Heritage Foundation Releases Report Claiming Immigration Reform Will Cost Trillions

Heritage Foundation: Immigration Would “Generate A Fiscal Deficit” Of $6.3 Trillion. On May 6, conservative policy group The Heritage Foundation released a report claiming immigration reform would cost $6.3 trillion by enacting “amnesty” for undocumented immigrants:

Over a lifetime, the former unlawful immigrants together would receive $9.4 trillion in government benefits and services and pay $3.1 trillion in taxes. They would generate a lifetime fiscal deficit (total benefits minus total taxes) of $6.3 trillion. (All figures are in constant 2010 dollars.) This should be considered a minimum estimate. It probably understates real future costs because it undercounts the number of unlawful immigrants and dependents who will actually receive amnesty and underestimates significantly the future growth in welfare and medical benefits. [Heritage Foundation, 5/6/13]

Right-Wing Media Promote Heritage's Study

Fox Hosts DeMint To Push Findings Of Heritage's Study. On the May 6 edition of Fox News' America's Newsroom, co-host Martha MacCallum hosted the Heritage Foundation's president, former Republican Senator Jim DeMint to promote the findings of the study. MacCallum noted “controversy of the report” including some objections, but allowed DeMint to claim that immigration reform would cost $6.3 trillion:

MACCALLUM: Talk to me a little bit about this. Because there is controversy about this report. We talked to Steve Moore just a few minutes ago, and your claim is that, according to your study, it would cost trillions of dollars if the legislation was enacted as the Gang of Eight has created it. Why? 

DEMINT:  Well, no one has read the study yet except the folks at Heritage and it's gone through a very strenuous peer review process. I'veread it over the weekend, and it makes it abundantly clear. The number over the 50-year lifespan of an amnesty for unlawful immigrants, it's $6.3 trillion to the American taxpayer. And we know over time that this is going to increase more debt, increase taxes that has a depressing effect on our economy. We know that unlawful immigrants, once they have amnesty are going to replace the jobs of many Americans and depress their salaries. So there is no way you can look at this and say that it's good for the American taxpayer. And that includes immigrants who are here lawfully. We feel like our study, if congress will just consider the cost, will benefit lawful unlawful immigrants more than anyone else. [Fox News, America's Newsroom, 5/6/13]

Fox Nation: "$6.3 TRILLION To Fund Immigration Reform." A May 6 post on Fox Nation linked to a FoxNews.com article on the Heritage study under the headline "$6.3 TRILLION to Fund Immigration Reform":

[Fox Nation, 5/6/13]

Breitbart.com: “Amnestied Immigrants Add $6.3 Trillion To Debt.” A May 6 post on Breitbart.com's Big Government highlighted the “long-anticipated study,” repeating Heritage's claim that immigration reform will cost $6.3 trillion:

Monday morning, the Heritage Foundation is releasing its long-anticipated study of the fiscal impact of providing illegal immigrants a pathway to citizenship. Breitbart News has received an advance copy of the study. Over their lifetimes, the newly legalized immigrants would add a net $6.3 Trillion to the public debt. Heritage notes that this is a minimum estimate. 

[...]

Heritage notes that the debate over the fiscal consequences of amnesty is hampered by a general misconception about the extent of government benefits. The average US household receives more than $31,000 a year in government benefits. One silver lining to the debate over amnesty could be confronting how large America's welfare state has become. [Big Government, 5/6/13]

Drudge Report Hypes Claim That Immigration Reform Will “Cost Trillions.”The Drudge Report linked to an ABC News article on Heritage's study that promoted DeMint's claim, asking if immigration reform “will cost TRILLIONS?”:

[The Drudge Report, 5/6/13]

Even Conservatives Criticize Heritage's Methodology, Findings

Fox's Stephen Moore: “Almost All Economists Disagree” With Heritage's Claim That Immigrants Harm Economy. On Fox's America's Newsroom,Wall Street Journal editorial board member and Fox News contributor Stephen Moore said the study “leaves the impression” that “immigrants are a cost to the economy. That is one thing almost all economists disagree with,that we are very much benefitted by being a nation of immigrants.” [Fox News,America's Newsroom, 5/6/13]

AEI's James Pethokoukis: Heritage Study, “Fails To Capture Indirect But Important Economic Impacts Of Immigration.” According to a blog post by American Enterprise Institute columnist James Pethokoukis, the Heritage study fails to take into account the economic benefits of immigration:

The study, however, fails to capture indirect but important economic impacts of immigration such as increasing economic activity or positively affecting American employment. Both of those would lead to higher tax revenues and reduced transfer payments. Surely every effort should be given to factoring in such dynamic impacts of immigration reform. The Heritage study says, for instance, that “taxes and benefits must be viewed holistically.” So, too, immigration overall. Big policy changes don't exist in a vacuum, isolated from the rest of the economy.

Not making these added calculations raises red flags as to the study's completeness. What about studies of US states that find economic contributions of low-skill immigrants “dwarf their fiscal costs.” Another example: Heritage claims “that unlawful immigration appears to depress the wages of low-skill US-born and lawful immigrant workers by 10 percent, or $2,300, per year.” Yet other highly regarded research finds wage gains at all education levels for US-born workers.

Is immigration reform that potentially expands the population of less-skilled individuals a smart economic policy or not? It's impossible to draw a reasonable conclusion based only on the Heritage study. [American Enterprise Institute, 5/6/13]

Cato's Nowrasteh: Heritage Study Ignores Economic Effects Of Immigration Such As Increase In GDP And Higher Tax Revenue. In comments made to Roll Call's David Drucker, Alex Nowrasteh, the Cato Institute's immigration policy analyst, called the Heritage study “flawed and error prone” and noted that it does not take “account of changes in the economy that would result from immigration”:

Their net-fiscal cost accounting is non-dynamic and does not take account of changes in the economy that would result from immigration, including an increase in GDP, native worker productivity, and in wages for the majority of American workers that all result in higher tax revenue. Still reading through it though so I might be pleasantly surprised. [Roll Call, 5/6/13]

Sen. Rubio Criticized Heritage's Methodology. The Wall Street Journal's Washington Wire blog quoted Senator Marco Rubio (R-FL) as criticizing the use of “static scoring” in Heritage's work. Rubio noted that “dynamic scoring,” which “takes into account how legislation changes behavior and could impact the economy,” was a more accurate estimate of immigration reform:

Some in the GOP fear Mr. Rector will use the latter assessment to make the cost of the bill appear inflated.

“As a pro-growth, fiscal conservative, I have long believed that any legislation impacting our economy can only be fully evaluated by a consideration of both its baseline costs and its impact on growth,” Mr. Rubio wrote. “I commend the Heritage Foundation for its long championship of that view as well.” [Wall Street Journal, 4/18/13]

Sen. Flake: Heritage Study “Ignores Economic Benefits. No Dynamic Scoring.” Senator Jeff Flake (R-AZ) responded to the release of Heritage's study by tweeting “Here we go again. New Heritage Study claims huge cost for Immigration Reform [sic]. Ignores economic benefits. No dynamic scoring”:

[Twitter, 5/6/13]

Former Gov. Haley Barbour (R-MS) On Heritage Foundation Report: “It's A Political Document. It's Not Serious Analysis.” According to a tweet by Jordan Fabian, a political editor at Fusion, Haley Barbour said that the Heritage Foundation Report "[Is] a political document. It's not serious analysis." From Twitter:

[Twitter, 5/6/13]

Rep. Paul Ryan: Heritage Study Is Not “A Proper Accounting Of Immigration Reform.” According to a statement provided to Roll Call, Rep. Paul Ryan (R-WI) said the study should take into account the benefits immigration reform would have on the economy as well as the costs:

House Budget Chairman Paul D. Ryan was critical of The Heritage Foundation study predicting a heavy cost to the taxpayer if Congress approves an immigration overhaul that includes a path to citizenship.

In a statement provided to CQ Roll Call, the Wisconsin Republican had this to say about the Heritage report that the Senate bill's “amnesty” component would cost taxpayers $6.3 trillion over several decades: “The Congressional Budget Office has found that fixing our broken immigration system could help our economy grow. A proper accounting of immigration reform should take into account these dynamic effects.” [Roll Call, 5/6/13]

Washington Post's Rubin Criticizes Heritage's Claim That Immigration Is “Enormously Expensive.” In her Washington Post blog Right Turn, conservative blogger Jennifer Rubin attacked the Heritage Foundation's study, saying "you have to question the intellectual integrity of those parroting these talking points:

The Heritage Foundation will be out shortly with a study that will preposterously claim that the Gang of 8 reform will cost more than $2 trillion. Understand that there are about 11 million people who may be legalized. Really -- each one is going to cost the taxpayers about half a million bucks and contribute nothing? The Cato Institute has already come up with a detailed pre-rebuttal of Heritage's work. And, ironically, even the Congressional Budget Office can figure out that with dynamic scoring of the type pioneered by Heritage (when it was an intellectual trailblazer for conservatives), the country and the Treasury come out ahead.

Such are the perils of a once-respected think tank hiring a reactionary pol instead of a bona fide scholar to head its institution. It is interesting that under more rigorous intellectual leadership Heritage in 2006 reached conclusions entirely at odds with its current anti-immigration stance. [Washington Post, Right Turn, 5/6/13]

Findings Are Based On A 2007 Report With “Fatally Flawed” Methodology

Cato Institute: 2007 Report That Heritage Revised Was “Fatally Flawed.” The conservative think tank Cato Institute wrote that “The Heritage Foundation may soon release an updated version of its 2007 report,” and noted that that report's “flawed methodology produced a grossly exaggerated cost to federal taxpayers of legalizing unauthorized immigrants while undercounting or discounting their positive tax and economic contributions”:

It is imperative that the economic costs and benefits of increased immigration be studied using proper methods and the most recent data.  A previous report by the Heritage Foundation in 2006 entitled, “The Real Problem with Immigration ... and the Real Solution,” by Tim Kane and Kirk Johnson roundly rejected the negative economic assessments of Mr. Rector's 2007 study. Not only does Mr. Rector not speak for the broad conservative movement; it appears that economists who have worked for the Heritage Foundation also disagree with Mr. Rector's conclusions. [Cato Institute, 4/4/13]

Bush Chief Economist: Heritage's Report Lacks A "'Multi-Year Context'And Only Focuses On Low-Skill Households." A June 21, 2007 Washington Post article quoted Edward P. Lazera, chairman of President George W. Bush's Council of Economic Advisers, who criticized the report as “flawed because it lacks a 'multi-year context' and focuses solely on low-skilled households that would be barred from receiving 'the vast majority of welfare benefits' under the president's proposal.” [The Washington Post, 6/21/07]

FactCheck.org: Heritage's Findings Are “Based On Questionable Assumptions.” A 2010 post on FactCheck.org criticized then-senatorial candidate J.D. Hayworth for citing Heritage's study as part of an attack on the 2007 immigration reform bill. The post said that Heritage's estimate of the cost of immigration reform “is based on questionable assumptions, and other experts have criticized it as inflated”:

In support of the ad's claim that the measure would have cost $2.6 trillion, the Hayworth campaign cites a 2007 estimate by the Heritage Foundation, a conservative think tank that argued strongly against the legislation. But that figure -- which would be spread over many decades -- is based on questionable assumptions, and other experts have criticized it as inflated. It's contradicted by estimates from a more neutral source -- the nonpartisan Congressional Budget Office.

Even Heritage didn't claim great accuracy for the figure. “This is a rough estimate,” the report conceded. “More research should be performed.” [FactCheck.org, 7/28/10]

Holtz-Eakin: “The Basic Design” Of Heritage's Study “Does Not Shed Light On Immigration Reform.” In a Senate Judiciary hearing on immigration reform, Douglas Holtz-Eakin, the head of the Congressional Budget Office under President George W. Bush, criticized the 2007 report, saying “the basic design does not shed light on immigration reform” and noting that the bill only focuses on low-skill workers:

HOLTZ-EAKIN: I will resist temptation to turn this into a graduate seminar, but I think the top line is I have reservations on the study [...] it leaves out things that I think our most important, the dynamic effects in my testimony and the study I did. Heritage has the capability of doing that analysis, and I would hope they would bring something like that out if the opportunity arose. The second thing I worry about in that study is the basic design does not shed light on immigration reform. There is nothing about that study that says what happens as a result of passing legislation, so it does not inform decisions that Congress might face, and I would like to see studies designed before and after reform.

The last, and I will not the belabor it, the comparisons and that study are between very low-skill immigrants and all of Americans, including by implication Bill Gates, myself, you, whoever. I think that's not a very meaningful comparison. And you can anticipate they outcome of that comparison without doing any kind of detailed analysis. You know the answer by the way the study's constructed. [Senate Judiciary Hearing,4/19/13 via Think Progress]