Transcript: Q&A with Sen. Amy Klobuchar on the impacts of immigration to the U.S. economy – Joint Economic Committee hearing on May 7, 2013

Partial transcript of Q&A with Sen. Amy Klobuchar (D-Minn.) on the impacts of immigration on the U.S. economy. The Joint Economic Committee hearing was held on May 7, 2013:

Sen. Amy Klobuchar (D-Minn.):
…I mentioned the ag worker issue, which Mr. Norquist also mentioned. One of the most moving parts of the testimony in front of the Senate Judiciary Committee where we’ve now heard from something like 25 witnesses was when one of the migrant workers was sitting next to one of the head of the farm groups. And as you know, the Farm Bureau, the Farmers Union has endorsed this bill. Could you talk briefly about how this can be so helpful for agriculture and the economy?

Dr. Adriana D. Kugler, Professor at Georgetown University and Chief Economist of the U.S. Department of Labor in 2011 and 2012:
…As I mentioned, 72% of laborers in agriculture are foreign-born. So only 28% of the ones working in agriculture are native-born and they tend to do managerial occupations. So the basic labor work in the pre-harvest, harvest, post-harvest stages tends to be done by laborers. And as I said, this makes you wonder how the agricultural sector would even work if you didn’t have these foreign-born individuals who are working there. There are about 50% who are actually currently undocumented and they are very much in limbo; they can be kicked out at any time, which means that at some point the $200 billion in value-added that gets produced by the agricultural sector could even be halved. So it is very important to provide some stability to these labor force. It is very important to give some sense of certainty to the agricultural employers to know that these workers are going to be there ahead. And I think that the idea of providing agricultural visas of allowing people to change from one employer to another and to allowing them to stay here makes a whole lot of sense.

Sen. Amy Klobuchar (D-Minn.):
Mr. Norquist, the Heritage Foundation put out a report yesterday that says that immigration reform could cost as much as $6.3 trillion over 50 years…Could you talk about that study and do you think that it accounts for the economic benefits that immigrants could bring to this economy and why you think that this study is incorrect?

Grover Norquist, President of Americans for Tax Reform:
To be fair to Heritage, for 30 years the Heritage Foundation was a Ronald Reagan-Jack Kemp institution that recognized the value of immigration to the country and did very professionally-done studies to that effect. Julian Simon, the great economist and thinker, was a senior fellow at the Heritage and in ’84 put together a paper on the nine myths of immigration, which covered most of the mistakes people make when they suggest that immigration hurts rather than helps the economy. Those nine are still true today – or still false today. Criticisms of the nine are still true. And in that year, they did a debate between Julian Simon, which they published, and some character from FAIR [Federation for American Immigration Reform] who made an argument against immigrants. And then in 2006 there was an excellent study Tim Kane put together – he’s now at Hudson as an economist – making the case that immigrants were net benefit to the economy.

It’s only since 2007 that one guy over at Heritage has had a different opinion.

The 2007 study at the time was basically used by radio talk show hosts to took the number and not the analysis and have a conversation. Since then, other groups – CATO and others – have gone back and gone through that study and suggested it’s not actually very accurate. And there was a hope that if Heritage did a re-do on that study, that they’d improve those; they didn’t. And much of the costs which they attributed are there anyway; there are people who are citizens today. So like 40% of the cost is education and 80% of those people are citizens now. So they stick that on as if it was a cost of the legislation.

I mean, one thing to keep in mind when people throw out some numbers here is that somebody who’s going to retire at 2030 is going to collect $650,000 on average in Social Security and Medicare but only pay $494,000. So a little more than $150,000 for everybody – they’re going to get more than they pay out. That’s true for everyone in the country. That’s true for people who are born here; that’s true for people whose relatives came over on the Mayflower. Has nothing to do with our immigration policy. And if you think that more people because the entitlement system needs to be reformed – I know you folks are working on that but at present if you don’t reform them, the whole country goes bankrupt – it’s not an argument to structure how many children you have or how many immigrants you have based on a flawed entitlement program that needs to be reformed.

So if you take those challenges in, you take those numbers that Heritage puts out on entitlement, it’s an argument against having children. I mean, children tend to be much younger than immigrants, their English is much more limited. They don’t work very often, and they’re going to get a lot more out of the entitlement program than they put in. But that’s a bad argument against children; it’s a good argument for reforming entitlements.

Sen. Amy Klobuchar (D-Minn.):
Mmmhmm, very good, and also from what I understand – and you looked at the Holtz-Eakin numbers – there’s a strong argument – we’ll get the CBO score here – but that it actually brings the debt down in the long-term to bring these people out of the shadows and have them work and pay taxes and everything else. Do you want to comment on that?

Grover Norquist, President of Americans for Tax Reform:
Yes. And this is, I think, where we should credit Heritage. They for a long time said we ought to be using dynamic scoring. When you increase the labor force, you ought to recognize that when you study the future labor force. When you know historically that people that come in and get legal status are able to work more productively, you can figure that in. These are not made up. These are historical numbers that you can look at. And so I understand CBO has announced they will be doing dynamic scoring on those issues where you can look at historically and know something – you’re not guessing about what the impact would be. And I was disappointed that Heritage in this study decided that they would ignore dynamic analysis. I’m not sure it makes sense.

Sen. Amy Klobuchar (D-Minn.):
…One of the most moving parts about your testimony before the Judiciary Committee is you quoted Ronald Reagan’s farewell address to the nation about the shining city with walls that had doors that were opened to anyone with the will and heart to get here. Do you think that this immigration reform moves us closer to being that shining city on the hill.

Grover Norquist, President of Americans for Tax Reform:
Absolutely. And look, I want to commend the Senators and the folks on the House side in the approach you’re taking on this – the group of eight that put together this step one on immigration reform. They didn’t show up at 7 a.m. and say let’s have a vote at 10 a.m. They’re not asking – like the market fairness people – they’re not asking to skip the actual regular order of going through committee. It’s online. Everybody who wants to whine about it or make a suggestion or amend it can read that. It’ll be before the committee. It’ll be before the whole Senate. The House is going to come up with their own analysis in this general direction. So anyone who has a real concern can bring it up as an amendment. People who just don’t like immigrants can say, “Oh, it’s not perfect, no.” I think that’s silly. But I do think that the Senate and the House are taking exactly the right approach to this because it needs to be thought about. It needs to be done publicly – not in the middle of the night, not quickly. We’re months away from Senate action and we’re going to have lots of time to talk about this in the House. There’s no reason for anybody to be nervous about how we go through. I think it’s a tremendous opportunity for bipartisan cooperation in creating more economic growth, and as Holtz-Eakin’s numbers say this would do more to reduce the deficit than some of the other things people talk about.

Sen. Amy Klobuchar (D-Minn.):
…In 1950, there were 16 workers to every retiree. Today, there are three workers to every retiree. And by 2030, there will be only two workers for every retiree. And I know we’ve talked about reforms and other things that need to be done here but how, again, does immigration stem that problem when you look at the number of people? If we were to shut off our borders and not let any immigrants in or to send back the 12 million that are already here now or 11 million or whatever the correct number is, how does that affect Social Security for our existing retirees?

Dr. Adriana D. Kugler, Professor at Georgetown University and Chief Economist of the U.S. Department of Labor in 2011 and 2012:
So we know that by 2030, about 33 million new jobs will be created which is due to the retirement of the baby boomers. Maybe 17 million more jobs will be created just because of growth in the economy. We need people to satisfy the demand, and we need people to do those jobs. But that has important implications as well for the Social Security system.

As I mentioned before, currently it’s estimated that there’s $600 billion in their earned suspense accounts. This means that many undocumented have already been putting money into the system. They don’t get anything back. But we also know that after Sept. 11 this from the Social Security Administration only about 15% of the undocumented are paying taxes. It used to be 50% before Sept. 11. It became harder and that fell to 15%.

It means that 85% of the 11 million undocumented would now start paying taxes as a result of gaining legal status, and that’s very important especially with the upcoming baby boomers retiring and with many of those people not contributing to the system but getting the benefits on the other hand.

In addition, as I mentioned before, we know that naturalized citizens actually tend to claim less benefits and tend to claim less. So they tend to put more into the system than they actually take out of the system.

Grover Norquist, President of Americans for Tax Reform:
Well, the present entitlement systems – Medicare and Social Security – promised to pay more than people pay in. So I guess every person you add marginally makes things better in the short-run and worse in the long run assuming you’re never going to reform the systems. But if you’re going to reform those systems to become sustainable, which really needs to happen in the next 10 years if the country’s going to continue forward economically, then more people into those systems helps.

Sen. Amy Klobuchar (D-Minn.):
…Tourism…We’ve seen this decline in the numbers at the same time we’re seeing a growing middle-class in other countries that actually have money to come and visit us and spend money here and buy stuff in America. What do you think of the provisions in the Senate proposal on tourism?

Dr. Adriana D. Kugler, Professor at Georgetown University and Chief Economist of the U.S. Department of Labor in 2011 and 2012:
As we know, the recovery in the rest of the world aside from Europe has been a lot quicker, including Latin America, Asia and the rest of the world. So it makes sense for us to use as much as possible those resources to bring back into the U.S. Just like we export, it makes sense to bring money into the country as well in terms of tourism and using tourist visas as long as people don’t overstay, those visas make quite a bit of sense.

Grover Norquist, President of Americans for Tax Reform:
Those provisions are sheer genius.

Sen. Amy Klobuchar (D-Minn.):
…I was struck by your comment that replacing immigration reform with an enforcement-only policy would lead to a $2.6 trillion decrease in growth over the same period of time. Could you talk about that? And again, use that to explain what’s missing from the current Heritage Foundation report?

Grover Norquist, President of Americans for Tax Reform:
…One of the studies I quoted in the Judiciary Committee testimony was “What if you went and spent the money to grab everybody and put them across the border?” – the cost there. And that was a rather significant, not only a huge cost to finding people, grabbing them, and throwing them across the border in terms of dollar amounts – and it’s hundreds of billions of dollars to do that if we wanted to – but then the lost productivity was estimated to reduce GDP significantly in the trillions of dollars.

So if you’re not going to reform immigration policy and allow earned legal status for people who are here undocumented, what are you going to do? Continue this status quo? In which case, any cost you see now continue in the future. Or if you’re going to actually grab people and throw them across the border and they’re not here and theoretically not being replaced, there’s a dramatic drop to GDP.

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2 Comments on “Transcript: Q&A with Sen. Amy Klobuchar on the impacts of immigration to the U.S. economy – Joint Economic Committee hearing on May 7, 2013

  1. Pingback: ANALYSIS: Grover Norquist debunks Heritage Foundation's claims that immigration reform will add $6.3 trillion to the deficit | What The Folly?!

  2. Pingback: Transcript: Q&A with Sen. Roger Wicker on the impacts of immigration on the U.S. economy - Joint Economic Committee hearing on May 7, 2013 | What The Folly?!

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