The Heritage Foundation, led by former Sen. Jim DeMint, rolled out its new study that estimates immigration reform will cost the economy $6.3 trillion, as “a minimum estimate.” Although anti-immigration advocates will surely cite Heritage’s findings in the upcoming Gang of Eight bill markup, many conservatives have rejected the study altogether.
At a press conference Monday, Heritage economist Robert Rector admitted the study has limitations. “It is not an analysis of the entire immigration reform bill, which is something I hope to do in the future,” Rector said of the 102-page paper. “But this report focuses primarily on amnesty.”
According to Heritage, legal status for undocumented immigrants would cost trillions in Social Security, Medicare, and unemployment benefits, means-tested benefits like Medicaid, public education, and population-based services like police and parks. Because undocumented immigrants cannot access some of these services now, Heritage says costs will “explode” 14 years after the bill becomes law.
The new report contradicts the think tank’s 2006 position on immigration. Heritage then wrote, “the argument that immigrants harm the American economy should be dismissed out of hand” and urged for a comprehensive bill. “A lopsided, ideological approach that focuses exclusively on border security while ignoring migrant workers (or vice versa) is bound to fail.”
Asked about its reversal since 2006, Heritage VP Derrick Morgan said health care and bank regulation caused them to reevaluate immigration. “That was a much different time,” he said. “It was before the experience that we had with the stimulus bill, Obamacare, and Dodd Frank, for example, where you had catch-all comprehensive bills, so we’re much more skeptical of that kind of legislation now. And we’re also a much different economy as well.”
But in a widely debunked 2007 report, Rector argued the immigration bill would cost taxpayers $2.6 trillion. Today’s study manages to double the 2007 estimate because it now includes virtually every program, from education to fire departments, in addition to retirement benefits.
The study stands alone in a field of research that finds legal immigration to be a net plus in tax revenue, education, and higher average wages. As a result, many conservatives do not buy Heritage’s findings, including Sen. Jeff Flake (R-AZ) and Grover Norquist.
“When public discourse focuses solely on potential costs of reform, we lose sight of key economic benefits of a smarter immigration policy,” said a statement from Bipartisan Policy Center’s immigration task force, co-chaired by former governor Haley Barbour. “They start a disproportionate number of new businesses, employing hundreds of thousands of workers and contributing billions to the economy. Newly legalized immigrants would further expand the economy and our tax base, particularly after earning full access to the institutions that helped make America the world’s greatest mobilizer of human potential.”
Paul Ryan piled onto the criticism. “The Congressional Budget Office has found that fixing our broken immigration system could help our economy grow,” he said. “A proper accounting of immigration reform should take into account these dynamic effects.”
Cato, meanwhile, has zeroed in on Heritage’s scoring of the estimated cost to taxpayers. In this report, Heritage does not use the same dynamic scoring methodology that conservatives — including Heritage — typically use. “Heritage’s former president supports dynamic scoring, and now so does the CBO, at least for immigration,” Alex Nowrasteh writes. “For the sake of an honest debate, I sure hope Heritage’s upcoming report does too.” The study also takes a snapshot at immigration, ignoring immigrants’ contributions to the labor force,and entrepreneruship — benefits recently highlighted by conservative economist Douglas Holtz-Eakin.
The American Enterprise Institute also criticized Heritage’s analysis in a blog post this afternoon.