Updated:  

Earlier today, the Heritage Foundation released its analysis on the fiscal costs to U.S. taxpayers should the Gang of Eight's amnesty bill pass in Congress. The study found that an amnesty for the nation's 11 million illegal aliens would cost taxpayers $6.3 trillion over the lifetime of the illegal aliens. The study compared dozens of ways that the government would collect taxes and fees from amnestied illegal aliens against the benefits they would receive from the federal government.

The study assigns all federal benefits to four separate categories:

  • Direct benefits. These include Social Security, Medicare, unemployment insurance, and workers' compensation.
  • Means-tested welfare benefits. There are over 80 of these programs which, at a cost of nearly $900 billion per year, provide cash, food, housing, medical, and other services to roughly 100 million low-income Americans. Major programs include Medicaid, food stamps, the refundable Earned Income Tax Credit, public housing, Supplemental Security Income, and Temporary Assistance for Needy Families.
  • Public education. At a cost of $12,300 per pupil per year, these services are largely free or heavily subsidized for low-income parents.
  • Population-based services. Police, fire, highways, parks, and similar services, as the National Academy of Sciences determined in its study of the fiscal costs of immigration, generally have to expand as new immigrants enter a community; someone has to bear the cost of that expansion. 

Robert Rector, who conducted most of the research for the report, has been studying government-funded services for years and has found that only households with high levels of education pay more in taxes over their lifetime than those with lower levels of education.

The Pew Hispanic Center estimates that only 15% of illegal aliens have at least a college degree, while nearly three out of every four illegal aliens has no more than a high school diploma. Rector used government data similar to Pew's data to reach his conclusion.

Through Rector's research, he's determined that the average illegal-alien household receives around $24,721 in government services, while only paying $10,334 in taxes, amounting to a $14,387 net cost to the American taxpayer. That cost would obviously continue, but legalization of the illegal alien population would also make them eligible for many other forms of federal benefits, primarily Medicare and Social Security in retirement, once they receive green cards and citizenship.

According to the report: 

The final phase of amnesty is retirement. Unlawful immigrants are not currently eligible for Social Security and Medicare, but under amnesty they would become so. The cost of this change would be very large indeed.

  • As noted, at the current time (before amnesty), the average unlawful immigrant household has a net deficit (benefits received minus taxes paid) of $14,387 per household.
  • During the interim phase immediately after amnesty, tax payments would increase more than government benefits, and the average fiscal deficit for former unlawful immigrant households would fall to $11,455.
  • 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.
  • Amnesty would also raise retirement costs by making unlawful immigrants eligible for Social Security and Medicare, resulting in a net fiscal deficit of around $22,700 per retired amnesty recipient per year.

In terms of public policy and government deficits, an important figure is the aggregate annual deficit for all unlawful immigrant households. This equals the total benefits and services received by all unlawful immigrant households minus the total taxes paid by those households.

  • Under current law, all unlawful immigrant households together have an aggregate annual deficit of around $54.5 billion.
  • In the interim phase (roughly the first 13 years after amnesty), the aggregate annual deficit would fall to $43.4 billion.
  • At the end of the interim phase, former unlawful immigrant households would become fully eligible for means-tested welfare and health care benefits under the Affordable Care Act. The aggregate annual deficit would soar to around $106 billion.
  • In the retirement phase, the annual aggregate deficit would be around $160 billion. It would slowly decline as former unlawful immigrants gradually expire. 

For more information, see the Heritage Foundation

Illegal Immigration
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Taxpayer Burden