Long Beach Press Telegram

Immigrant worker amnesty may cost $29B
Report by proponents of tight borders disputed by immigrant groups.
By Lisa Friedman
From our Washington Bureau

Wednesday, August 25, 2004 - WASHINGTON — Poorly educated and often unskilled, illegal immigrants cost the federal government $10 billion annually, and the net cost would nearly triple to $29 billion if they became legalized, according to a report released Wednesday.

The report, by a group that advocates tighter border controls, debunked the conventional wisdom that illegal immigrants don't pay payroll taxes. More than half of them work "on the books" and they pay about $16 billion annually in federal taxes, but they receive far more in federally subsidized services about $26 billion, the report said.

"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 their unwillingness to work," said Steven A. Camarota, research director for the Center for Immigration Studies, a Washington, D.C.-based think tank favoring low immigration.

"There is no single better predictor of income in the modern American economy than one's education level. As a result, a large share of illegals are likely to remain poor even if given legal status."

Immigration advocates blasted the study as election-year immigrant-baiting.

"It's nothing new. It's always around campaign time when anti-immigration groups come out with reports that are not as accurate as they could be," said Rep. Hilda Solis, D-El Monte, who questioned the study's numbers and cited other reports that found households headed by illegal immigrants contribute about $8,100 more than they receive in benefits.

Dissenting opinion

"Where is the acknowledgment that, overall, immigrants pay more in taxes than they use in services and contribute billions to our national income every year? Where are the estimates of how much the U.S. benefits from the education immigrants receive in their countries of birth?"

The report, entitled "The High Cost of Cheap Labor," examined the gap between federal taxes and services in 2002, based on U.S. Census Bureau figures collected in March 2003.

The problem is not that illegal immigrants use too many social services in fact, researchers found they use 46 percent less than legal immigrants.

But with two-thirds of illegal immigrants lacking a high school diploma, they enjoy little hope of making a substantial financial contribution to the U.S. tax base with or without a green card, the researchers said.

Estimates place the number of illegal immigrants in the United States at 8 million to 10 million.

In 1992, the Golden State Center for Policy Studies estimated that Los Angeles County spent about $276 million each year providing health, education and welfare benefits to illegal immigrants. Since then, some Los Angeles County officials offered an estimate of the county's health-care costs for illegal immigrants at roughly $500 million a year.

Legal-status plan

Democratic presidential challenger John Kerry has advocated a four-part plan giving a citizenship path to illegal immigrants who have paid taxes and pass a security screening.

The report argues for stricter enforcement of immigration laws, which Camarota argued would boost wages of native-born workers as well as reduce the federal costs of illegal immigration.

Researchers estimated that illegal immigrants, if given amnesty, would pay 77 percent more in federal taxes about $3,200 a year. But they also would become eligible for more public programs like Medicaid and the Earned Income Tax Credit, and each household would cost the government about $8,200 a year compared to $2,700 now.

Critics said the services-for-taxes calculation tells only part of the story.

"Nothing is said about profits earned by employers of immigrants, the tax revenues these profits generate, the revenue produced by immigrant businesses, and the consumption and economic activity created by immigrants," Sharry said.