them and “stay poor for ever”.

He added: “This report is saying they’re not Americans and they have no dream, and that troubles me.” Mr Holtz-Eakin had previously issued a report concluding that reform could boost the average rate of real annual gross domestic product growth from 3 per cent to 3.9 per cent over the first decade