Bad news for the conservative Heritage Foundation: Nobody believes its study forecasting that granting citizenship to 11.5 million unauthorized US residents will cost taxpayers $6.3 trillion—yes, with a “t.”
The skepticism is not just among progressives who typically disbelieve the Heritage foundation, but also Rep. Paul Ryan, the voice of Republican fiscal policy, and Douglas Holtz-Eakin, the conservative economist and President of the American Action Forum. Before we get to the politics, let’s look at why Heritage predicts that expanding US citizenship by just 4% would cost the United States nearly half the country’s annual wealth
Debunking break: The study assumes that any benefits accrued to new citizens will disappear forever, instead of being spent on police, firemen, doctors, grocery stores, and other businesses. It assumes that, absent reform, unauthorized immigrants will just leave when they turn 55, for some reason. The study doesn’t count the economic benefits of reform—new workers getting better-paying jobs, for instance—which the Congressional Budget Office (CBO) found would increase economic growth by as much as 1.3% of GDP when a similar bill was contemplated in 2007. Ultimately, it reads as a chilling verdict on the failure of America’s economy to offer low-skilled workers a real future.
The general consensus in past estimates is that reforms like the package under discussion would be a small fiscal benefit. So what is this fight really about? Two things:
1. On the right, immigration reform is a “wedge issue.” The business lobby in the US, traditionally aligned with the Republican party’s interest in cutting back on government rules, is very much in favor of comprehensive immigration reform that would bring more foreign workers to the United States. Cultural conservatives, also aligned with the Republican party, are a very much not interested in bringing more foreigners to the country.
That division is reflected in Republican policy shops: Holtz-Eakin’s AAF produced this immigration-friendly analysis, the American Enterprise Institute seem to be open-minded skeptics, and Heritage is clearly staking out its place as a critic. While forward-thinking conservatives like Senator Marco Rubio are finding ways to reconcile their principles with the reality of a more diverse and immigrant-friendly United States, there’s still plenty of tension between “forward-thinking” and “conservative” on the American right.
2. Conservatives would love to get more people on board with “dynamic scoring.” That is when the wonks who forecast the cost of new laws take into account the ways they change the economy, and it’s one reason that we expect immigration reform to be beneficial. Heritage didn’t use it in their study, despite their long-standing position in favor of the method—one sign that the study wasn’t on the up-and-up. Conservatives generally favor dynamic scoring because it helps make tax cuts seem less expensive by accounting for an expected increase in business activity. While progressives may note that official forecasts of tax cuts already include behavioral responses, conservatives want to use any opportunity, including this one, make sure their preferred approach becomes standard.