Pethokoukis, Economics, U.S. Economy

Isn’t most of the supposed fiscal deficit from undocumented immigrants already baked into the cake?


Here’s the basic math from the Heritage Foundation study on the fiscal impact of legalizing undocumented workers: In 2010, the average undocumented immigrant household received around $25,000 in government benefits and services while paying roughly $10,000 in taxes. From the study: “This generated an average annual fiscal deficit (benefits received minus taxes paid) of around $14,387 per household.”

After what Heritage calls “amnesty,” that fiscal deficit would rise:

At the end of the interim period, unlawful immigrants would become eligible for means-tested welfare and medical subsidies under Obamacare. Average benefits would rise to $43,900 per household; tax payments would remain around $16,000; the average fiscal deficit (benefits minus taxes) would be about $28,000 per household.

Those numbers form the statistical nugget behind the claim that over a lifetime, “the former unlawful immigrants together would … generate a lifetime fiscal deficit (total benefits minus total taxes) of $6.3 trillion” in constant 2010 dollars.

OK, here’s what vexes me:

1. According to the Pew Hispanic Center, 80% of the children of undocumented parents were born here — some 4.5 million kids — and are thus US citizens. Americans.

2. Of that nearly $25,000 ($24,721 to specific) in government benefits and services going to undocumented households, education spending averaged $13,627 in 2010, while means-tested aid (going mainly to the US-born children in the family) averaged $4,497. So we are talking roughly $18,000.

3. In other words, around 40% of the spending under “amnesty” would be going toward US citizens. And that accounts for nearly two-thirds of the fiscal deficit. In other words, two-thirds of the fiscal deficit is already baked into the cake unless you are going to deport all those undocumented immigrant parents, and they take their children with them. I mean, is that the counterfactual here? Really?

3 thoughts on “Isn’t most of the supposed fiscal deficit from undocumented immigrants already baked into the cake?

  1. I’d say it illustrates the absurdity of the amnesty shill argument that importing Mexico’s poverty is any kind of economic benefit for the United States. Not captured in those numbers (at least I don’t think they are) are the higher than otherwise welfare payments to native born citizens because of immigration induced depressed wage levels at the low end.

  2. Here’s a counter argument…and indeed it is an argument: Many contend that a person born here of illegals is NOT a US citizen. If they are called American citizens, their status would have been gained by illegal activity…the flouting of our immigration laws by their parents. This expands to the anchor baby argument, etc.

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