President Barack Obama’s amnesty for four million illegal immigrants will cost Americans about $2 trillion, or roughly $40 billion a year for the next five decades.
The cost of Obama’s generosity is equivalent to 30 cents extra for every gallon of gas bought by Americans.
Or a $10 monthly fee added to every cellphone.
Or a $22,000 tax on every American graduate’s four-year college degree.
The $2 trillion cost is driven by the federal government’s support for all poor people, says Robert Rector, a budget analyst at the Heritage Foundation. Rector explained that, on average, the illegal immigrants benefiting from the amnesty have a 10th grade education.
That low education ensures they can’t earn enough money, or pay enough taxes, to pay for the many benefits they’ll get if they progress from temporary residents to legal residents and then to citizens, Rector said.
These various benefits add up to roughly $50,000 a year for each household, but those households can and do pay only about $13,000 a year in federal taxes, leaving a gap of roughly $40,000 between payments and benefits, Rector said.
That gap is effectively filled by payments from intact, college-education households which normally pay $30,000 more in taxes than they receive in benefits. “It takes all of the net taxes paid by one college-educated family [household] to pay for one of these immigrant households,” he said.
Rector draws his estimate from a May 2013 analysis he completed for Heritage, which predicted a $6.3 trillion, 50-year cost if all 12 million illegals in the country were granted amnesty.
Currently, government spends roughly $50 billion a year supporting the children and families of illegal immigrants. Much of that costs consists of free schooling and medical care for the U.S.-born kids of illegals.
Obama’s plan will expand the spending, for example, by providing tax benefits, including Earned Income Tax Credit.
Two parents with three or more children would receive up to $6,143 in 2014 if they earn less than $46,997, according to the Internal Revenue Service’s EITC calculator.
Those benefits will gradually expand to include healthcare and retirement benefits, Rector said.
“It is completely implausible that the Obama administration plans to have people with legal status reside here for 30 years without medical care… They would incrementally gain access to all of the means-tested programs,” he said.
According to Rector, half the total cost of the amnesty will come due once the low-wage migrants get Green Cards and tap into Americans’ Social Security and Medicare funds. Americans with similar education get $3 back from Social Security for every $1 they pay in taxes.
Obama’s plan speeds up the transition to full welfare support by promising to ignore a legal requirement that illegal immigrants leave the country for 10 years once their U.S.-born adult children sponsor them for Green Cards.
“This is nothing to do with deferred prosecution, he completely changes the law, willy nilly, to produce his own immigration policy,” Rector said.
That long-standing 10-year departure law has deterred many illegals from using their children to get citizenship.
In his Nov. 21 directive, Obama eliminated the deterrent by announcing that illegals can stay in the country for the 10 years they’re supposed to be outside the country.
Advocates for the amnesty predict the costs will be offset by increased tax revenues.
For example, the amnesty allows migrants to compete against Americans for better jobs, which will boost their tax payments, say advocates.
“A deferred action program that allows undocumented immigrants who have lived in the United States for at least five years to apply for a temporary work permit would increase payroll tax revenues by $6.08 billion in the first year alone and increase revenues by $44.96 billion over five years,” said a September report by the Center for American Progress.
But even if that estimate is accurate and is not reduced by reductions to Americans’ wages in a more competitive marketplace, the gain only adds up to a fifth of the $40 billion per year costs identified by Rector.
Obama’s Council of Economic Advisers touted his amnesty Nov. 21 by saying it would raise “annual wages for [American] native workers will rise 0.3 percent, or approximately $170 in today’s dollars” in 10 years, or 2024.
Even if true, that plan would be almost entirely consumed by the extra costs of welfare for the low-skilled migrants.
However, in a public 2013 conversation with fellow economists, the head of Obama’s CEA admitted that the flood of new workers actually helps hold down Americans’ wages.
That conventional view was echoed by an April 2013 report from Harvard University professor George Borjas. He estimated that legal and illegal immigrant have expanded the economy by 11 percent, or $1.6 trillion.
But immigrants receive 97.8 percent of that $1.6 trillion increase in their pay packets, he reported. Their hard work for low wages also drags down the wages paid to Americans who compete against immigrants by roughly $402 billion per year, he calculated.
Since 2011, Obama has distributed almost one million work-permits to foreigners. His new amnesty will boost the number up to five million, which amounts to roughly 75 percent of all extra jobs added since 2009.
Migrants’ low skills are not immediately offset by government schools, but may persist for generations according to a 2009 report, Generations of Exclusion, by the Russell Sage Foundation.
Most households of illegals have very low income, and pay little in taxes. In 2011, roughly 22 percent of immigrant households — both legal and illegal — were classified as living in poverty. In contrast, only 13 percent of American households were in poverty, according to government data collected by the Center for Immigration Studies.
Polls show that the public is hostile to the amnesty plan and want Obama to work with Congress on immigration.