Washington’s deficit hawks lamented the dragging pace of tax reform at this year’s Fiscal Summit in Washington, their annual budget brainstorm spearheaded by Pete G. Peterson, the billionaire co-founder of the Blackstone Group.
The thought leaders' consensus, expectedly: It's not going to happen this year.
But one traditionally non-fiscal topic danced on the tongues of the meeting's attendees, including former president Bill Clinton: immigration reform.
On Tuesday, President Obama gave Congress a three-month deadline to fix America's immigration system. ("The closer we get to the midterm elections, the harder it is to get things done around here," Obama said, according to the White House transcript.)
Perhaps that was fresh on the minds of the policymakers Wednesday, who called immigration reform a means to reduce the more than $17 trillion national debt. The Peter G. Peterson Foundation, which aims to raise awareness about "fiscal challenges threatening America's future," was hosting the event. (Whether the deficit will actually doom the country is up for debate, and it's been shrinking rapidly in the last few years.)
Economist Glenn Hubbard, dean of the Columbia Business School and Mitt Romney’s former adviser, helped kick off the day’s trend. After moderator Lori Montgomery of the Washington Post asked -- “Is there anything we can do to make things better on any front?” -- Hubbard confidently responded: “Immigration reform.”
The fix, he reasons, would have a positive impact on population growth, the labor force growth and the housing market. And, he added, it would have a positive impact on the federal budget.
Framing immigration reform as a national debt solution is nothing new. The Congressional Budget Office predicted last year that fixing the system will hack more than a trillion dollars off the federal deficit in the next two decades.
Clinton, a regular marquee speaker at Peterson’s summit, told the packed Andrew W. Mellon Auditorium immigration reform should be viewed as an economic issue.
“We need young immigrants -- not only because of their ideas, their energy -- but just to continue to grow the economy,” he said. “People ... see immigrants as people taking jobs from them. But the truth is, if we did immigration reform right, it would create more jobs for all Americans.”
Senator Patty Murray (D-Wash.), the chairman of the Senate Budget Committee, cited the CBO’s findings: Taxes paid by new and legalizing immigrants could further reduce the already shrinking federal deficit by about $200 billion in the first decade and $700 billion in the second.
(A “significant” portion of the new taxes would be paid by the nation’s estimated 11.7 million undocumented immigrants, according to the report.)
The new workers, proponents argue, would make more money, spend more money, strengthen social security, an assertion that’s backed up by the 2013 Social Security Trustees Report, and stick around to found companies after graduating from American universities.
Per French economist Thomas Piketty’s best-selling “Capital in the Twenty-First Century,” an influx of immigrants could also help solve income inequality through population growth. (More workers, it turns out, means, higher GDP.)
No one at the bipartisan Fiscal Summit argued against immigration reform -- an issue, Clinton said, some Tea Party republicans illustrate with fabled “barbarians at the gate.”
But, then again, no one argued against tax reform, either.