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Trump touts study that says immigrants could actually save taxpayer dollars

A family walks by a store specializing in phone calls and travel to Latin America in Queens on Aug. 29, 2016, in New York City. (Photo by Spencer Platt/Getty Images)

President Trump told Congress Tuesday night that too many immigrants fail to make their own living and end up dependent on the government.

His evidence: a detailed immigration report published last year by the National Academy of Sciences, a prestigious, nonpartisan research organization.

“It is a basic principle that those seeking to enter a country ought to be able to support themselves financially. Yet, in America, we do not enforce this rule, straining the very public resources that our poorest citizens rely upon,” Trump said in his address to a joint session of Congress. “According to the National Academy of Sciences, our current immigration system costs America's taxpayers many billions of dollars a year.”

That statement, however, is at odds with some of the report's most important findings.

Trump is correct that the report did find that current immigrants receive more in government benefits than they pay in taxes. In 2013, for example, the authors of the report calculated that the government spent $279 billion more on first-generation immigrants than they paid in taxes. But over time, the report projects, immigrants have the opposite effect on the budget deficit. A recent immigrant and her descendants could be — over a 75-year period — expected to pay an average of as much as $259,000 more in taxes than they receive in government benefits.

That conclusion, that current immigrants and their descendants may end up paying far more to the government than they get out of it, seems to undermine Trump's claim that the current immigration system would impose billions in costs to “America's taxpayers.”

The forecast that immigrants could ultimately improve the government's bottom line undermines Trump's claim that the current system is hugely costly for taxpayers — many of whom are themselves immigrants.

It is true that immigrants are more likely to receive some forms of direct public benefits — including food stamps and Medicaid — than U.S.-born citizens. But, as immigrants tend to be younger, they are also less likely to draw on Medicare and Social Security, and many of them will pay taxes to support these costly programs for years before receiving benefits from them. The authors of the report found that the children of immigrants are “among the strongest economic and fiscal contributors in the population.”

The report, which stretches more than 500 pages, did not come to any firm conclusion about immigrants' net effect on public finances, in part because of the complexity of the calculation.

As they are with everyone else, immigrants' tax and benefit levels are set both by their own economic success and by the fiscal policies lawmakers set over the course of their lifetimes. When the authors calculated the above $259,000 figure, they assumed policymakers will eventually act to balance the national budget. (When the authors assumed the government would continue to run a deficit, they still found the average recent immigrant and her descendants would pay in more than they receive, though in this scenario the surplus shrinks to an average of $77,000.)

Additionally, there's no standard formula for calculating how much governments pay out in benefits, leaving many of the assumptions and estimates in the hands of individual researchers.

In their conclusion about immigrants' 2013 taxes and benefits, for example, the report's authors cautioned they used a broad definition of public benefits, including intangible benefits such as national security. The calculation assigned each resident of the country, including immigrants, an equal share of the Pentagon's budget as an indirect benefit — even though more its unlikely than any individual immigrant leads to an incremental increase in defense spending. The Air Force, for example, would not buy more jet fuel simply because more people are living in the United States.

Despite Trump’s simplification of immigrants’ net effect on government deficits, the report provides evidence for his broader claims.

The new president was probably correct when he argued that giving priority to better-educated immigrants would put less stress on public finances, as immigrants with more education have a higher earning potential. A recent immigrant who has not finished high school and her family are expected to cost the government about $117,000 over 75 years, according to the report, while an immigrant with graduate education has projected fiscal benefits of $812,000.

But the current system seems to already be pulling in immigrants with more education than those of years past. In 1970, the average recent immigrant had 11.6 years of education, according to the report. By 2012, that figure had steadily increased to 13.4 years, and only a quarter had not finished high school, compared with just over half in 1970.