CBO: Young illegal immigrants have expensive dreams

immigrants

 By: Jason Richwine | Center for Immigration Studies

For most Americans, a Friday afternoon in mid-December is a time when work is winding down and holiday plans begin to take center stage. It also seems to be a time, coincidentally or not, for the government to publish reports that run counter to prevailing media narratives. Keeping with tradition, the CBO reported on Friday that the DREAM Act, which would provide amnesty to up to three million illegal immigrants who arrived before the age of 18, would generate a net cost of $26 billion over the next 10 years. Because advocates claim that virtually any loosening of immigration restrictions will benefit taxpayers — even refugees, despite their low earnings and high welfare consumption, are said to be fiscal boons — and because the media have been eager to run with that narrative, the CBO’s estimate may come as a surprise.

In truth, however, it’s hard to see how the analysis could have come out the other way. Young illegal immigrants — some of whom already have work permits, due to the Obama Administration’s DACA program — currently pay most taxes, but cannot receive most federal benefits. Legalization is therefore bound to be costly. Furthermore, as a generally lower-skill population, DREAM Act beneficiaries will use more government services than average. The CBO estimates that the DREAM Act would generate about $1 billion of extra tax revenue from ending “off-the-books” labor, but that gain is swamped by $27 billion in new spending on benefits. The most expensive benefit enjoyed by Dream Act recipients would be Obamacare subsidies ($12 billion), followed by the earned income and child tax credits ($5.5 billion), Medicaid ($5 billion), and food stamps ($2 billion).

In contrast to its findings here, the CBO famously estimated in 2013 that the proposed Schumer-Rubio amnesty would have a positive fiscal impact. Since Schumer-Rubio was a larger version of the DREAM Act, why does the same common-sense analysis — tax receipts stay roughly the same, service costs go up — not apply in both cases? The reasons are complex, but two thoughts come immediately to mind. First, the Schumer-Rubio amnesty required a long provisional period that pushed immigrant eligibility for most benefits beyond the CBO’s 10-year budget window. The DREAM Act, by contrast, does not appear to impose an added waiting time. Beneficiaries could immediately receive Obamacare, then receive Medicaid and other services after the normal five-year period for legal immigrants.

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