Illegal Immigration and the Federal Budget

[Joe Ribaudo]

The High Cost of Cheap Labor
Illegal Immigration and the Federal Budget

Executive Summary


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This study is one of the first to estimate the total impact of illegal immigration on the federal budget. Most previous studies have focused on the state and local level and have examined only costs or tax payments, but not both. Based on Census Bureau data, this study finds that, when all taxes paid (direct and indirect) and all costs are considered, illegal households created a net fiscal deficit at the federal level of more than $10 billion in 2002. We also estimate that, if there was an amnesty for illegal aliens, the net fiscal deficit would grow to nearly $29 billion.

Among the findings:

Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household.


Among the largest costs are Medicaid ($2.5 billion); treatment for the uninsured ($2.2 billion); food assistance programs such as food stamps, WIC, and free school lunches ($1.9 billion); the federal prison and court systems ($1.6 billion); and federal aid to schools ($1.4 billion).


With nearly two-thirds of illegal aliens lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels and resulting low incomes and tax payments, not their legal status or heavy use of most social services.


On average, the costs that illegal households impose on federal coffers are less than half that of other households, but their tax payments are only one-fourth that of other households.


Many of the costs associated with illegals are due to their American-born children, who are awarded U.S. Citizenship at birth. Thus, greater efforts at barring illegals from federal programs will not reduce costs because their citizen children can continue to access them.


If illegal aliens were given amnesty and began to pay taxes and use services like households headed by legal immigrants with the same education levels, the estimated annual net fiscal deficit would increase from $2,700 per household to nearly $7,700, for a total net cost of $29 billion.


Costs increase dramatically because unskilled immigrants with legal status -- what most illegal aliens would become -- can access government programs, but still tend to make very modest tax payments.


Although legalization would increase average tax payments by 77 percent, average costs would rise by 118 percent.


The fact that legal immigrants with few years of schooling are a large fiscal drain does not mean that legal immigrants overall are a net drain -- many legal immigrants are highly skilled.


The vast majority of illegals hold jobs. Thus the fiscal deficit they create for the federal government is not the result of an unwillingness to work.


The results of this study are consistent with a 1997 study by the National Research Council, which also found that immigrants' education level is a key determinant of their fiscal impact.

A Complex Fiscal Picture
Welfare use. Our findings show that many of the preconceived notions about the fiscal impact of illegal households turn out to be inaccurate. In terms of welfare use, receipt of cash assistance programs tends to be very low, while Medicaid use, though significant, is still less than for other households. Only use of food assistance programs is significantly higher than that of the rest of the population. Also, contrary to the perceptions that illegal aliens don't pay payroll taxes, we estimate that more than half of illegals work "on the books." On average, illegal households pay more than $4,200 a year in all forms of federal taxes. Unfortunately, they impose costs of $6,950 per household.



Social Security and Medicare. Although we find that the net effect of illegal households is negative at the federal level, the same is not true for Social Security and Medicare. We estimate that illegal households create a combined net benefit for these two programs in excess of $7 billion a year, accounting for about 4 percent of the total annual surplus in these two programs. However, they create a net deficit of $17.4 billion in the rest of the budget, for a total net loss of $10.4 billion. Nonetheless, their impact on Social Security and Medicare is unambiguously positive. Of course, if the Social Security totalization agreement with Mexico signed in June goes into effect, allowing illegals to collect Social Security, these calculations would change.

The Impact of Amnesty. Finally, our estimates show that amnesty would significantly increase tax revenue. Because both their income and tax compliance would rise, we estimate that under the most likely scenario the average illegal alien household would pay 77 percent ($3,200) more a year in federal taxes once legalized. While not enough to offset the 118 percent ($8,200) per household increase in costs that would come with legalization, amnesty would significantly increase both the average income and tax payments of illegal aliens.

What's Different About Today's Immigration. Many native-born Americans observe that their ancestors came to America and did not place great demands on government services. Perhaps this is true, but the size and scope of government were dramatically smaller during the last great wave of immigration. Not just means-tested programs, but expenditures on everything from public schools to roads were only a fraction of what they are today. Thus, the arrival of unskilled immigrants in the past did not have the negative fiscal implications that it does today. Moreover, the American economy has changed profoundly since the last great wave of immigration, with education now the key determinant of economic success. The costs that unskilled immigrants impose simply reflect the nature of the modern American economy and welfare state. It is doubtful that the fiscal costs can be avoided if our immigration policies remain unchanged.

Policy Implications
The negative impact on the federal budget need not be the only or even the primary consideration when deciding what to do about illegal immigration. But assuming that the fiscal status quo is unacceptable, there are three main changes in policy that might reduce or eliminate the fiscal costs of illegal immigration. One set of options is to allow illegal aliens to remain in the country, but attempt to reduce the costs they impose. A second set of options would be to grant them legal status as a way of increasing the taxes they pay. A third option would be to enforce the law and reduce the size of the illegal population and with it the costs of illegal immigration.

Reducing the Cost Side of the Equation. Reducing the costs illegals impose would probably be the most difficult of the three options because illegal households already impose only about 46 percent as much in costs on the federal government as other households. Thus, the amount of money that can be saved by curtailing their use of public services even further is probably quite limited. Moreover, the fact that benefits are often received on behalf of their U.S.-citizen children means that it is very difficult to prevent illegal households from accessing the programs they do. And many of the programs illegals use most extensively are likely to be politically very difficult to cut, such as the Women Infants and Children (WIC) nutrition program. Other costs, such as incarcerating illegals who have been convicted of crimes are unavoidable. It seems almost certain that if illegals are allowed to remain in the country, the fiscal deficit will persist.

Increasing Tax Revenue by Granting Amnesty. As discussed above, our research shows that granting illegal aliens amnesty would dramatically increase tax revenue. Unfortunately, we find that costs would increase even more. Costs would rise dramatically because illegals would be able to access many programs that are currently off limits to them. Moreover, even if legalized illegal aliens continued to be barred from using some means-tested programs, they would still be much more likely to sign their U.S.-citizen children up for them because they would lose whatever fear they had of the government. We know this because immigrants with legal status, who have the same education levels and resulting low incomes as illegal aliens, sign their U.S.-citizen children up for programs like Medicaid at higher rates than illegal aliens with U.S.-citizen children. In addition, direct costs for programs like the Earned Income Tax Credit would also grow dramatically with legalization. Right now, illegals need a Social Security number and have to file a tax return to get the credit. As a result, relatively few actually get it. We estimate that once legalized, payments to illegals under this program would grow more than ten-fold.

From a purely fiscal point of view, the main problem with legalization is that illegals would, for the most part, become unskilled legal immigrants. And unskilled legal immigrants create much larger fiscal costs than unskilled illegal aliens. Legalization will not change the low education levels of illegal aliens or the fact that the American labor market offers very limited opportunities to such workers, whatever their legal status. Nor will it change the basic fact that the United States, like all industrialized democracies, has a well-developed welfare state that provides assistance to low-income workers. Large fiscal costs are simply an unavoidable outcome of unskilled immigration given the economic and fiscal realities of America today.

Enforcing Immigration Laws. If we are serious about avoiding the fiscal costs of illegal immigration, the only real option is to enforce the law and reduce the number of illegal aliens in the country. First, this would entail much greater efforts to police the nation's land and sea borders. At present, less than 2,000 agents are on duty at any one time on the Mexican and Canadian borders. Second, much greater effort must be made to ensure that those allowed into the country on a temporary basis, such as tourists and guest workers, are not likely to stay in the country permanently. Third, the centerpiece of any enforcement effort would be to enforce the ban on hiring illegal aliens. At present, the law is completely unenforced. Enforcement would require using existing databases to ensure that all new hires are authorized to work in the United States and levying heavy fines on businesses that knowingly employ illegal aliens. Finally, a clear message from policymakers, especially senior members of the administration, that enforcement of the law is valued and vitally important to the nation, would dramatically increase the extremely low morale of those who enforce immigration laws.

Policing the border, enforcing the ban on hiring illegal aliens, denying temporary visas to those likely to remain permanently, and all the other things necessary to reduce illegal immigration will take time and cost money. However, since the cost of illegal immigration to the federal government alone is estimated at over $10 billion a year, significant resources could be devoted to enforcement efforts and still leave taxpayers with significant net savings. Enforcement not only has the advantage of reducing the costs of illegal immigration, it also is very popular with the general public. Nonetheless, policymakers can expect strong opposition from special interest groups, especially ethnic advocacy groups and those elements of the business community that do not want to invest in labor-saving devices and techniques or pay better salaries, but instead want access to large numbers of cheap, unskilled workers. If we choose to continue to not enforce the law or to grant illegals amnesty, both the public and policymakers have to understand that there will be significant long-term costs for taxpayers.

Summary Methodology
Overall Approach. To estimate the impact of households headed by illegal aliens, we rely heavily on the National Research Council's (NRC) 1997 study, "The New Americans." Like that study, we use the March Current Population Survey (CPS) and the decennial Census, both collected by the Census Bureau. We use the March 2003 CPS, which asks questions about income, household structure, and use of public services in the calendar year prior to the survey. We control total federal expenditures and tax receipts by category to reflect actual expenditures and tax payments. Like the NRC, we assume that immigrants have no impact on defense-related expenditures and therefore assign those costs only to native-headed households. Like the NRC, we define a household as persons living together who are related. Individuals living alone or with persons to whom they are unrelated are treated as their own households. As the NRC study points out, a "household is the primary unit through which public services are consumed and taxes paid." Following the NRC's example of using households, many of which include U.S.-citizen children, as the unit of analysis makes sense because the presence of these children and the costs they create are a direct result of their parents having been allowed to enter and remain in country. Thus, counting services used by these children allows for a full accounting of the costs of illegal immigration.

Identifying Illegal Aliens in Census Bureau Data. While the CPS does not ask respondents if they are illegal aliens, the Urban Institute, the former Immigration and Naturalization Service (INS), and the Census Bureau have used socio-demographic characteristics in the data to estimate the size and characteristics of the illegal population. To identify illegal aliens in the survey, we used citizenship status, year of arrival in the United States, age, country of birth, educational attainment, sex, receipt of welfare programs, receipt of Social Security, veteran status, and marital status. This method is based on some very well-established facts about the characteristics of the illegal population. In some cases, we assume that individuals have zero chance of being an illegal alien, such as naturalized citizens, veterans, and individuals who report that they personally receive Social Security benefits or cash assistance from a welfare program or those who are enrolled in Medicaid. However, other members of a household, mainly the U.S.-born children of illegal aliens, can and do receive these programs. We estimate that there were 8.7 million illegal aliens included in the March 2003 CPS. By design, our estimates for the size and characteristics of the illegal population are very similar to those prepared by the Census Bureau, the INS, and the Urban Institute.

Estimating the Impact of Amnesty. We assume that any amnesty that passes Congress will have Lawful Permanent Residence (LPR) as a component. Even though the President's amnesty proposal in January seems to envision "temporary" worker status, every major legalization bill in Congress, including those sponsored by Republican legislators, provides illegal aliens with LPR status at some point in the process. Moreover, Democratic presidential nominee John Kerry has indicated his strong desire to give LPR status to illegal aliens.

To estimate the likely impact of legalization, we run two different simulations. In our first simulation, we assume that legalized illegal aliens would use services and pay taxes like all households headed by legal immigrants with the same characteristics. In this simulation, we control for the education level of the household head and whether the head is from Mexico. The first simulation shows that the net fiscal deficit grows from about $2,700 to more than $6,000 per household. In the second simulation, we again control for education and whether the household head is Mexican and also assume that illegals would become like post-1986 legal immigrants, excluding refugees. Because illegals are much more like recently arrived non-refugees than legal immigrants in general, the second simulation is the more plausible. The second simulation shows that the net fiscal deficit per household would climb to $7,700.

Results Similar to Other Studies. Our overall conclusion that education level is the primary determinant of tax payments made and services used is very similar to the conclusion of the 1997 National Research Council report, "The New Americans." The results of our study also closely match the findings of a 1998 Urban Institute study, which examined tax payments by illegal aliens in New York State. In order to test our results we ran separate estimates for federal taxes and found that, when adjusted for inflation, our estimated federal taxes are almost identical to those of the Urban Institute. The results of this study are also buttressed by an analysis of illegal alien tax returns done by the Inspector General's Office of the Department of Treasury in 2004, which found that about half of illegals had no federal income tax liability, very similar to our finding of 45 percent.
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I have looked into this article, and the "Think Tank" responsible. I personally find their "associations" much less troublesome then our President's.

Joe Ribaudo

[Joe Ribaudo]

Published on Nashville City Paper: Nashville's Online Source for Daily News (http://nashvillecitypaper.com)


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Sheriff cancels meeting with think tank with hate group ties
By sphillips
Created 11/16/2009 - 12:15pm

Kyle Swenson
(1:42 p.m. — Updated with comments from Center for Immigration Studies Executive Director Mark Krikorian)

Sheriff Daron Hall was scheduled this week to make an appearance in Washington, D.C., on a panel discussion hosted by a think tank with alleged hate group ties and founded by a prominent backer of the English Only provision, but he has cancelled the trip after local immigration activists brought the group's history to his attention.

Hall was set to appear Thursday at an event hosted by the Center for Immigration Studies (CIS), a non-partisan group with a long history of association with the Federation of American Immigration Reform (FAIR), an anti-immigration organization that has been placed on the Southern Poverty Law Center's list of hate groups.

CIS recently completed a study on 287(g) and invited Hall to participate in a forum held at the National Press Club entitled “Immigration and Crime: New Studies Examine Crime among Immigrants, Local Enforcement Efforts.”

But last Friday local immigration activists voiced their concerns to the sheriff about the group's connection with FAIR, according to sheriff’s department spokeswoman Karla Weikal.

“Some of the advocates locally came to the sheriff and expressed some concerns about maybe some of the affiliations this center may have,” Weikal told The City Paper. The office was not aware of the affiliations previously, Weikal said.

According to the 2009 Southern Poverty Law Center (SPLC) report on CIS, the group was started in 1985 by former ophthalmologist and FAIR founded John Tanton, a figure at the center of many national immigration-related controversies. Most recently, Tanton's group ProEnglish was responsible [1] for the majority of the financial backing behind Metro Councilman Eric Crafton's English Only proposal.

“CIS' creation was part of a carefully thought-out strategy aimed at creating a set of complementary institutions to cultivate the nativist cause — groups including the Federation for American Immigration Refrom (FAIR) and NumbersUSA,” the report reads.

CIS' Executive Director Mark Krikorian told The City Paper the SPLC has exaggerated Tanton's ties to his group. Tanton helped arrange the first grant for the think tank and CIS operated under FAIR's tax status for a few months after first opening, Krikorian said.

The exaggeration of Tanton's “tenuous and minor” connection to CIS is part of “a broader, concerted effort to delegitimize any skeptic of amnesty or increased immigration,” he said.

“They (SPLC) don't have the balls to describe us as a hate group, they have to do this McCarthyite kind of guilt by association thing,” he said. “Their function is to provide information for this campaign of vilification.”

CIS has been contracted by the U.S. Census Bureau for a study assessing the quality of immigration data and with the Justice Department on how immigration law can be used to combat gangs, Krikorian noted. He said the group is disappointed Hall will not make Thursday's appearance.

“The sheriff can do whatever he needs to do, we're going to be disappointed he's not here but that's his call to make,” Krikorian said. “It's the advocacy groups that are essentially lying to him that are at fault here.”

Hall decided to cancel his appearance because he did not wish to add further strain to the local debate on the controversial 287(g) program.

“[The sheriff] right now is in a mode of building bridges, and he just said if that's going to cause discord among the people [he's] trying to building bridges with, it's certainly something he doesn't want to participate in,” Weikal said.

Hall came under fire a year ago when he spoke at a dinner hosted by the Middle Tennessee Chapter of the Council of Conservative Citizens, a white nationalists group also listed on the Southern Poverty Law Center's list of hate groups.

City News Center for Immigration Studies daron hall FAIR Federation of American Immigration Reform hate group
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Source URL: http://nashvillecitypaper.com/content/c ... group-ties
Links:
[1] http://blogs.nashvillescene.com/pitw/20 ... englis.php
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You decide.......

Joe Ribaudo

[Joe Ribaudo]

Another voice is heard:

http://www.cbsnews.com/8301-503544_162- ... 03544.html

Joe Ribaudo

[Joe Ribaudo]

AZ State Senator Sylvia Allen on SB1070


(Article from the Tucson Citizen on May 1, 2010):ate Senator Sylvia Allen responds to B1070
http://tucsoncitizen.com/the-cholla-jum ... to-sb1070/

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I’m Arizona State Senator Sylvia Allen. I want to explain SB 1070 for which I voted yes. Rancher Robert Krentz was murdered by the drug cartel on his ranch a month ago. I participated in a senate hearing two weeks ago on the border violence, here is just some of the highlights from those who testified.
The people who live within 60 to 80 miles of the Arizona/Mexico Border have for years been terrorized and have pleaded for help to stop the daily invasion of humans who cross their property . One Rancher testified that 300 to 1200 people a DAY come across his ranch vandalizing his property, stealing his vehicles and property, cutting down his fences, and leaving trash. In the last two years he has found 17 dead bodies and two Koran bibles. Another rancher testified that daily drugs are brought across his ranch in a military operation. A point man with a machine gun goes in front, 1/2 mile behind are the guards fully armed, 1/2 mile behind them are the drugs, behind the drugs 1/2 mile are more guards. These people are violent and they will kill anyone who gets in the way. This was not the only rancher we heard that day that talked about the drug trains. One man told of two illegal’s who came upon his property one shot in the back and the other in the arm by the drug runners who had forced them to carry the drugs and then shot them. Daily they listen to gun fire during the night it is not safe to leave his family alone on the ranch and they can’t leave the ranch for fear of nothing being left when they come back.



The border patrol is not on the border. They have set up 60 miles away with check points that do nothing to stop the invasion. They are not allowed to use force in stopping anyone who is entering. They run around chasing them, if they get their hands on them then they can take them back across the border. Federal prisons have over 35% illegal’s and 20% of Arizona prisons are filled with illegal’s. In the last few years 80% of our law enforcement that have been killed or wounded have been by an illegal. The majority of people coming now are people we need to be worried about. The ranchers told us that they have seen a change in the people coming they are not just those who are looking for work and a better life.

The Federal Government has refused for years to do anything to help the border states . We have been over run and once they are here we have the burden of funding state services that they use. Education costs have been over a billion dollars. The healthcare cost billions of dollars. Our State is broke, $3.5 billion deficit and we have many serious decisions to make. One is that we do not have the money to care for any who are not here legally. It has to stop.

The border can be secured. We have the technology and we have the ability to stop this invasion. We must know who is coming and they must come in an organized manner legally so that we can assimilate them into our population and protect the sovereignty of our country. We are a nation of laws. We have a responsibility to protect our citizens and to protect the integrity of our country and the government which we live under. I would give amnesty today to many, but here is the problem, we dare not do this until the Border is secure. It will do no good to give them amnesty because thousands will come behind them and we will be over run to the point that there will no longer be the United States of America but a North American Union of open borders. I ask you what form of government will we live under? How long will it be before we will be just like Mexico , Canada or any of the other Central American or South American country? We have already lost our language, everything must be printed in Spanish. We have already lost our history, it is no longer taught in our schools, and we have lost our borders.



The leftist media has distorted what SB 1070 will do. It is not going to set up a Nazi Germany. Are you kidding? The ACLU and the leftist courts will do everything to protect those who are here illegally, but it was an effort to try and stop illegal’s from setting up businesses, and employment, and receiving state services and give the ability to local law enforcement when there is probable cause, like a traffic stop, to determine if they are here legally. Federal law is very clear, if you are here on a visa you must have your papers on you at all times. That is the law. In Arizona all you need to show you are a legal citizen is a driver license, MVD identification card, Native American Card, or a Military ID. This is what you need to vote or get a hunting license. So nothing new has been added to this law. No one is going to be stopped walking down the street. The Socialists who are in power in DC are angry because we dare try and do something.The Socialists wants us to just let them come. They want the “Transformation” to continue.



Maybe it is too late to save America . Maybe we are not worthy of freedom anymore. But as an elected official I must try to do what I can to protect our Constitutional Republic . Living in America is not a right just because you can walk across the border. Being an American is a responsibility and it comes by respecting and upholding the Constitution, the law of our land, which says what you must do to be a citizen of this country. FREEDOM IS NOT FREE.

Senator Sylvia Allen .

[Joe Ribaudo]

IT JUST KEEPS GETTING BETTER AND BETTER!________________________________________________

Want to see our heath care program fixed ? Wonder why insurance and hospitalization is so costly for US Citizens ? Here may be a clue !!!



JUST ONE!!!!!(OF HOW MANY)





Just One Hospital

Unbelievable!

Parkland Memorial Hospital in Dallas , Texas is a fairly famous institution and for a variety of reasons:

1. John F. Kennedy died there in 1963

2. Lee Harvey Oswald died there shortly after

3. Jack Ruby-who killed Oswald, died there a few years later.

On the flip side, Parkland is also home to the second busiest maternity ward in the country with almost 16,000 new babies arriving each year. (That's almost 44 per day---every day)!

A recent patient survey indicated that 70 percent of the women who gave birth at Parkland in the first three months of 2006 were illegal immigrants. That's 11,200 anchor babies born every year just in Dallas!!!

According to the article, the hospital spent $70.7 million delivering 15,938 babies in 2004 but managed to end up with almost $8 million dollars in surplus funding. Medicaid kicked in $34.5 million, Dallas County taxpayers kicked in $31.3 million and the feds tossed in another $9.5 million.

The average patient in Parkland in maternity wards is 25 years old, married and giving birth to her second child. She is also an illegal immigrant. By law, pregnant women cannot be denied medical care based on their immigration status or ability to pay.

OK, fine. That doesn't mean they should receive better care than everyday, middle-class American citizens. But at Parkland Hospital , they do. " Parkland Memorial Hospital has nine prenatal clinics. NINE!!!

The Dallas Morning News article followed a Hispanic woman who was a patient at one of the clinics and pregnant with her third child---her previous two were also born at Parkland. Her first two deliveries were free and the Mexican native was grateful because it would have cost$200 to have them in Mexico. This time, the hospital wants her to pay $10 per visit and $100 for the delivery but she was unsure if she could come up with the money. Not that it matters, the hospital won't turn her away. (I wonder why they even bother asking at this point.)

"How long has this been going on? What are the long-term effects?

Well, another subject of the article was born at Parkland in 1986 shortly after her mother entered the US illegally - now she is having her own child there as well. (That's right; she's technically a US citizen.)

These women receive free prenatal care including medication, nutrition, birthing classes and child care classes. They also get freebies such as car seats, bottles, diapers and formula.

Most of these things are available to American citizens as well, but only for low-income applicants, and even then, the red tape involved is almost insurmountable.

Because these women are illegal immigrants, they do not have to provide any sort of legitimate identification - no proof of income. An American citizen would have to provide a social security number which would reveal their annual income - an illegal immigrant need only claim to be poor and the hospital must take them at their word.

Parkland Hospital offers indigent care to Dallas County residents who earn less than $40,000 per year. (They also have to prove that they did not refuse health coverage at their current job.. Yeah, the 'free' care is not so easy for Americans.)

There are about 140 patients who received roughly $4 million dollars for un-reimbursed medical care. As it turns out, they did not qualify for free treatment because they resided outside of Dallas County so the hospital is going to sue them! Illegal's get it all free! But U. S citizens who live outside of Dallas County get sued! How stupid is this?

As if that isn't annoying enough, the illegal immigrant patients are actually complaining about hospital staff not speaking Spanish. In this AP story, the author speaks with a woman who is upset that she had to translate comments from the hospital staff into Spanish for her husband. The doctor was trying to explain the situation to the family and the mother was forced to translate for her husband who only spoke Spanish. This was apparently a great injustice to her.

In an attempt to create a Spanish-speaking staff, Parkland Hospital is now providing incentives in the form of extra pay for applicants who speak Spanish.. Additionally, medical students at the University of Texas Southwestern for which Parkland Hospital is the training facility will now have a Spanish language requirement added to their already jammed-packed curriculum. No other school in the country boasts such a ridiculous multi-semester (multicultural) requirement.

(Sorry for the length, but this needs wide circulation particularly to our "employees" in Congress.)

Remember that this is about only ONE hospital in Dallas, Texas. There are many more hospitals across our country that must also deal with this.

If you want to verify the accuracy of this information:

http://www.snopes.com/politics/immigration/parkland.asp
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