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Archive for the ‘The Heritage Foundation’ Category

The current immigration legislation debacle has hit a snag. A small victory has been achieved–postponement of a vote–largely due to riled American citizens calling and writing their congressmen and senators with indignant outrage focused on the measure itself and just about every member of the house and the senate whether they approve of the legislation or not. The legal, tax-paying individuals and families of the United States are justifiably vexed to say the least, and we are taking no prisoners with our elected officials–those who work for us–by threatening their future electability should they support such a flamboyant mockery of the legislative process embodied in the current immigration reform bill that would end up costing Americans massive amounts of their own money were it to fast-track its way through the senate as McCain, Kennedy, and Bush had hoped (to avert inevitable debate and eventual failure.)

But just how much would this legislation end up costing taxpayers? Millions? Billions? Try almost two and a half trillion dollars. This is money American citizens pay into the government in order to receive benefits in the form of social security, Medicare, unemployment, public education (the largest expenditure for state and local governments), general welfare, and much, much more. Now the senate wants to pass a law that would forgive and reward 15 to 20 million illegal aliens, allowing them instant access to legally obtaining the above benefits, without having paid into those programs during their years and decades living in the United States criminally. They have paid nothing in, but they will instantly have access to those benefits should the amnesty move forward and become law.

Welfare expert, Robert E. Rector from The Heritage Foundation has written an exhaustively thorough piece concerning this very issue. The recently concluded study, The Fiscal Cost of Low-Skill Immigrants to the U.S. Taxpayer (below in part), provides some startling statistics.

“On average, low-skill immigrant households re­ceived $30,160 per household in immediate govern­ment benefits and services in FY 2004, including direct benefits, means-tested benefits, education, and popula­tion-based services. By contrast, low-skill immigrant households paid only $10,573 in taxes. Thus, low-skill immigrant households received nearly three dollars in benefits and services for each dollar in taxes paid.” [emphasis added]

Now multiply that by millions upon millions of illegal aliens. While I don’t find this finding surprising, three dollars in benefits for every one dollar paid into the system (assuming illegals are actually paying taxes as most of them are likely not, making this even worse) should be a distressing revelation to those who are detrimentally on the fence with this issue, but it should also exist as a pre-apocalyptic kicker to the open borders lobby. If their desire is to seek the ruin of the United States by importing the world’s poverty, then it seems clear the immigration legislation currently under debate would be the way to do it.

Still, the delay of a vote on the legislation postponed until after Memorial day is a win for America, and can doubtlessly be attributed to all of the legal citizens who called in and voiced their displeasure over this travesty of ‘law.’ This does not mean we can rest. It simply means we have more time to keep calling and more time to keep pestering our elected officials–more time to bully them into killing this immigration reform perversion.

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May 22, 2007

The Fiscal Cost of Low-Skill Immigrants to the U.S. Taxpayer

by Robert E. Rector and Christine Kim

Special Report #14

 

 

Each year, families and individuals pay taxes to the government and receive back a wide variety of services and benefits. A fiscal deficit occurs when the benefits and services received by one group exceed the taxes paid. When such a deficit occurs, other groups must pay for the services and benefits of the group in deficit. Each year, govern­ment is involved in a large-scale transfer of resources between different social groups.

Fiscal distribution analysis measures the distribution of total government benefits and taxes in society. It pro­vides an assessment of the magnitude of government transfers between groups. This paper provides a fiscal distri­bution analysis of households headed by immigrants without a high school diploma. It measures the total benefits and services received by this group and the total taxes paid. The difference between benefits received and taxes paid represents the total resources transferred by government on behalf of this group from the rest of society.

The first step in an analysis of the distribution of benefits and taxes is to count accurately the cost of all benefits and services provided by the government. The size and cost of government is far larger than many people imagine. In fiscal year (FY) 2004, the expenditures of the federal government were $2.3 trillion. In the same year, expendi­tures of state and local governments were $1.45 trillion. The combined value of federal, state, and local expenditures in FY 2004 was $3.75 trillion.[1]

The sum of $3.75 trillion is so large that it is difficult to comprehend. One way to grasp the size of government more readily is to calculate average expenditures per household. In 2004, there were some 115 million households in the U.S.[2] (This figure includes multi-person families and single persons living alone.) The average cost of govern­ment spending thus amounted to $32,707 per household across the U.S. population.[3]

The $3.75 trillion in government expenditure is not free, but must be paid for by taxing or borrowing economic resources from Americans or by borrowing from abroad. In general, government expenditures are funded by taxes and fees. In FY 2004, federal taxes amounted to $1.82 trillion. State and local taxes and related revenues amounted to $1.6 trillion.[4] Together, federal, state, and local taxes amounted to $3.43 trillion. At $3.43 trillion, taxes and related revenues came to 91 percent of the $3.75 trillion in expenditures. The gap between taxes and spending was financed by government borrowing.

Types of Government Expenditure

After the full cost of government benefits and services has been determined, the next step in the analysis of the distribution of benefits and taxes is to determine the beneficiaries of specific government programs. Some programs, such as Social Security, neatly parcel out benefits to specific individuals. With programs such as these, it is relatively easy to determine the identity of the beneficiary and the cost of the benefit provided. At the opposite extreme, other government programs (for example, medical research at the National Institutes of Health) do not neatly parcel out benefits to individuals. Determining the proper allocation of the benefits of that type of program is more difficult.

To ascertain most accurately the distribution of government benefits and services, this study begins by divid­ing government expenditures into six categories: direct benefits, means-tested benefits, educational services, pop­ulation-based services, interest and other financial obligations resulting from prior government activity, and pure public goods.

Direct Benefits

Direct benefit programs involve either cash transfers or the purchase of specific services for an individual. Unlike means-tested programs (described below), direct benefit programs are not limited to low-income persons. By far the largest direct benefit programs are Social Security and Medicare. Other substantial direct benefit programs are Unemployment Insurance and Workmen’s Compensation.

Direct benefit programs involve a fairly transparent transfer of economic resources. The benefits are parceled out discretely to individuals in the population; both the recipient and the cost of the benefit are relatively easy to deter­mine. In the case of Social Security, the cost of the benefit would equal the value of the Social Security check plus the administrative costs involved in delivering the benefit.

Calculating the cost of Medicare services is more complex. Ordinarily, government does not seek to compute the particular medical services received by an individual. Instead, government counts the cost of Medicare for an individual as equal to the average per capita cost of Medicare services. (This number equals the total cost of Medicare services divided by the total number of recipients.)[5] Overall, government spent $840 billion on direct benefits in FY 2004.

Means-Tested Benefits

Means-tested programs are typically termed welfare programs. Unlike direct benefits, means-tested programs are available only to households below specific income thresholds. Means-tested welfare programs provide cash, food, housing, medical care, and social services to poor and low-income persons.

The federal government operates over 60 means-tested aid programs.[6] The largest of these are Medicaid; the Earned Income Tax Credit (EITC); food stamps; Supplemental Security Income (SSI); Section 8 housing; public housing; Temporary Assistance to Needy Families (TANF); the school lunch and breakfast programs; the WIC (Women, Infants, and Children) nutrition program; and the Social Services Block Grant (SSBG). Many means-tested programs, such as SSI and the EITC, provide cash to recipients. Others, such as public housing or SSBG, pay for ser­vices that are provided to recipients.

The value of Medicaid benefits is usually counted in a manner similar to Medicare benefits. Government does not attempt to itemize the specific medical services given to an individual; instead, it computes an average per capita cost of services to individuals in different beneficiary categories such as children, elderly persons, and disabled adults. (The average per capita cost for a particular group is determined by dividing the total expenditures on the group by the total number of beneficiaries in the group.) Overall, the U.S. spent $564 billion on means-tested aid in FY 2004.[7]

Public Education

Government provides primary, secondary, post-secondary, and vocational education to individuals. In most cases, the government pays directly for the cost of educational services provided. In other cases, such as the Pell Grant program, the government in effect provides money to an eligible individual who then spends it on educational services.

Education is the single largest component of state and local government spending, absorbing roughly a third of all state and local expenditures. The average per pupil cost of public primary and secondary education is now around $9,600 per year. Overall, federal, state, and local governments spent $590 billion on education in FY 2004.

Population-Based Services

Whereas direct benefits, means-tested benefits, and education services provide discrete benefits and services to particular individuals, population-based programs generally provide services to a whole group or community. Pop­ulation-based expenditures include police and fire protection, courts, parks, sanitation, and food safety and health inspections. Another important population-based expenditure is transportation, especially roads and highways.

A key feature of population-based expenditures is that such programs generally need to expand as the popula­tion of a community expands. (This quality separates them from pure public goods, described below.) For example, as the population of a community increases, the number of police and firemen will generally need to expand in pro­portion.

In its study of the fiscal costs of immigration, The New Americans, the National Academy of Sciences argued that if service remains fixed while the population increases, a program will become “congested,” and the quality of service for users will deteriorate. Thus, the NAS uses the term “congestible goods” to describe population-based services.[8] High­ways are an obvious example of this point. In general, the cost of population-based services can be allocated according to an individual’s estimated utilization of the service or at a flat per capita cost across the relevant population.

A sub-category of population-based services is government administrative support functions such as tax collec­tions and legislative activities. Few taxpayers view tax collection as a government benefit; therefore, assigning the cost of this “benefit” appears problematic.

The solution to this dilemma is to conceptualize government activities into two categories: primary functions and secondary functions. Primary functions provide benefits directly to the public; they include direct and means-tested benefits, education, ordinary population-based services such as police and parks and public goods. By con­trast, secondary or support functions do not provide direct benefits to the public but do provide necessary support services that enable the government to perform primary functions. For example, no one can receive food stamp ben­efits unless the government first collects taxes to fund the program. Secondary functions can thus be considered an inherent part of the “cost of production” of primary functions, and the benefits of secondary support functions can be allocated among the population in proportion to the allocation of benefits from government primary functions.

Government spent $662 billion on population-based services in FY 2004. Of this amount, some $546 billion went for ordinary services such as police and parks, and $116 billion went for administrative support functions.

MORE…

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 Senate Puts Off Action on Immigration

May 22, 4:27 AM (ET)
By JULIE HIRSCHFELD DAVIS

WASHINGTON (AP) – Senate leaders agreed Monday that they would wait until June to take final action on a bipartisan plan to give millions of unlawful immigrants legal status.

The measure, which also tightens border security and workplace enforcement measures, unites a group of influential liberals, centrists and conservatives and has White House backing, but it has drawn criticism from across the political spectrum. In a nod to that opposition, Senate leaders won’t seek to complete it before a hoped-for Memorial Day deadline.

“It would be to the best interests of the Senate … that we not try to finish this bill this week,” said Senate Majority Leader Harry Reid, D-Nev., as the chamber began debate on the volatile issue. “I think we could, but I’m afraid the conclusion wouldn’t be anything that anyone wanted.”

The bipartisan compromise cleared its first hurdle Monday with a bipartisan Senate vote to begin debate on a separate immigration measure. Still, it faces significant obstacles as lawmakers seek dozens of modifications to its key elements.

(AP) Sen. Jim Bunning, R-Ky., center, accompanied by Sen. Jeff Session, R-Ala., left, and Rep. Brian…
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Republicans want to make the bill tougher on the nation’s estimated 12 million illegal immigrants. Democrats want to change a new temporary worker program and reorder priorities in a merit-based system for future immigration that weights employability over family ties.

The unlikely coalition that brokered the deal, led by Sens. Edward M. Kennedy, D-Mass., and Jon Kyl, R-Ariz., is plotting to protect the agreement from “deal-breaker” changes that would sap its support. The group will hold daily meetings starting Tuesday to determine whether proposed revisions would sink what they are calling their “grand bargain.”

“We have to try our very best to work together to get something that will actually pass,” Kyl said.

Among the first changes to be debated will be a proposal by Sen. Jeff Bingaman, D-N.M., to shrink the temporary worker program created by the compromise plan. Some lawmakers in both parties consider the initiative, which would provide at least 400,000 guest worker visas annually, too large.

Others charge it’s impractical and unfair to immigrants, because it would allow them to stay only temporarily in the U.S. without guaranteeing them a chance to gain legal status.

“We must not create a law that guarantees a permanent underclass, people who are here to work in low-wage, low-skilled jobs but do not have the chance to put down roots or benefit from the opportunities of American citizenship,” Reid said.

Reid called the measure a “starting point,” but said he had reservations about it.

Conservative critics denounced the proposal’s quick granting of legal status to millions of unlawful immigrants.

Sen. Jeff Sessions, R-Ala., said the measure’s so-called “point system” doesn’t do enough to guarantee that future immigration will serve the country’s economic needs.

“I’m nervous about this thing,” said Sessions, who voted not to go forward with the debate. He called the point scheme “bait” to get conservatives to embrace the measure, and accused Republicans of compromising too much on an outline drafted by the White House in late March to attract GOP support.

“I’m disappointed – almost heartbroken – because we made some progress toward getting to this new framework, but the political wheeling and dealing and compromising and splitting the baby has resulted in a circumstance that, you know, we just didn’t get far enough,” Sessions said.

Sen. Kay Bailey Hutchison, R-Texas, who also opposed opening debate, announced she would seek to alter the bill to mandate that illegal immigrants go back to their home countries before gaining legal status.

Under the proposal, that requirement only applies to heads of households seeking green cards and a path to citizenship. Others here unlawfully could obtain visas to live and work in the U.S. indefinitely without returning home.

Kennedy, called the plan “strong, realistic and fair.”

“For each of us who crafted it, there are elements that we strongly support and elements we believe could be improved. No one believes this is a perfect bill,” Kennedy said.

The White House has begun an active lobbying effort to drum up support for the measure, especially among Republicans who voted against an immigration overhaul last year.

President Bush is still hoping to sign the bill by summer’s end, said Tony Fratto, a White House spokesman.

“This is a very high priority for the president,” Fratto told reporters in Crawford, Texas. “We know that this is an emotional issue for members on both sides of political parties and both sides of the ideological spectrum, but we hope that we can find common ground.”

Conservatives in the House, whose opposition helped kill an immigration overhaul last year, began laying down markers in anticipation of their own debate, expected only if the Senate completes its measure.

Rep. Dan Lungren, R-Calif., unveiled legislation he said was “an alternative to several of the large holes in the so-called Senate compromise.”

It would send home illegal immigrants who had been in the U.S. for fewer than five years and bar them from gaining lawful status.

Those in the country five years or more would be able to get a “blue card” to live and work legally in the U.S. after paying a $1,000 fine and learning English and American civics, but they could not bring their families. Blue card holders would have to leave the country to apply for legal residency.

In contrast, the bipartisan Senate compromise would allow illegal immigrants in the country by the beginning of this year to adjust their status.

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