Tag Archives: 2013 immigration reform proposals

Immigration Reform Is Not Amnesty

This post was originally published at the Cato-at-Liberty blog here and is reproduced with the author’s permission.

Many opponents of immigration reform have labeled any type of legalization for unauthorized immigrants “amnesty.” In common terminology, an amnesty is a general forgiveness for past offenses. Calling immigration reform amnesty brands it with a scarlet letter in the minds of many who are skeptical of reform. A recent video made by the Cato Institute explains just some of the many steps an unauthorized immigrant will have to go through to become legalized if the Senate’s immigration reform becomes law:

Here are some of the steps (this is not an exhaustive list) an unauthorized immigrant must follow to earn the initial registered provisional immigration (RPI) status:

  • In the country prior to 2012
  • Pays any and all outstanding tax bills (not back taxes)
  • Goes through national security and background checks
  • $1,000 fine
  • $500 fee
  • Then the unauthorized immigrant will receive a work permit valid for six years

After six years, the immigrant will need to apply for another RPI permit:

  • Proves that she’s been employed for virtually the entire six year period
  • Be at no less than 100 percent of the federal poverty level
  • $500 fee

After four years, the immigrant can apply for a green card if she:

  • Proves she can speak English
  • Proves she hasn’t been on welfare
  • Passes another round of background and security checks
  • Pays all of the normal fees associated with a green card
  • The federal government meets most of its immigration enforcement goals

That doesn’t seem like amnesty to me.

CBO Dynamically Scores Immigration Bill

This post was originally published on the Cato-at-Liberty blog here and is republished with the permission of the author.

The Congressional Budget Office has fiscally scored the Senate’s immigration bill, S. 744, and found that it will decrease fiscal deficits over the next 20 years—giving a huge boost to reform proponents.  In line with criticisms made by me and others, the CBO departed from orthodoxy and assumed that S. 744 would affect economic growth (i.e., they dynamically scored the bill)—arguing that the economic and fiscal gains from immigration reform are clear.  These findings are broadly consistent with Cato’s findings here.

The CBO produced two scores of S. 744.  The first was less dynamic, assuming that GDP and the workforce would grow as a result of immigration. Increased numbers of workers will add to GDP, producing growth by definition, and not displacing many other workers.  The second score is more dynamic, taking into account many of the economic effects of immigration reform using an enhanced Solow model.

The less-dynamic CBO score found that immigration reform will reduce the federal deficit by about $197 billion by increased GDP and tax revenues through adding six million people to the workforce by 2023.  Over a period of 20 years, the CBO estimated that this legislation would reduce deficits by about $700 billion—a sizeable decrease.  In what seems to be a specific dig at the 50-year span of the recent Heritage study, the CBO wrote that, “we cannot determine whether enactment of S. 744 would lead to an increase in on-budget deficits … in any of the three 10-year periods starting in 2033.”

The more dynamic CBO score found that S. 744 would not affect the budget by 2023.  However, because the dynamic economic effects of S. 744 would affect the economy slowly, the CBO predicts a $300 billion decrease in deficits from 2023-2033 greater that the $700 billion reported in the less-dynamic score.

The more-dynamic CBO model predicts $1.197 trillion in reduced deficits over the next 20 years if immigration reform is passed.

Delving into the details of the CBO’s more-dynamic score, they estimated that S. 744 would increase GDP by 3.3 percent in 2023 and 5.4 percent in 2033, relative to the baseline.  Per capita GNP would lower by .7 percent by 2023 but be higher by .2 percent in 2033.  Wages would be .5 percent higher in 2033 under S. 744.

The more-dynamic score takes into account these effects from S. 744:

  1. Increased size and employment in the economy.
  2. Increased average wages after 2025.
  3. Slightly increased unemployment rate through 2020.
  4. Increased quantity of capital investment.
  5. Increased productivity of labor (due to complementary task specialization).
  6. Increased productivity of capital (due to increase in supply of labor and TFP).
  7. Higher interest rates.

The CBO took account of some of the main findings in the economic literature about the economic effects of immigration.  For example, the CBO predicts there will be a 12 percent increase in the wages of legalized immigrants.

Conceptually, dynamically scoring legislation is a big step toward rationally judging the costs and benefits of policy changes.  Legislation that changes the size of the economy or the pace of economic growth will affect future tax revenues that will, in turn, affect the fiscal state of the federal government.  CBO scores have been inaccurate over time—many wildly so.  They should never be the final word on the estimated net fiscal costs of immigration reform, but this is the most thorough examination to date. The CBO’s findings broadly confirm Cato’s research that immigration reform will be economically beneficial to immigrants and the country as a whole.

The Gang of 8 immigration deal

I’m not a political junkie (anymore) and I try not to follow all the feints and counter-offers and posturing and whatnot that comprises so much of political discourse, but at this point the momentum for immigration reform in Washington seems really to be bearing fruit. A deal has been made. The New York Times celebrates:

Huge news from the scorched desert of immigration reform: germination!

At last there is a bill, the product of a bipartisan group of senators who have been working on it for months, that promises at least the hope of citizenship for 11 million undocumented immigrants. It is complicated, full of mechanisms and formulas meant to tackle border security, the allocation of visas, methods of employment verification and the much-debated citizenship path…

There will be much to chew on in coming weeks, but it is worth a moment to marvel at the bill’s mere existence, and at the delicate balancing of competing interests that coaxed this broad set of compromises into being…

The bill gets around the “amnesty” stalemate by turning the undocumented into Registered Provisional Immigrants — not citizens or green-card holders, but not illegal, either. They will wait in that anteroom for a decade at least before they can get green cards. But they will also work, and travel freely. The importance of legalizing them, erasing the crippling fear of deportation, cannot be overstated.

Yes! Deportation is a particular disgraceful feature of the American polity, and it will be a tremendous moral relief to have it, if not permanently and generally abolished, at least abolished for most of the millions who live under the threat of it now. The Times deplores the length and difficulty of the path to citizenship:

That said, a decade-plus path is too long and expensive. The fees and penalties stack up: $500 to apply for the first six years of legal status, $500 to renew, then a $1,000 fine. If the goal is to get people on the books and the economy moving, then shackling them for years to fees and debt makes no sense.

The means of ejection from the legalization path, too, cannot be arbitrary and unjust — people should not be disqualified for minor crimes or failure to meet unfair work requirements. It should not take superhuman strength and rectitude, plus luck and lots of money, for an immigrant to march the 10 years to a green card.

Here I’m ambivalent, except about the “means of ejection” sentence. You can’t justly deport someone just because they don’t want a job, and to deport someone for, say, a speeding ticket, is a violation of just proportionality. My sympathies lie with a relatively short and easy path to citizenship. But reason tells me that if your goal is an immigration regime that is simultaneously incentive-compatible and humane, you can’t make the path to citizenship easy. And $500 here and $1,000 there are nothing compared to the income gains that immigrants to the US typically enjoy, though I’d prefer to see money extracted from immigrants in the form of taxes attached to earnings rather than as lump-sum fines and fees, so we can raise more revenue from those doing relatively well while mitigating the hardship we cause for the poorest immigrants. Continue reading “The Gang of 8 immigration deal” »

Heightening the contradictions

I hope this becomes law and all…

Report: Senate immigration plan sets deportation timeframe

The bipartisan Senate immigration plan would deport immigrants who illegally entered the U.S. after 2011, a Senate aide told Reuters on Friday.

The plan would give most of the approximately 11 million unauthorized immigrants a way to stay in the U.S. and eventually seek citizenship — but those who entered the country since the beginning of 2012 would have to leave, according to the staffer.

“People need to have been in the country long enough to have put down some roots. If you just got here and are illegal, then you can’t stay,” the aide said.

The bipartisan “Gang of Eight” senators is working out the final details of a broad-ranging immigration reform bill, with hopes to unveil it on Tuesday so the Judiciary Committee can begin to examine it on Wednesday. Sources say major policy differences have been ironed out.

“I don’t see, looking forward the next few days, any major barrier in the way,” Sen. Charles Schumer (D-N.Y.), who has led the immigration talks, said earlier this week.

Negotiators had hoped to unveil the legislation this week, but it slipped down the Senate agenda following Wednesday’s announcement of a deal on gun violence legislation.

The bill would increase border security, give unauthorized citizens permanent legal status and offer some a pathway to citizenship after 13 years, increase the number of high-skilled visas and create a guest-worker program for low-skilled immigrants. Both business and labor coalitions have been involved in the negotiations and are still on board.

… but it still leaves large, seemingly unanswerable questions about implementation and justice. First, the 2011 date is clearly arbitrary. No one could claim it was OK to immigrate with documents before 2011 but wrong thereafter. Second, how do you check whether people arrived in 2011 and after? Of course, everyone will have a strong incentive to say they arrived sooner. Third, the same compelling reasons of humanity and commonsense which motivate this amnesty will obviously still be around to motivate future amnesties. Indeed, an amnesty now (sorry for the politically incorrect terminology) will only further undermine the strange 20th-century national socialist notion that it’s somehow morally acceptable to seize by force a person who has done no one any harm, rip them out of their family and community, and ship them off to some country they don’t want to go to just because they happen to have been born there and weren’t issue some document by a consular official with whom none of the parties concerned (friends, relatives, landlords, etc.) are even acquainted. Fourth, because this amnesty will surely create greater expectations of future amnesties, it will increase the incentives for more people to come in anticipation of future amnesties. I’m all in favor of that. I support the amnesty as a means of incentivizing the next wave of undocumented immigration, as much as out of humanity and decent hospitality towards those who have arrived already. But at the end of the day, the norms and values and behaviors and assumptions of a decent society just cannot be reconciled with the practical aspect of migration restrictionism, and amnesty won’t solve the problem, but will only heighten the contradictions.

Tiered Guest Workers — Preliminary Details & Observations

This post was originally published on the Cato-at-Liberty blog here and is republished with the permission of the author.

Union and business negotiators have supposedly reached a deal on the major aspects of the guest worker visa program.  The details have not been released yet and the utility of such a proposal will rest there, but here are some brief observations on the broad strokes released:

  1. Tiered visa program.  The plan appears to create a tiered guest workers visa program based on the state of the economy.  Under the first tier, firms will be allowed to hire 20,000 visas in 2015 that would ratchet up to 75,000 in 2019.  The second tier could then kick in if the economy is growing quickly and unemployment is below a preset threshold, going up to an annual cap of 200,000 per year.  Under a third tier, employers sound like they would be able to hire a large number of guest workers if they are willing to “pay significantly higher wages.”  According to the Mexican Migration Monitor, almost 700,000 unauthorized immigrants entered in 2006, up from 500,000 in 2005.  If the regulations, fees, and wage controls for the third-tier are minimal, this tiered program could reduce unauthorized immigration significantly if the sectors of the economy that employ unauthorized immigrants can apply for them.
  2. Sector limitations.  The construction industry would be limited to no more than 15,000 visas annually.  As I wrote here, housing starts provided a huge incentive for unauthorized immigrants to enter to work in construction or other housing-related sectors of the economy.  Unauthorized immigration collapsed beginning in mid-2006 as housing starts declined precipitously, reducing demand for construction workers.  But with housing starts picking up, unauthorized immigration will increase again too.  15,000 total annual visas is not enough to siphon most unauthorized immigrants seeking construction employment into the legal market.  However, details in the tiered visa system could allow for some wiggle room there.       
  3. Wage controls.  It appears that guest worker wages will be determined from complex formula that considers actual wages paid by employer to similar U.S. workers, industry wage scales, and regional variations in compensation.  Current guest worker visas are similarly regulated with disastrous and expensive results that encourage illegal hiring.  Replacing all of these regulations with a fee is a much simpler, cheaper, and effective way of incentivizing employers to hire Americans first.  Stacking the regulatory deck too much in favor of hiring Americans, even in industries for which there are very few American workers, will just incentivize employers to look in the black market – defeating the purpose of immigration reform.  More enforcement (code for bureaucracy) will either fail to halt that behavior or halt it by destroying large sectors of the economy through regulatory micromanagement.   
  4. Worker mobility.  An unambiguously positive development is that guest workers would be allowed to switch jobs very easily.  Tying guest workers to employers was always a bad policy, one that could lead to employer abuse and justified numerous bureaucrats to intrusively inspect working conditions.  By allowing labor mobility, guest workers can look out for their own conditions and switch jobs when appropriate – obviating expensive bureaucratic oversight of employers and guest workers. 

These preliminary observations are based on broad policy outlines in numerous news stories rather than actual legislation.  I will update these observations as more details are released or the actual plan is published.