The Heritage Foundation's $6.3 Trillion Deception

I was hoping to stop talking about immigration, but then the Heritage Foundation decided to crap on their own credibility by issuing a report that is so phony it would have made a Soviet propagandist’s head spin. So I figured I had to say something, especially as talk radio is running blindly with this report. What you’ve probably heard is that if Rubio’s bill passes, it will cost $6.3 trillion!! What you probably haven’t heard is that Heritage’s report is pure deception.

● Distortion: You know how we always complain about the Democrats talking about their spending cuts over a 10 year period to make the cuts seem meaningful when they aren’t? For example, do you remember how Obama claimed he proposed $4 trillion in budget cuts over 10 years, and how everyone scoffed at this because it’s a dishonest way to inflate the numbers? Well, guess what...

To get their $6.3 trillion number, Heritage adds up the cost over 50 years. Yes, 50.

That’s a credibility killer right there.

If you break their number down by year, you’re talking about $126 billion per year on average. That number is actually back-ended and is much lower in the first 30 years (and even lower in the first ten), but let’s go with the worst-case $126 billion. That $126 billion works out to only 0.8% of our GDP right now. And by the time we reach Heritage’s 50 year mark our GDP will be around $70 trillion per year, which means these illegals will cost a whopping 0.18% of GDP. It’s interesting how that $6.3 trillion suddenly doesn’t seem so large when you put it into context. And that’s just the beginning...

● Deception: The numbers Heritage uses include some nonsense assumptions that pretty much need to be considered deceptive. Here’s how Heritage determined the $6.3 trillion figure. First, they determined the total cost of government. Then they determined how much government spent on natives, on lawful immigrants and on illegal immigrants. They don’t actually explain how they determined this, but they did spend several pages pretending they did. Then they determined how much each group paid in taxes and they calculated the “net deficit” for each group by subtracting the amount of government spending they attribute to each group from the amount they paid in taxes. From this, they concluded that natives receive $310 more from the government than they paid to the government. Lawful immigrants received $4,344 more than they paid. And illegals received $14,387 more than they paid. Then they took this deficit for illegals and multiplied it by the number of illegals and the number of kids they would have, and they added it up. The end result was a $6.3 trillion deficit over 50 years.

Here’s why this is deceptive.

First, Heritage assumes that illegals will never earn more than they do now. Basically, Heritage assumes that nothing will change for these people after they are legalized and that they and their children will always work for their current wages for the rest of their lives. That’s nonsense, and Paul Ryan has already criticized this. Why would someone work for a couple dollars a day when they can now work at WalMart for above-minimum wage and benefits? Why would their kids do the same? Once illegals can work legally, there is no reason to believe they won’t do as well as legal immigrants. If we assume that illegals eventually match legal immigrants, then using Heritage’s own numbers, the Heritage deficit drops from $6.3 trillion to $1.9 trillion over 50 years or $38 billion a year.

Further, I have reason to doubt even that. At one point in their analysis, Heritage notes that legal immigrants actually out-earn natives by $59,071 per household compared to $53,937 for native households -- about $5,000. This calls into question Heritage’s claim that legal immigrants have a tax deficit that is $4,034 greater than natives. Why would legal immigrants, who earn more than natives use $9,000 more in services than natives? This doesn’t seem true. And if that isn’t true, then this deficit vanishes and immigrants become net contributors.

In any event, even the $1.9 trillion is overstated. To create these deficits, Heritage divides government spending into five types of benefits. The things natives like are dismissed as “for the public good” and aren’t counted. In other words, Heritage is making immigrants seem more expensive by downplaying the costs that benefit natives.

Continuing... of the remaining four benefit types, different values are assigned to natives, legals and illegals, again without adequate explanation. Heritage simply asserts that immigrants use more services (and illegals use even more) because immigrants live in higher density areas and therefore cost more. So, logically, if we move all the illegals to smaller towns, suddenly they become cheaper than natives. Does that seem credible to you?

Anyway, of the four categories of benefits, the two conservatives complain about are actually the smallest. This includes (1) direct benefits like social security and unemployment and (2) means-tested benefits like food stamps and welfare. But those alone don’t come anywhere near to creating a deficit, so Heritage adds two more benefits: (3) the cost of educating children in public schools and (4) the cost of “population-based services.” These population-based services are the cost of police, fire, highways, parks, public transportation etc. Those last two categories account for around $19,000 of the $24,000 Heritage assigns to illegals.

But ask yourself if this is truly valid.

For one thing, it seems dubious to claim that illegals cause highways, parks, police and fire. Those things will exist whether illegals are there or not. More interestingly though, consider public transportation. No doubt you’re thinking that must mean buses because illegals probably use buses, right? Except that’s not what it means. The real public transportation costs are airports and commuter trains... things illegals never use. Yet, Heritage not only attributes those costs to everyone, including illegals, it uses some hidden formula to charge illegals more for these things than natives even though illegals don’t use them. Ditto on highways. Illegals cluster in inner-cities, yet Heritage not only charges illegals with the cost of building and maintaining highways to the suburbs and through Montana, but it charges them more for those highways than it charges natives. It’s the same with schools. Do you think the children of illegals who go to aging inner-city or tiny rural schools actually absorb more costs than the suburban kids who go to the palaces they are building these days? Heritage wants you to believe they do.

● False Premise: Finally, there is another hugely misleading aspect of this report: it wrongly implies that these costs can be avoided. Basically, the report tells you, “Think about what it will cost if we pass this thing!” without ever mentioning that these costs will be borne whether the Rubio bill passes or not. In other words, these people are here already and they are already using these benefits legally. Heritage even acknowledges this, but then ignores that point so they can imply that these costs will only be incurred “if” the Rubio bill passes. This is false. Since all these costs will be incurred whether Rubio’s bill passes or not, the honest cost/benefit analysis Heritage should be performing is whether passing this bill will cause these people to contribute more as legal citizens than they would being left in the shadows. But that wouldn’t support the conclusion Heritage wants, so they avoid talking about that.


I find this frustrating. I find it frustrating that supposedly reputable conservatives are lying and distorting and producing deceptive reports in the name of ideology. Conservatism is supposed to be better than this and if this is what passes for analysis from somewhere like the Heritage Foundation then we have real problems. In any event, the CBO will be looking at this bill soon and I suspect they won’t find anything like what Heritage found. All this report really tells us is that we need to take everything we hear from Heritage with a grain of salt from now on. Nice work folks, way to blow your credibility.