Illegal Immigrants At Least $10 Billion Net Cost At Federal Level

Randall Parker, ParaPundit, Aug. 25

The Center for Immigration Studies has a new study on the costs to the federal government of illegal aliens written by Steven A. Camarota. The net cost of illegal immigrants to the US government is conservatively at least $10 billion per year.

This study is one of the first to estimate the total impact of illegal immigration on the federal budget. Most previous studies have focused on the state and local level and have examined only costs or tax payments, but not both. Based on Census Bureau data, this study finds that, when all taxes paid (direct and indirect) and all costs are considered, illegal households created a net fiscal deficit at the federal level of more than $10 billion in 2002. We also estimate that, if there was an amnesty for illegal aliens, the net fiscal deficit would grow to nearly $29 billion.

Among the findings:

Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household.

• Among the largest costs are Medicaid ($2.5 billion); treatment for the uninsured ($2.2 billion); food assistance programs such as food stamps, WIC, and free school lunches ($1.9 billion); the federal prison and court systems ($1.6 billion); and federal aid to schools ($1.4 billion).

• With nearly two-thirds of illegal aliens lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels and resulting low incomes and tax payments, not their legal status or heavy use of most social services.

• On average, the costs that illegal households impose on federal coffers are less than half that of other households, but their tax payments are only one-fourth that of other households.

• Many of the costs associated with illegals are due to their American-born children, who are awarded U.S. citizenship at birth. Thus, greater efforts at barring illegals from federal programs will not reduce costs because their citizen children can continue to access them.

If illegal aliens were given amnesty and began to pay taxes and use services like households headed by legal immigrants with the same education levels, the estimated annual net fiscal deficit would increase from $2,700 per household to nearly $7,700, for a total net cost of $29 billion.

• Costs increase dramatically because unskilled immigrants with legal status—what most illegal aliens would become—can access government programs, but still tend to make very modest tax payments.

• Although legalization would increase average tax payments by 77 percent, average costs would rise by 118 percent.

A few points to note about this study:

  • They do not appear to have factored in costs and revenues at the state and local levels of government. So, for example, most of the costs of educating the children of illegal aliens are not included. Higher law enforcement costs for the local commuities due to higher crime rates among illegals are similarly not included.
  • The costs that victims pay (emotional, financial and from loss of loved ones) from crime is not factored in.
  • The need to build more public infrastructure such as roads and schools due to immigrant population growth does not appear to be included. Los Angeles is currently in the middle of a $10 billion school building project due to illegal immigrant-caused population growth.
  • The cost of racial preferences is not factored in. The bigger the Hispanic population gets the higher the costs that Caucasians and East Asians and South Asians will have to pay for racial preferences. Businesses and governments will run less efficiency as larger portions of their work forces are hired to satisfy quotas and so-called “diversity” goals.
  • Environmental costs are not considered. The higher the population density gets the higher the costs must be per person to keep total pollution down.

The problem caused by illegal immigration does not last only until descendant generations get educated to American levels. As Steve Sailer points out the Hispanic-white achievement gap is going to prevent Hsipanics as a group from ever rising to white levels of education, income, and tax paying.

Recently, while browsing Tom Wood’s new “Right on Race“ blog, I had a chance to ask Stefan Thernstrom what the NAEP data actually showed. He graciously provided the following raw data, to which I’ve added some straightforward calculations. (Number fans click here for table).

Conclusion: overall, the white-immigrant Hispanic achievement gap is actually 14% worse than the notorious white-black disparity.

But for American-born Hispanic children (not just second generation, as many might assume, but the second up through the seventh generation), the gap is 67% as large as the white-black variance.

Exactly as I predicted!

(It’s interesting that the gaps between whites and blacks and native-born and foreign Hispanics are widest among 8th graders and narrowest among 12th graders. Presumably this narrowing is partly caused by differing high school dropout rates, which remove more of the lowest-scoring minorities from the ranks of the test-takers.)

The good news: if we cut off all immigration from Latin America tomorrow, the total white-Hispanic achievement chasm would narrow over the next, say, 30 years, from more than 90% of the white-black difference down to 67%.

Steve’s numbers above are consistent with Hispanic high school graduates across generations from first generation immigrants all the way through 4th generation descendants. We pay for the first generation and we keep paying for the later generations.

We should stop the influx of illegal aliens and deport the illegals that are already here. We should also change legal immgration qualifications to make college level education as the minimum required for prospective immgrants.

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