It isn’t every day that both Republicans and Democrats alike enthusiastically circulate a Wall Street Journal editorial, but that’s exactly what happened today with this WSJ take on the fiscal benefits of immigration reform. And for good reason. The editorial blows up one of the major objections on the right to reform — that creating a path to citizenship will create more in costs than it will in benefits — by pointing out that more immigration will actually improve Social Security’s financial outlook:
The crux of the problem is that the ratio of workers to retirees is falling fast. While there were 16 workers for every retiree in 1950, the ratio now stands at a little under 3 to 1 and within 20 years when the baby boomers are age 65 or older the ratio will fall to about 2.5 to 1.
Immigrants help ease this demographic problem in three ways. First, most come here between the ages of 18 and 35, near the start of their working years. Second, few come with elderly parents (only about 2.5% of immigrants are over age 65 when they arrive), and the seniors who do come aren’t eligible for Social Security because they have no U.S. work history. Third, immigrants tend to have more children than do native-born Americans and their offspring will also pay into the system.
These facts are confirmed in the latest report of the Social Security trustees released last week. They conclude that the program’s long-term funding shortfall “decreases with an increase in net immigration because immigration occurs at relatively young ages, thereby increasing the numbers of covered workers earlier than the numbers of beneficiaries.”
How big a bonus are we talking about? Enormous. We asked Stephen Goss, Social Security’s chief actuary, to estimate the value of the 1.08 million net new legal and illegal immigrants that currently come to the U.S. each year. He calculates that over 25 years the trust fund is enriched in today’s dollars by $500 billion and the surplus from immigration mushrooms to $4 trillion over 75 years.
With reform increasing the level of immigration, the Journal concludes, “the future fiscal immigration windfall is likely to exceed $4.6 trillion.”
Pro-reform operatives aligned with Republicans and Democrats alike both told me today that having the Journal editorial board making this point could be very helpful in continuing to push reform through Congress.
“The biggest misperception about immigrants is that they take more than they contribute with respect to taxes and benefits,” Frank Sharry, the head of the pro-immigration America’s Voice, tells me. “This shows what academics have known for a long time but the public hasn’t, which is that over the course of a lifetime immigrants make a huge contribution.”
Meanwhile, the office of Marco Rubio — a leading pro-immigration reform conservative — is also circulating the editorial, and praising it in glowing terms.
The timing of the editorial is ideal, with members of Congress just returning from recess. It comes as many conservative Republicans continue to claim that Obama has failed thus far to “lead” on entitlements or to otherwise address what they regularly argue, with a great deal of exaggeration, is a looming entitlements “crisis.”
Indeed, the Journal editorial says: “More generous immigration is a wise step toward solving the entitlement crisis in Washington.” It’ll be interesting to see how conservative lawmakers handle this one.
Indeed, pro-reform forces will try to use the Journal cannon-blast to continue a process that’s already underway — the marginalization of far right voices trying to derail reform by casting it as a huge blow to the taxpayer. The editorial also underscores again just how much some very powerful GOP-aligned voices want reform to happen. It illustrates the fault lines of this debate within the Republican Party, and the ways it has pitted the more pragmatic, business-aligned wing of the party against those playing to a nativist base that appears unwilling to let the party evolve.
“It’s sort of like the reformers versus the racists,” Sharry says. “It’s the people who want to modernize the party — really and in fact — versus the people who want it to remain a xenophobic, increasingly marginalized whites-only party.”
That’s a harsh assessment indeed, and there are certainly opponents of reform who do not fall into that latter camp. But it remains true that some conservative lawmakers really are demagoguing reform with the claim that it will gouge American taxpayers for the express purpose of sinking anything that offers a path to citizenship.