The Facts on the Costs of Immigration Reform


The Heritage Foundation, a conservative think tank which has a history of distorting the economic benefits of immigration reform, released a new report on Monday claiming that reform as it is laid out in the Senate proposal would have a net cost to taxpayers of some $6.3 trillion.

Under the report, which is an update of a similar 2007 study, Heritage says that the costs come from $9.4 trillion in government benefits to newly legalized immigrants over their lifetimes, which would only be partially offset by the $3.1 trillion in taxes they would pay.

However, the study is inherently flawed. It uses unsound methodology, contradicts previous Heritage reports, and has been resoundingly discredited by economists – including those within the Republican party, like the conservative Americans for Tax Reform, headed by Grover Norquist.

“Robert Rector’s work does not speak for the conservative movement; in fact, it does not even speak for the Heritage Foundation,” wrote Norquist in a letter to House and Senate immigration staff in April. Rector is the co-author of the Heritage Foundation report.

Pro-reform Republicans and conservatives have overwhelmingly downplayed the validity of the report, accusing the study of throwing together all the possible costs while at the same time ignoring the economic growth that would be created by immigration reform. Back in 2007, the group’s report erroneously included even the U.S. citizen spouses and children as those who would create new taxpayer costs under immigration reform.

Alex Nowrasteh of the Cato Institute said:

The new Heritage study makes “the same fundamental errors that their previous study did: They do not consider that increased legal immigration will increase the size of the U.S. economy and thus increase tax revenues – contrary to an overwhelming contrary consensus in the economics literature.

Not only does the Heritage Foundation report contradict the findings of bipartisan economists and researchers, it also contradicts the organization’s own studies.

According to a 2006 Heritage Foundation report:

The argument that immigrants harm the American economy should be dismissed out of hand.

Whether low-skilled or high-skilled, immigrants boost national output, enhance specialization, and provide a net economic benefit.

Considered by many to be the most glaring problem, the report uses a “static” scoring system, rather than “dynamic.” In other words, the report doesn’t take into account that legalizing 11 million undocumented immigrants would affect the rest of the economy, including increasing tax revenue substantially.

Republican Senator Jeff Flake of Arizona, a member of the “Gang of Eight” which drafted the immigration plan, said on Twitter:

Here we go again. New Heritage study claims huge cost for Immigration Reform. Ignores economic benefits. No dynamic scoring.

In a statement, Republican Rep. Paul Ryan said:

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.

The conservative Heritage Foundation is headed by former South Carolina senator Jim DeMint. He resigned as senator earlier this year to take the helm at the organization, a known anti-immigration group. The last time immigration reform was on the table in 2007, a similar Heritage report was able to derail the bill.

Last time, the report held enough credibility amongst conservatives to stop reform from happening. This time however, the report has been dismissed by those on the left as well as the right as fatally flawed at best.