If Americans learned anything from the debate over Obamacare, it is that Washington politicians are quite adept at manipulating legislation to obscure a bill's true cost. When Obamacare was passed by the House in March 2010, the Congressional Budget Office famously estimated the bill would only cost $940 billion over 10 years. Then in 2012, just two years after Obamacare was signed into law by President Obama, CBO recalculated the program's costs and raised its projection to $1.76 trillion over a decade, almost double the original price tag.
To avoid a repeat of that scenario, the Heritage Foundation yesterday released its independent cost estimate of the amnesty portion of the Schumer-Rubio immigration reform bill scheduled for a vote Thursday in the Senate Judiciary Committee. According to Heritage's analysis, granting amnesty to the 11.5 million illegal immigrants currently thought to be in the United States would generate $3.1 trillion in higher tax revenues over the course of their lifetimes. But they would also receive $9.4 trillion government benefits and services, leaving American taxpayers on the hook for $6.3 trillion.
The core of Heritage's analysis stems from an uncomfortable fact about the modern American welfare state: Many households get more in government services and benefits than they pay in taxes. Education is the key determinant. Households led by a college graduate, for example, pay on average $54,089 a year in taxes while receiving $24,839 in benefits, providing a surplus to the government of $29,250.
But households led by a high school graduate only pay $19,344 in taxes, while getting $34,159 in benefits. Households led by someone without a high school diploma contribute just $11,469 in taxes and receive $46,582 in benefits, for a $35,113 net loss for every such household. Unfortunately, the vast majority of illegal immigrants live in households with limited education; 75 percent possess a high school degree or less, and only 10 percent are headed by college graduates. That means the vast majority of immigrants granted amnesty likely will be a net drain on taxpayers.
Heritage estimates that the amnesty portions of the Schumer-Rubio bill would cost all levels of government about $44 billion a year for the first 13 years. But then, after these immigrants were granted full access to the modern American welfare state, that number would balloon to $106 billion a year. It gets worse after that. When these amnestied immigrants later retire, their annual costs rise again to about $160 billion a year.
There is nearly unanimous agreement that the current immigration system desperately needs reform. Robert Rector, who co-authored the report with Heritage's Jason Richwine, agrees with reform advocates that the economy would benefit if more highly-skilled immigrants were allowed to come to the country faster. But, he also explained, "the amnesty bill takes a really bad broken system and makes it much more expensive and much worse from the taxpayers perspective." Rector has his critics, but Americans cannot afford simply to dismiss his numbers.