In Memo To Wash. Post, Trump Says He Would “Force Mexico To Pay For A Border Wall” By Threatening To Block Immigrant Remittances

Wash. Post: Trump Would “Cut Off The Flow Of Billions” In Remittances Sent To Mexico As Leverage To “Force Mexico To Pay For A Border Wall.” According to an April 5 Washington Post report, Trump said he “would seek to force Mexico to pay for his 1,000-mile border fence” by “threatening to cut off the flow of billions of dollars in payments that immigrants send home to the country.” The Post reported that “the feasibility of Trump's plan is unclear both legally and politically” and pointed to criticism of the proposal by “academics and economists” (emphasis added):

Donald Trump says he will force Mexico to pay for a border wall as president by threatening to cut off the flow of billions of dollars in payments that immigrants send home to the country, an idea that could decimate the Mexican economy and set up an unprecedented showdown between the United States and a key diplomatic ally.

In a two-page memo to The Washington Post, Trump outlined for the first time how he would seek to force Mexico to pay for his 1,000-mile border fence, which Trump has made a cornerstone of his presidential campaign and which has been repeatedly scoffed at by current and former Mexican leaders.

The proposal would jeopardize a stream of cash that many economists say is vital for Mexico's struggling economy. But the feasibility of Trump's plan is unclear both legally and politically, and also would test the bounds of a president's executive powers in seeking to pressure another country.

In the memo, Trump said he would threaten to change a rule under the USA Patriot Act antiterrorism law to cut off a portion of the funds sent to Mexico through money transfers, commonly known as remittances. The threat would be withdrawn if Mexico made “a one-time payment of $5-10 billion” to pay for the border wall, he wrote.

“It's an easy decision for Mexico,” Trump said in the memo, which was written on campaign stationery emblazoned with “TRUMP Make America Great Again.”

[...]

Many academics and economists have said that Trump's notion of impounding remittances could have devastating consequences, harming poor communities and families who rely on funds from abroad to provide food and shelter. [The Washington Post, 4/5/16]

Media Criticize Trump's Plan To Force Mexico To Pay For His Proposed Border Wall By Threatening To Block Remittances

CNN's Chris Cuomo Asks Whether Trump's Plan To Block Remittances Would Be “Abusing The Victims.” On the April 5 edition of CNN's New Day, host Chris Cuomo asked Trump campaign representative Healy Baumgardner whether Trump's proposal to block immigrant remittances as leverage would be “abusing the victims,” noting that the recipients of remittances are often “incredibly impoverished families” (emphasis added):

CHRIS CUOMO (HOST): On the eve of this all-important Wisconsin primary, Donald Trump giving the voters something that they had been asking for. He's going to build that wall, right? What's the big question? The big question's always been 'how'? Out comes a memo from team Trump saying how. The headline is, by blocking remittances -- money that people send from this country to other countries -- specifically Mexican aliens that, in the memo it says, cannot show that they are in this country lawfully. What's this going to mean? A lot of controversy. So let's discuss with Healy Baumgardner, senior press representative for the Trump campaign. You are new, relatively, with the campaign. You are not new to this business, so let's dive right in. It's good to have you on New Day. So, this proposition of blocking remittances. Why is this the right way to pay for this wall?

HEALY BAUMGARDNER: Well, I mean, I think -- let's look the situation in totality. Mr. Trump is a tough negotiator. He knows how to get deals done. We see that historically in his businesses. And this is his way to position from strength, to build a wall, a wall that we need, and Mexico will pay for that wall to be built.

CUOMO: So, blocking remittances -- remittances are basically, usually, money that the workers make here and then send home to their incredibly impoverished families. Is that the right kind of leverage to use or is that abusing the victims?

BAUMGARDNER: It's not abusing the victim. I mean we have 47 percent of Americans on welfare. We don't have an economy here as it is. It is the responsibility of the president of the United States and the commander of chief -- chief, you know, to make sure that our economy is sound. And using that type of leverage is exactly what needs to happen in order to get this done.

CUOMO: Healy, how does Trump get it done? It's going to to be, probably, the way it's planned out here, if he were to become president, obviously, a very strong-arm executive action, something that Donald Trump and many Republicans criticize about President Obama all the time. How does he get something like this through?

BAUMGARDNER: Well, you know, just as he stated in the memo, you know, positioning the deal from strength, negotiating, strong-armed as it needs to be done in order to make it happen. I mean, those types of actions and executive orders remain in place as a resource for a reason. And, you know, to be used delicately. But as commander in chief, you have to make tough decisions. And rebuilding our economy and making America great again is exactly what he'll do when he is elected. [CNN, New Day, 4/5/16]

ABC's Tom Llamas: Trump's Proposal To Block Remittances As Leverage “Would Choke The Mexican Economy,” Fracture Relationship With “A Key Ally” And “It's Unclear” If It's Is “Even Legal.” On the April 5 edition of ABC's Good Morning America, correspondent Tom Llamas raised doubts about Trump's plan, saying it would “choke the Mexican economy” and that “it's unclear if that's even legal”:

TOM LLAMAS: And this morning, for the first time, The Washington Post is reporting on Trump's plan to force Mexico to pay for that border wall he's been talking about for months. As president, Trump says he will try to cut off the money that Mexican immigrants send back to their families. That would choke the Mexican economy. It's unclear if that's even legal and it would definitely fracture our relationship with a key ally and a trading partner. [ABC, Good Morning America, 4/5/16]

Univision Noticias: Expert Explained That Trump's Plan To Block Remittances “Is Not Feasible.” In a report updated on April 5, Univision Noticias' Damià S. Bonmatí slammed Trump's plan, explaining that according to an expert on remittances, Manuel Orozco, the plan “is not feasible.” Translated from Univision Noticias:

Yes, it's true that Mexican families receive billions from the United States: specifically , $21,892,000 in 2014, according to the last report on remittances from Inter-American Dialogue, headquartered in Washington.

What's not true according to this report, is that the Mexican economy depends heavily on these remittances. In 2014, they made up 1.8 percent of the GDP, compared to double-digit percentages in El Salvador and Honduras, among other countries.

[...]

And, besides, it can't be quantified how much of this money is sent by undocumented immigrants. The Pew Research Center estimates that, in 2012, close to 6 million Mexican undocumented immigrants were in U.S. territory, out of approximately 34.5 million immigrants from Mexico in total.

“There are very few occasions in which the government can legally retain and impound income,” Manuel Orozco, who investigates remittances and is the author of Inter-American Dialogue's annual remittance report, explained to Univision Noticias.

[...]

According to Orozco, Trump's proposal to confiscate remittances is not feasible. “A remittance service provider is not authorized to have jurisdiction on immigration policy, for example, to check immigration status,” he added. [Translated from Univision Noticias, accessed 4/5/16]

ABC News Cites Experts Who Say “Blocking Money Transfers” To Mexico “Would Be A Mistake.” In an April 5 article, ABC News' Susanna Kim explained the consequences of implementing Trump's plan. Kim cites Aaron Klein, a Brookings Institution fellow, who said the plan “would be a pretty sharp departure from current practice” and that the laws that Trump intends to change “were never intended to be used to threaten to cut off the flow of migrant worker remittances for foreign policy aims.” According to another expert, Michael Clemens, senior fellow with the Center for Global Development, “Mr. Trump's notions about remittances offer one of many examples of his outright ignorance about economics, and even worse, his lack of interest in basing policy on facts.” As reported by ABC News:

Donald Trump's plan to force Mexico to pay for a border wall by blocking money transfers to the country would be a “mistake” and a total reversal of policy, experts say.

[...]

According to one estimate from the World Bank, Mexico received around $24 billion in remittances in 2014.

“The idea of using this flow of funds to try to implement foreign policy objectives such as border control would be a pretty sharp departure from current practice,” said Aaron Klein, Brookings Institution fellow.

[...]

Millions of immigrants living in the U.S. send money home to family and friends and Klein points out that the typical migrant worker sends money home 14 times a year. While these are small sums, usually around $300, they represent an “extraordinary level” of savings given the worker's income, Klein said.

Donald Trump's plan to force Mexico to pay for a border wall by blocking money transfers to the country would be a “mistake” and a total reversal of policy, experts say.

[...]

According to one estimate from the World Bank, Mexico received around $24 billion in remittances in 2014.

“The idea of using this flow of funds to try to implement foreign policy objectives such as border control would be a pretty sharp departure from current practice,” said Aaron Klein, Brookings Institution fellow.

[...]

Millions of immigrants living in the U.S. send money home to family and friends and Klein points out that the typical migrant worker sends money home 14 times a year. While these are small sums, usually around $300, they represent an “extraordinary level” of savings given the worker's income, Klein said.

[...]

“The Patriot Act and subsequent federal law governing remittances in the Dodd-Frank bill were never intended to be used to threaten to cut off the flow of migrant worker remittances for foreign policy aims,” said Klein, who helped draft the Dodd-Frank Wall Street Reform and Consumer Protection Act. “These laws were intended to track and crack down on the flow of money laundering or support for illegal or terrorist organizations while at the same time providing consumer protections to workers who are sending hard earned cash back home to their parents, grandparents, and children.”

[...]

Blocking remittances could harm the U.S. economy, some economists argue. Michael Clemens, senior fellow with the Center for Global Development has pointed out that “the more U.S. dollars are sent to Mexico, the more the U.S. economy benefits.”

“Mr. Trump's notions about remittances offer one of many examples of his outright ignorance about economics, and even worse, his lack of interest in basing policy on facts,” Clemens told ABC News. [ABCNews.com, 4/5/16]

Slate: Trump's Timeline For Plan Is Not “How The Painstaking Process Of Federal Rulemaking Typically Works.” In an April 5 article, Slate senior business and economics correspondent Jordan Weissman poked holes in Trump's plan to block remittances as a way to pressure Mexico to pay for a border wall, saying Trump's three-day plan “is not how the painstaking process of federal rulemaking typically works,” and that remittance service providers would probably litigate the plan “and lock this issue up in court for years”:

Now Trump is offering a slightly different, slightly more fleshed-out plan. It hinges on revamping, or threatening to revamp, the Patriot Act's “know your customer” rules, otherwise known as Section 326, which basically require banks and other financial institutions to ask for a reasonable amount of identification from the people who walk in their doors before letting them open an account. Currently, these regulations explicitly exclude wire transfers from companies like Western Union. That's where Trump's three-day plan comes into play.

Day 1: Trump would direct his administration to propose a rewrite of the current regs so that they cover wire transfers, thereby blocking undocumented Mexicans living in the U.S. from sending remittances.

Day 2: Mexico “will immediately protest.”

Day 3: Trump will make them an offer they can't refuse: Pony up a several billion to cover the wall, and the White House won't follow through and implement the final regulation.

Suffice to say, this is not how the painstaking process of federal rulemaking typically works. And unsurprisingly, Woodward and Costa very kindly called up some legal analysts who soberly explained that Trump's plan would “surely be litigated,” since it would involve “a large expansion” of banking regulations beyond the actual words of the Patriot Act. A blunter way of putting it: Western Union would probably sue the pants off the Trump administration and lock this issue up in court for years, if not derail it entirely. Section 326 states that the “Treasury shall prescribe regulations setting forth the minimum standards for financial institutions and their customers regarding the identity of the customer that shall apply in connection with the opening of an account at a financial institution.” (Italics mine.) It would not be hard to make a colorable legal claim that, when Congress wrote account, they were talking about things like brokerage and bank accounts, not one-off transactions like sending your grandmother in Oaxaca a birthday gift.

Even if it could pass legal muster, it's also not clear whether Trump's regulatory scheme poses that much of a threat to Mexico. After all, “undocumented” immigrants often have fake documentation, such as stolen Social Security numbers and forged ID cards, precisely so they can work and send money back home. [Slate, 4/5/16]

Fox News Latino: Experts “Questioned The Legality” Of Trump's Plan, Called It “A Large Expansion” Of What The Patriot Act Allows. On April 5, Fox News Latino's Andrew O'Reilly wrote that Trump's plan “raises complicated legal questions.” Experts he quoted enumerated concerns with Trump's proposal to block remittances to Mexico, including “driv[ing] more people into the illicit economy,” and they raised questions about the legality of expanding the reach of the Patriot Act, as well as potential damage to the American economy. As reported by Fox News Latino:

The plan indeed raises complicated legal questions, but marks the first clear proposal by Trump for financing the ambitious border wall project that has become a cornerstone of his presidential campaign - and a punching bag for his political foes.

[...]

Experts say such a move would damage the economy in many parts of Mexico, but the poorer and more rural areas - the home bases of many drug cartels - would be particularly hard hit. Without the money sent from relatives and friends living in the U.S., residents of states like Michoacán and Guerrero would be forced to look at other avenues for income. One of the biggest beneficiaries of the move could be narco-traffickers.

“One of the potential risks of cutting off remittances is you drive more people into the illicit economy,” Eric Olsen, the associate director of the Latin American program at the Wilson Center in Washington, D.C., told Fox News Latino. “All the major remittance-sending [U.S.] states also have problems with organized crime.”

Experts also questioned the legality of regulating money transfers and if Trump would have the political capital to push his proposal through Congress.

“Trump is giving an extremely broad definition of this section of the Patriot Act and what it allows, and it'd surely be litigated,” Stuart Anderson, executive director of the National Foundation for American Policy, told the Washington Post . “It would be a large expansion beyond what the text reads.”

His memo fails to mention how he would force financial institutions and money wire services from preventing those funds from being sent to Mexico. It is also vague as to how commercial transactions across the border might be affected as well as how the federal government would deal with financial transactions that take place over the Internet.

“The president of the United States can't just tell banks and Western Union to stop sending money to Mexico,” Olsen said. “We have a presidency, not royalty.”

[...]

Some experts say these measures would not only hurt Mexicans but also Americans. Mexico is the third-largest trade partner of the U.S. behind Canada and China. Total trade between the two nations is estimated be more than $506 billion a year, according to Census Bureau data, and many states have Mexico as their principal trading partner. [Fox News Latino, 4/5/16]

Atlantic Says Congress Would Still Need To Appropriate Funds For A Wall. The Atlantic's Uri Friedman wrote that even if Trump's plan of blocking remittances succeeded in forcing Mexico to make a one-time payment to fund construction of a wall, the U.S. Congress would still need to approve, since legislators would “need to appropriate the money to build the wall”:

Trump, in a memo toThe Washington Postreleased this week, stated that blocking remittances would be his preferred method of compelling Mexico to pay for the wall. As president, he would propose refashioning counterterrorism regulations to require that money-transfer companies like Western Union ask immigrants to present their legal documents before wiring money outside the United States. Mexican officials will immediately protest, Trump predicts, but they'll probably capitulate and “make a one-time payment of $5-10 billion” to prevent the regulation from going into effect. Remittances serve “as de facto welfare for poor families in Mexico,” Trump explains. “There is no significant social safety net provided by the state in Mexico.” In short: The Mexican government will have to choose between forsaking its poorest citizens or building Trump's wall. It will be “an easy decision for Mexico,” Trump claims.

Even if all these machinations caused Mexico to cough up cash, the U.S. Congress would need to appropriate the money to build the wall. “It is likely that the vote for funding construction of a border wall would be the biggest, most consequential, and hardest-fought since the passage of Obamacare,” Geraghty writes. "[U]ntil all of these obstacles were overcome--until funding was procured from Mexico, the Congress gave its approval, and the courts signed off--construction of the wall couldn't even begin. Structural engineers argue that, pulling out all the stops, the wall could be completed in four years. Trump's signature promise likely couldn't be fulfilled until mid-way through his second term at the earliest." [The Atlantic, 4/5/16]

Univision's Detector De Mentiras: Experts Say Trump's Plan “Would Be Extreme And Outside Of Current Legal Parameters.” On April 5, Univision's fact-checking division, Detector de Mentiras, considered whether the president of the United States would have the power to implement Trump's plan to block remittances to Mexico. According to experts they consulted, including former Assistant Secretary of State for Western Hemisphere Affairs Arturo Valenzuela, Trump's “absurd measure” has no “legal or political basis.” Translated from Detector de Mentiras:

Detector de Mentiras considered the following question: Does the president of the United States have the power to block remittances?

Not explicitly. The current legal system does not authorize this blockage, but it's possible that, through interpretations of laws like the Patriot Act, Trump -- if elected president -- could be able to execute these measures. However, it's highly likely that these policies would be challenged in a legal battle in federal courts, both from remittance service providers and immigrant human right organizations, among others.

There's consensus among the experts consulted by Detector de Mentiras that the measure would be extreme and outside of current legal parameters. It was even suggested that the measure could incentivize illegal money transfers through people known as “viajeros”.

[...]

Arturo Valenzuela, an expert in Latin American Studies at Georgetown University and a former special assistant to Bill Clinton on that topic, pointed out that “blocking remittances from Mexicans has no legal or political basis. It cannot be done unless someone has committed a crime. It's an absurd measure.” [Univision.com, Detector de Mentiras, 4/5/16]

This post has been updated to include additional examples.