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Fiscal lift, burden in immigrant legislation

Congressional report cites costs for decade

MANCHESTER, N.H. -- The immigration bill before Congress would cost the federal government roughly $18 billion over the next decade, largely because of the huge costs of additional border control and law enforcement measures, according to an analysis released yesterday by the nonpartisan Congressional Budget Office.

But the report, released as the Senate is enmeshed in a raucous debate over a sweeping immigration bill, also reveals that legalization of immigrants would contribute tens of billions to the federal Treasury, buttressing arguments by backers of the compromise bill that immigrants do not drain the economy.

The congressional report goes to the heart of the contentious debate on how to deal with the 12 million undocumented immigrants living in the United States and the millions of others who want to come here to live and work: How much of a financial bur den do the foreign-born residents impose?

The analysis found that over the next decade, newly legalized immigrants and guest workers would generate $48 billion in additional tax and Social Security revenues, while using about $23 billion worth of tax credits and social services. Thus, the newly legal immigrant population would contribute a net of about $26 billion over the decade, the report said.

The increased border security and enforcement of tougher laws against employers who hire illegal immigrants, key elements of the compromise package, would cost about $43 billion during this 10-year period, the congressional study said. With the increased revenues generated by the legalized immigrants, the net cost to the federal Treasury would still be close to $18 billion.

Critics of a liberal immigration policy say the newcomers cost more than they contribute because they tend to hold low-paying jobs, so they pay little in taxes and are more likely to be eligible for government help.

However, the report provided statistical ammunition for those who argue that immigrants are net contributors to the country's economic growth.

"The Congressional Budget Office report shows what we already know -- that immigrants contribute to our economy and our national life," said Senator Edward M. Kennedy, Democrat of Massachusetts and a leading negotiator of the compromise package now before the Senate.

Over the long haul, the bill would be a virtual fiscal wash, costing after 20 years a few billion dollars a year more in enforcement and government assistance than the Treasury would get back in tax revenues from the foreign-born workers, the study said.

"It is not a big budget-buster," said Jim Horney, a budget analyst with the Center for Budget and Policy Priorities, which advocates for social safety net programs. "If you had 'enforcement only' " as an immigration policy, "there's the potential that it would be much more expensive" than legalizing undocumented workers and forcing them to pay taxes, he said.

Some conservative groups have said that immigrants use more resources than they contribute.

A recent report by the Heritage Foundation, which favors lower taxes and government benefits, calculated that the average low-skilled immigrant household receives $19,588 more in benefits each year than it contributes in tax revenues. That estimate includes not only direct aid, such as medical care for the poor, but also the cost of schooling immigrant children and of using public facilities shared by all residents.

But immigrant advocates point out that illegal foreign-born residents contribute in many tangible ways, such as paying Social Security but never getting government retirement benefits, as well as by boosting businesses' bottom lines by working for low wages.

Most research over the past 20 years has shown that immigrants have lower rates of drawing benefits than native-born Americans, said Randy Capps, an analyst with the Urban Institute. Further, "there isn't any evidence that people, with the exception of refugees, are coming here to get benefits. "

All immigrants, legal and undocumented, are required to pay income taxes, and the immigration bill under debate in the Senate would also require undocumented workers to pay back taxes if they have not followed the law.

Illegal immigrants are not eligible for need-based aid, except limited emergency medical care and children's health care, as well as elementary and secondary schooling. Legal immigrants must be in the United States lawfully for five years before being eligible for aid such as food stamps and welfare.

The exceptions are refugees, including Cubans who make it to land, who are immediately eligible for federal need-based aid. US-born children of illegal immigrants are citizens and are also eligible for such assistance.

All illegal immigrants must pay Social Security and Medicare taxes, even though many will never see those benefits. Any worker, citizen or not, must pay Social Security taxes for a combined 10 years before being eligible for benefits, according to Dorothy Clark, a spokeswoman for the Social Security Administration.

The "guest workers" in the immigration bill would be allowed to work in the United States for only an aggregate of six years, and unless they later applied for and received citizenship, the money they paid into the Social Security system would never be returned to them.

The Social Security fund includes about $7 billion to $8 billion from immigrants, legal and illegal, who paid into the system but will not draw cash from it, according to government estimates.

"It makes me insane," said Cecelia Munoz of the National Council of La Raza, a Latino advocacy group. "Basic fairness and decency would tell you that if you [are legal], you should get back what you paid in."

Lawmakers and presidential candidates are sparring over a host of provisions in the compromise immigration package, including who may be allowed in the country and how long they may work here legally.

A heated argument is brewing over a provision that lessens the importance of family ties in deciding which applicants would be given a visa to immigrate legally .

Some legislators are seeking to restrict immigrant benefits, including barring immigrants from receiving the earned income tax credit. The credit is directed toward the working poor and is refundable. That means a taxpayer can get a check from the federal government if he or she had no tax liability.

Kennedy said he would fight the effort to deny the tax credit to immigrants. "We don't do that to rapists, murderers, or thieves," he said.