J.P. Morgan reportedly told a prospective customer that if you have to ask how much something costs, you can’t afford it. That sort of logic is acceptable for robber barons, but falls short when offered up by our elected leaders. In the debate over immigration, we need them to find out how much their policies will cost.

Recently, the Senate considered a massive immigration reform bill, S. 1348, the Secure Borders, Economic Opportunity and Immigration Reform Act of 2007. Although senators appeared to have killed this legislation in late June, we have not seen the last of such proposals. This bill could have granted amnesty to nearly all illegal immigrants in the United States. We should beware of such plans in the future. Clearly, such an action would greatly increase long-term costs to the taxpayer by offering immigrants access to means-tested welfare programs such as Social Security and Medicare. Fiscal costs would rise in the intermediate term—and increase dramatically when amnesty recipients reach retirement. Although it is difficult to provide a precise estimate, it seems likely that if 10 million adult illegal immigrants currently in the U.S. were granted amnesty, the net retirement cost to the government (benefits minus taxes) could exceed $2.6 trillion.

(Art by Matt Mahurin.)

This is a much starker forecast than the $23 billion cost estimates of S. 1348 provided by the Congressional Budget Office (CBO). However, CBO estimated only the changes in benefits and revenues that would occur in the first 10 years. Since relatively few illegal immigrants are currently elderly, virtually none receive Social Security and Medicare. A major result of the bill would be to make illegal immigrants eligible for Medicare, Medicaid and Social Security. CBO does not address these retirement costs at all.

Furthermore, the Senate’s immigration reform bill would have offered amnesty and a path to citizenship to the 12 million–plus illegal immigrants currently in the United States. Its lax evidentiary standards would have encouraged millions more to apply for amnesty fraudulently. Because there was no limit on the number of amnesties that could be granted, the actual number who could have received amnesty might have been far higher.

Let’s also keep in mind that any illegal immigrant who becomes legal would be eligible for medical care benefits under the Medicaid Disproportionate Share Program. More children will be eligible to attend public schools and receive Head Start and day care assistance. Many state and local governments may also provide further benefits and services.

Busted Budgets
Beyond the $2.6 trillion price tag for retirement benefits, there are other budgetary costs left unacknowledged—most resulting from the educational backgrounds. Illegal immigrants generally have very low education levels: 61 percent of illegal immigrant adults lack a high school diploma; 25 percent have only a high school diploma; 5 percent have attended some college; and 9 percent are college graduates, according to estimates by the Center for Immigration Studies. The Pew Hispanic Center estimates slightly higher education levels for illegals: 49 percent without a high school diploma; 25 percent with a high school diploma; 10 percent with some college; and 15 percent with a college degree. Overall, 49 to 61 percent of adult illegal aliens lack a high school diploma, compared to roughly 10 percent of native-born adults.

Because of their low education levels, illegal immigrants have a poverty rate that is roughly twice that of native-born Americans. The poverty rate of children in illegal immigrant families is 37 percent, compared to 17 percent among children in nonimmigrant families. The poverty rate among adult illegal immigrants is 27 percent, compared to 13 percent among nonimmigrant adults.