Fire Sale On American Citizenship
FORECASTS & TRENDS E-LETTER
IN THIS ISSUE:
1. America’s Immigration Crisis
2. Past Efforts To Fix Immigration
3. The New Immigration Bill
4. Why The New Bill Will be Another Disaster
5. The Enormous Cost Of It All
6. The Last Straw For Bush
7. Conclusions – This Is Bad Law
You are no doubt aware by now that the Senate is proposing a sweeping new immigration bill that has the potential to grant amnesty to the estimated 12 to 20 million illegal, undocumented aliens who presently live and work in the US. The proposed new immigration bill is fraught with problems, especially for conservatives who oppose amnesty for those who broke the law to enter this country, and even some liberals and Hispanic groups are opposed to it.
Leaders of the Democratic Party are pushing the new immigration bill along as they see an opportunity to grab a huge new constituency, as it is widely believed that most of the 12-20 million illegal aliens who eventually vote would vote for the Democrats. It is a safe bet to assume that these new citizens will be anxious to cast their votes as soon as possible. So, the Democrats are pushing the new immigration bill, despite its consequences.
Some Republicans, including Senator John McCain, have also come out in favor of this new immigration bill. Supposedly, the new bill would provide for greater border security and halt the flood of undocumented workers coming across our borders. But these provisions would take years to enact, if in fact they are ever really implemented. Never mind the enormous cost that will be required to implement them.
Those who support the new immigration bill apparently believe that most of the illegal aliens now in the US would return to their home countries, as is supposedly required, file the necessary immigration paperwork and pay fines and fees ranging from $3,000 to $5,000. But how many of the 12-20 million illegals, who are working here today, whose children are attending public schools, will really go home and/or pay the fine? Far less than half, I would estimate.
In the pages that follow, I will discuss the new immigration bill in some detail and point out why I hope this new legislation does not pass. If the new bill does pass the Senate, which is questionable, it then goes to the House where it is estimated that President Bush will have to garner at least 70 Republican votes for it to pass. That is a tall order, but stranger things have happened.
America’s Immigration Crisis
We all know that America has a horrific illegal immigration problem, perhaps the worst in the world. Between 12 and 20 million undocumented workers currently reside in the US. Every year, hundreds of thousands more enter the US illegally, many from Mexico, to seek greater economic and educational opportunity, and I for one do not blame them for wanting to come to America. After all, for many America is the “shining city on a hill.” We are a country of immigrants, a great melting pot.
The plaque on the Statue of Liberty reminds us “Give me your tired, your poor, your huddled masses…” Legal immigration is not our problem; rather, it is indeed one of our strengths. It is massive and overwhelming ILLEGAL immigration that is our problem – a crisis actually. It is a problem that will eventually wreck the social welfare system and likely cripple the US economy. Something must be done. But what?
The truth is, there is no easy solution. I do agree with those who say it would be virtually impossible to round up and deport 12-20 million illegals, not to mention the economic impacts of such an effort. So, I don’t claim to have the answer. What I do know is that everything we have tried in the recent past to solve the illegal immigration problem has not worked, and that the current proposed legislation will be as ineffective and harmful as prior attempts, if not more so.
Past Efforts To Fix Immigration
The best-known recent effort to “fix” immigration was the 1986 amnesty instituted by President Reagan. Many of the same arguments were made then as now. At the time, there were an estimated four to five million undocumented workers in the US. Then, as now, we were told that it would be next to impossible to round them all up and deport them. Looking back on it, maybe we should have done just that.
So in 1986, Reagan declared amnesty for these undocumented workers, pardoned them for having committed a crime, and set them on the path toward legal, tax paying citizenship. Many conservatives were outraged, as was I. President Reagan justified his action by arguing that it was better to get these undocumented workers identified and have them start paying into the system. Sound familiar?
Reagan also promised that the amnesty would be accompanied by greatly increased security at our borders and predicted that the vast majority of future immigrants would be legal. Nice idea, in theory, but in reality it was a disaster!
When it became known that the president was declaring amnesty, a tidal wave of undocumented workers flooded the US. And why not? This was far easier than going through the standard legal channels (which is part of the problem). What increase in border security there was as a result, was both too little and too late.
Given that the undocumented workers currently in the US are estimated to be 12-20 million, amnesty clearly does not work as I will discuss below. To his credit, President Reagan at least had the courage to call it what it was – amnesty - as opposed to the political sham of the current immigration proposal.
The New Immigration Bill
In an effort to be as unbiased as possible about this new immigration bill, here are excerpts of the highlights as published by the New York Times on May 22:
QUOTE: The compromise bill that emerged last Thursday from weeks of closed-door discussions among Senate leaders [with Senator Kennedy as the chief author] and two cabinet secretaries — Homeland Security Secretary Michael Chertoff and Commerce Secretary Carlos Gutierrez — was more than 300 pages long.
It is an ambitious package made up of interlocking components intended to work together to create a new immigration system that will secure the nation’s borders, provide a path to legal status for an estimated 12 million illegal immigrants, halt illegal immigration in the future, reduce backlogs for immigrants who have waited to settle in the United States legally, and offer a temporary work force of skilled and unskilled workers for employers in the future.
Following is a breakdown of what the bill does, and where critics have said it falls short:
BORDER SECURITY AND TRIGGERS. The bill would greatly toughen border enforcement, eventually doubling the Border Patrol to 28,000 agents. Several border enforcement measures, known as triggers, must be in place before a temporary worker program can begin, and before illegal immigrants can gain their first legal visas. The triggers include installation of at least 370 miles of border fence and 200 miles of vehicle barriers.
For another trigger, the Department of Homeland Security must create a new, fraudproof system to verify the legal status of all job applicants. Penalties for employers who hire illegal immigrants would be greatly increased, to $5,000 for a first offense and up to $75,000 and even jail for repeat offenses. Department officials estimated it would take 18 months to put the triggers in place. The criticism: Border enforcement is not especially controversial. But employers say it is not realistic to expect that the new employee verification system will be ready in 18 months.
LEGALIZING IMMIGRANTS. The bill proposes a new kind of visa, a Z visa, for immigrants who were in the United States before Jan. 1, 2007, without legal papers. In a first stage, to begin six months after the bill became law, illegal immigrants would come forward to register with the Department of Homeland Security. Registration would be confidential, department officials said, and would be open for a one-year period. Once registered, immigrants would be on probation — they could work legally but would not be able to travel freely outside the United States.
In a second stage, after the triggers were in place, former illegal immigrants could complete their applications for Z visas, paying penalties. A family of four immigrants, for example, would have to pay fines and fees of at least $4,500. Administration officials said these could be paid in installments.
Illegal immigrants’ immediate family members who are already in the United States would qualify for Z visas, but they could not bring any family members from home. They can travel outside the United States and, after paying a $1,500 fee, renew the Z visa once every four years.
After eight years, once the backlog of legal immigrant petitions is cleared, Z visa holders could apply to become legal permanent residents. They would have to show that they spoke English and pay an additional $4,000 fine. They would also have to return to their home countries to file the application for permanent status, but would not have to remain there while it was in process. It would take at least 13 years for a former illegal immigrant to become a United States citizen.
The criticism: Many Republicans reject this program as an amnesty that rewards immigrants who broke the law. Grass-roots immigrant groups and lawyers who support granting legal status have assailed the fines as too high for working families. The bill’s authors argue that the cost is less than what immigrants are now paying smugglers, or coyotes, to bring them across the border.
The requirement that applicants for permanent residence return home first is an unfair hardship for people from distant countries like China and the Philippines, said Marshall Fitz, director of advocacy at the American Immigration Lawyers Association.
TEMPORARY WORKER PROGRAM. After the triggers were in place, the bill proposes, there would be a vastly expanded program offering at least 400,000 visas a year for immigrants outside the country who want to come here temporarily to work. In a shift from recent decades, the program would include large numbers of nonagricultural workers, including meatpackers, landscapers and construction workers and those in other low-wage but high-demand occupations. Employers would have to show that they tried to recruit American workers before they could hire temporary immigrants, and they would have to pay the same wages they would pay Americans.
Immigrants could change jobs, but only to another employer certified to participate in the program. They could come for three stints of two years each, but would have to leave the United States for a year between each stint. They would also have to pay for health insurance for any family members they brought. They would not be allowed to apply to become permanent residents through the program, but a good temporary employment record would help them if they wanted to apply through a separate merit program.
The criticism: Employers say this plan fails to meet their needs for high-skilled workers, and places too much control in the hands of government bureaucrats. Democrats and union officials say it will create a vulnerable underclass of workers.
FAMILY AND MERIT-BASED VISAS. The bill designates as many as 440,000 visas a year to reduce the backlog of 4 million foreigners with family ties to the United States who have been waiting in the bureaucratic pipeline as long as 22 years, with the goal of eliminating the backlog in 8 years.
It sets up a new point system that would be applied to a growing proportion of future immigrants. Points would be earned for job skills, education, English proficiency and employment history. In the first years, as much as 80 percent of immigration would still be based on family ties. After the backlog is cleared, merit-based immigration would gain importance.
The criticism: Legal immigrants say the backlog reduction is too slow and discriminates against those who are trying to bring immediate family members from overseas. Immigration advocacy groups and the Roman Catholic Church say the merit system undermines the traditional family basis of the system in favor of highly-skilled workers. END QUOTE.
Why The New Bill Will be Another Disaster
As we would expect, the New York Times paints a fairly benign picture of this sweeping new immigration bill, veiled with a few carefully worded criticisms. I would argue, however, that there is virtually NOTHING positive to say regarding the new legislation. Furthermore, that it is a shameless electioneering scheme designed to cater to a specific demographic group that comprises an increasingly significant portion of the electorate in key states. And even some of those groups are coming out against it.
This is one of those situations where the more you learn about something, the worse it gets. In my research of this legislation, I found that no one has a better read on the true impact of this new immigration bill than two Heritage Foundation (www.heritage.org) contributors, Robert Rechtor and Kris Kobach. I will quote from their excellent works and link them at the end of the E-Letter so you can read them in their entirety. Rechtor’s paper in particular is quite lengthy and detailed.
Despite what you may have heard, this new legislation is amnesty with far greater consequences than the amnesty in 1986. The creation of the ‘Z’ visa by Title VI of the bill ensures this. Kris Kobach has this to say:
Question: With no limitation on the number of people who can receive a Z-visa, how is this not amnesty? The answer is that it is clearly amnesty, despite what the politicians and talking heads have had to say. Many of them have said that this legislation requires undocumented workers to “earn” their way in and get them on the path to citizenship. That is not the case. Kobach continues:
This is an insanely broad set of criteria to qualify for this new visa. Can you honestly think of someone that would not fit into one of these categories? As Kobach points out, some of these documents are easily forged. Never mind how many will lie about the date they entered the US. Again, this is a massive amnesty!
As hard as I try, I cannot see this as anything more than the selling of US citizenship and at a bargain basement price. Especially when it is so easy to qualify for one of these new visas. Of course, to obtain the Z-visa, you need to have been in the US as of January 1, 2007. How many undocumented workers will claim to have been here since that deadline? Almost certainly, this undeclared amnesty will result in a flood of new, undocumented immigrants who will also claim to have been here prior to January 1, 2007. The government has no way to know when illegals crossed the border.
In fact, why would anyone bother with the standard legal channels of immigration? Well, they wouldn’t. As Kobach correctly observes:
The supporters of this legislation contend that this Z-visa is in fact a temporary document. Well technically, this is true but they neglect to mention that it can be renewed every four years until the visa holder dies. That seems fairly permanent to me! This visa also allows the holder not only to work, but also to attend college and travel from and return to the US. It is in effect a “super visa” that any alien seeking entry to the US would love to have. Unfortunately, as Kobach writes:
That is utterly insane. Under this proposal there is absolutely no incentive to enter the US legally. Why would you? How can it be that we are actively discouraging legal immigration, which is exactly what this bill would do.
This legislation would also create the “Y” visa. This is the centerpiece of the so-called “guest worker program.” A Y-visa could be issued to at least 400,000 guest workers per year. This would allow them to enter the US for a two-year period and then return home for one year and then re-enter for another two years. Actually, the Y-visa would allow up to six years of work in the US with two re-entries. Through this program, the Y-visa holder can earn points toward green card status.
But again, why would you follow the Y-visa route when you can be rewarded for being here illegally with the Z-visa? The Y-visa seems like a consolation prize for those not lucky enough to get a Z-visa. Of course, this also raises the question of who can apply for these visas. Is there any sort of a screening process, like some way to filter out criminals or TERRORISTS? This is not clear. Here is what Kobach has to say:
Given these provisions, do you think we will be able to filter out all, or even most, of the criminals trying to enter the US? Terrorists? The answer is obviously NO!
The Enormous Cost Of It All
Many of the arguments for this immigration legislation center on bringing undocumented workers “out of the shadows” so that they not only use the social welfare system but also pay into it in the form of taxes. Adding so many new payers to the tax roles would aide in the solvency of Social Security, right?
No. In fact this argument could not be more wrong. Robert Rechtor authored a brilliant paper illustrating this fallacy. While it is far too lengthy to present here, you will find a link to it at the end of this E-Letter, and I heartily encourage you to read it. According to Rechtor there is NO net economic benefit. He writes:
But the numbers get far worse when the cost of retirement in the US is considered. Rechtor continues:
…low-skill immigrants at each age create a net burden on taxpayers. However, the fiscal burden becomes most severe among elderly households, where the net annual fiscal deficit soars to $32,686 per household per year. This amounts to roughly $15,000 per year for each elderly low-skill immigrant.
There are currently 8 million non-elderly adult immigrants in low-skill immigrant households. Assuming normal mortality rates, perhaps 7 million of these individuals will live to age 67. After reaching age 67, the normal life expectancy would be approximately 18 years. With an average net cost of roughly $270,000 over 18 years, the net future retirement costs of the 7 million low-skill immigrants would be around $1.9 trillion. [That’s trillion – emphasis added, GDH.]
And that is based on current numbers, folks. Imagine what the number could swell to if this legislation passes. It could increase by 50% or more! The already staggering costs would become simply ruinous.
What about Social Security? After all, with millions of new taxpayers, surely there is some level of relief for the already strained system? No. Consider that there is a massive imbalance of tax payments to benefits used. Rechtor illustrates this:
If this legislation passes, and with the political climate favoring the Democrats, it looks like we are in for an unyielding era of tax increases.
The Last Straw For Bush
Serious readers of this E-Letter have figured out by now that President Bush had pretty well worn out his welcome with me, even before he came out in full support of this new amnesty bill. Bush is yet again joining forces with Ted Kennedy in praise of this “compromise” immigration legislation. And why not? Bush let Kennedy write the education bill and that all worked out, didn’t it? Not hardly!
Of course, we shouldn’t be surprised. Even when Bush was governor of Texas, he was a big proponent of immigration reform, which if I recall correctly amounted to little more than a blanket amnesty. With conservatives like George Bush, we may as well have Democrats running things. At least then you know what you are getting.
Conclusions – This Is Bad Law
The problem of illegal immigration in the US is massive and needs a solution. I do not pretend to have the answer, but I do know a bad solution when I see one, and the current proposal is just about as bad as it gets. I have no problem with expanding legal immigration, as I believe it to be a strength of this country. But this new immigration bill, crafted by Ted Kennedy, kicks sand in the face of anyone looking to enter this country legally.
Not only is it bad legislation, it will spark a tidal wave of new illegal aliens should it look like it will pass. In Texas, we already have thousands of children from Mexico crossing the border twice a day to attend our public schools (see link below) at the taxpayers’ expense. If this bill passes, they won’t bother to go home.
Who possibly believes that all or even most of the 12-20 million undocumented workers in the US will go home or pay the fines (even as small as they are) necessary to gain citizenship under this new amnesty bill? Many will not “come out of the shadows” Senator Kennedy. If they all, or most, did, it would bankrupt Social Security even sooner. Also, there are no clear provisions to screen-out criminals or terrorists.
The bottom line is, the new immigration bill is BAD. The Democrats are willing to invoke this likely disaster simply to gain millions of new votes and insure their hold on power indefinitely. We can only hope that there is enough public outcry to stop this thing in its tracks.
We tried a general amnesty in 1986 and it was an utter failure. This new amnesty will dwarf that. We are not only repeating but we are amplifying our past mistakes. The stakes are FAR HIGHER this time around! Do we really want to sell American citizenship to just about anyone for $5000 or less? I think not.
Very best regards,
Gary D. Halbert
Why the new immigration bill is a disaster.
Rewarding Illegal Aliens: Senate Bill Undermines The Rule of Law
The Fiscal Cost of Low-Skill Immigrants to the U.S. Taxpayer
Mexican kids flock to Texas public schools along border.
Immigration bill – why Bush needs to lose this one.
Forecasts & Trends E-Letter is published by ProFutures, Inc. Gary D. Halbert is the president and CEO of ProFutures, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, ProFutures, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.