Illegal Alien Amnesty Bill Bloats Welfare

Congress is in the midst of the most dramatic overhaul of our nation’s immigration laws in 80 years. So why is hardly anyone asking the basic question: How might this affect government costs?

In the case of the immigration bill passed in the Senate, a measure sponsored by Senators Mel Martinez (R.-Fla.) and Chuck Hagel (R.-Neb.), we have an answer: It would raise them substantially.

The bill would grant amnesty to about 10 million illegal immigrants and put them on a path to citizenship. Once they become citizens, the net additional cost to the federal government of benefits for these individuals will be around $16 billion per year. The bill would also spur a rapid new flow of low-skill immigrants with its program for “guest workers” (for life, that is) and other provisions.

Income Redistribution

To make matters worse, once an illegal immigrant becomes a citizen, he has the right to bring his parents to live in the U.S. The parents, in turn, may become citizens. The long-term cost of government benefits for the parents of 10 million recipients of amnesty could be $50 billion per year or more. In the long run, the Hagel-Martinez bill, if enacted, would be the largest expansion of the welfare state in 35 years. The guest-worker-for-life program would add even further costs.

Welfare can be defined as means-tested aid programs. These programs provide cash, non-cash, and social service assistance that is limited to low-income households. The major means-tested programs include Food Stamps, Temporary Assistance to Needy Families, public housing, the earned income credit and Medicaid. Historically, recent immigrants were less likely to receive welfare than native-born Americans.

But over the last 30 years, this historic pattern has reversed. As the relative education levels of immigrants fell, their tendency to receive welfare benefits increased. By the late 1990s, immigrant households were 50% more likely to receive means-tested aid than native-born households. Moreover, immigrants appear to assimilate to welfare use. The longer immigrants live in the U.S., the more likely they are to use welfare.

The picture for illegal immigrants, who would receive amnesty under the bill, is even more alarming. Roughly half of current illegal immigrants are high-school dropouts. Use of welfare among legal immigrants who are high-school dropouts is three times the rate for the U.S. native born population as a whole. The rate for low-skill immigrants granted amnesty would be similar. Overall, welfare costs added by this group would be quite high.

Illegal immigration is now a major cause of child poverty. According to the Pew Hispanic Center, 4.7 million children of illegal immigrant parents currently live in the U.S. Some 37% of these children are poor. While children of illegal immigrant parents make up around 6% of all children in the U.S., they are 11.8% of all poor children.

This high level of child poverty among illegal immigrants in the U.S. is in part due to low education levels and low wages. It is also linked to the decline in marriage among Hispanics in the U.S. Within this group, 45% of children are born out of wedlock. Among foreign-born Hispanics the rate is 42.3%. By contrast, the out-of-wedlock birth rate for non-Hispanic whites is 23.4%. The birth rate for Hispanic teens is higher than for black teens. While the out-of-wedlock birth rate for blacks has remained flat for the last decade, it has risen steadily for Hispanics. These figures are important because, as noted, some 80% of illegal aliens come from Mexico and Latin America.

In general, children born and raised outside of marriage are seven times more likely to live in poverty than children born and raised by married couples. Children born out of wedlock are also more likely to be on welfare, to have lower educational achievement, to have emotional problems, to abuse drugs and alcohol, and to become involved in crime.

Federal and state governments currently operate a massive system of income redistribution: The upper-middle class is taxed, and money and services are transferred to the lower-income half of the population. In 2004, some $583 billion was transferred in this way. Current immigration in the U.S. disproportionately brings poorly educated individuals with a high probability of unwed births into the U.S. Over the last 20 years, around 10 million individuals without a high-school diploma have entered the United States. These individuals inevitably end up on the recipient end of the income-redistribution equation, providing an extra tax burden on the already hard-pressed middle-class taxpayers.

There is a remarkably foolish idea now running through the Senate that the key to solving the Social Security crisis is to import into the U.S. tens of millions of low-skilled immigrants, earning perhaps $20,000 per year, along with their families. The folly of this should be apparent. For most of these individuals, receipt of the earned income tax credit and other refundable credits will outweigh Social Security taxes paid. The overall costs such individuals will add to government programs throughout their lifetime (including welfare, Social Security, Medicare, education for children, transportation and law enforcement) will greatly exceed taxes paid.

Immigration to the U.S. is a privilege, not a right. Immigrants should be net contributors to the government and society, not a fiscal burden. To reduce the looming Social Security deficit and to strengthen the nation, the U.S. should encourage immigration of high-skill workers who will be fiscal contributors, not low-skill workers who will be fiscal takers. In this respect, the Senate immigration bill is on the wrong course: It will make the finance books of government worse, not better.