Not Passing a Clean Dream Act Would Hurt Taxpayers

This month is almost certain to bring a major confrontation in Congress over the fate of the nearly 700,000 young immigrants who are losing the protection from deportation that they had under President Obama’s Deferred Action for Childhood Arrivals (DACA) program, now slated to end on March 5.

Immigrant rights activists are demanding that Congress safeguard DACA recipients by finally passing some version of the Dream Act, legislation first proposed in 2001 that would provide legal status for about 2 million immigrants who arrived in the United States as minors. The Republican leadership in Congress, on the other hand, insists that to get any relief for DACA recipients, Democratic legislators must agree to increases in immigration enforcement and a tightening of restrictions on authorized immigration. President Trump tweeted on December 29 that “there can be no DACA without the desperately needed WALL at the Southern Border and an END to the horrible Chain Migration & ridiculous Lottery System of Immigration etc.”

This could be a hard sell for the Republicans. They face pressure from the DACA recipients known as “Dreamers,” who boldly occupied congressional offices in December to demand a “clean Dream Act” — that is, one without compromises. The anti-immigrant forces also have to deal with opposition from the public, including some of Trump’s own base: Back in September Fox News pollsters reported that 83 percent of registered voters wanted some form of legal status for immigrant youths.

Effects on Migration

The Republicans may try to bolster their position by citing a report the nonpartisan Congressional Budget Office (CBO) issued on December 15, an estimate of the impact on the federal deficit that would result from the current Dream Act proposal, S.1615. According to the CBO’s projection, the bill, which a bipartisan group of senators introduced in July, would increase the deficit over the next decade by about $25.9 billion. Right-wing media immediately touted the projected deficit’s supposed “cost to American taxpayers.”

But there’s a problem: The CBO report doesn’t really show that the Dream Act would hurt the average US taxpayer. In some ways, the report actually undercuts immigration opponents’ arguments.

Take Trump’s rhetoric about “chain migration.” This is the right wing’s new term for family reunification, a decades-old process through which citizens and lawful permanent residents can sponsor immigration visas for family members, although with many limitations. In September, Rep. Dave Brat (R-Virginia) told NBC’s Chuck Todd that current DACA recipients “can bring in their entire extended family once they reach a certain status. So it’s 3 or 4 million, right?” Actually, the CBO estimated that because of restrictions on family reunification visas, the total number of family members that 2 million Dream Act beneficiaries could sponsor by the end of a decade would come to just 80,000 — a small fraction of Brat’s claim. And no, they wouldn’t be brought in. “Virtually all of those new recipients are already in the United States,” the CBO explained.

The Economic Impact

On the economic side, the CBO report does appear to support the right’s claim that a Dream Act would hurt taxpayers — but only if we fail to recognize the CBO’s actual mandate.

The agency is charged with providing a fairly conservative estimate of a bill’s direct impact on federal revenues and expenditures, without projecting all of the bill’s possible effects on the overall economy. In fact, this is why the right wing felt free to overlook projections that the tax bill President Trump signed into law on December 22 would add $1 trillion to the deficit: The Republicans made dubious claims that other economic factors would offset this deficit.

So how would the Dream Act impact the overall economy?

The 700,000 DACA current recipients are eligible to receive work permits, enabling them to move into the formal economy and contribute to payroll taxes. The Dream Act would extend this eligibility to 1.3 million other immigrants, and the CBO expects that the addition of workers to the formal economy would mean a $5.3 billion increase in federal revenues over the next decade. But there are two other effects that the CBO doesn’t consider: the increase in the immigrants’ wages when they start working on the books, and their access to better-paying jobs because of the Dream Act’s education features, including incentives to attend college. A 2012 study by the Center for American Progress (CAP), based on a Dream Act proposal from 2010, projected that by the end of two decades, a combination of these factors would translate to a 19 percent increase in earnings for the newly documented immigrants. (The current Dream Act proposal has less stringent education requirements than the 2010 version, so the earnings increase would be probably somewhat lower now.)

This earnings increase would in turn create a ripple effect, benefiting other working people. Immigration opponents are quick to say that the low pay of undocumented workers creates downward pressure on wages for native-born workers with similar qualifications, but they don’t usually mention the corollary: raising wages for immigrants has the opposite effect. Moreover, the Dream Act beneficiaries would likely spend most of their pay raises on consumer goods for themselves and their families, along with education, better housing and better health care — spending that creates more jobs while ensuring that the immigrants’ own citizen-children will grow up healthier and better educated.

How much would this benefit the larger economy? The 2012 CAP study gave a rough estimate: “[T]he passage of the DREAM Act would add $329 billion to the US economy and create 1.4 million new jobs by 2030.”

The Human Factor

Another shortcoming of the CBO’s mandate is that there’s no requirement to project the economic effects of not passing a Dream Act.

If there isn’t some form of protection for DACA recipients, about 700,000 young people will be pushed out of authorized employment and educational programs over the next two years. This will mean lower income for the immigrants and their families, and less stimulus for wages and for the economy. Right-wing politicians will, of course, propose a solution — “deport them all” — but they rarely talk about the economic expense. In 2015, CAP made what it said was a very conservative estimate that the total cost of apprehending, detaining and deporting each immigrant would come to $10,070. Meanwhile, the center-right American Action Forum (AAF) projected that the cost could go as high as $27,116. So deporting the 2 million potential Dream Act beneficiaries might cost taxpayers as much as $54.2 billion — more than double the CBO’s projected deficit of $25.9 billion.

The reality is that the Dream Act would produce a net economic benefit for most taxpayers — although not for employers who seek to exploit cheap undocumented immigrant labor. Of course, we should think twice before valuing people only for their impact on the economy. Immigrants aren’t just economic factors; they’re human beings — in the case of the Dreamers, human beings who have been members of our society for most of their lives. But even in the Republicans’ own terms, the Dream Act would be a big win for the great majority of us.