A dead-end immigration proposal
This appears on Bloomberg View:
Leave aside the other features of the immigrationreform proposal President Donald Trump endorsed on Wednesday and focus on its main idea: Reducing immigration by half over a decade. It’s the wrong goal. There’s no doubt the U.S. immigration system is broken — or that a shift to merit-based immigration, which the proposal advocates, is long overdue. But admitting far fewer immigrants would do enormous damage to the U.S. economy and the federal government’s fiscal stability.
The legislation Trump embraced, proposed by Republican senators Tom Cotton of Arkansas and David Perdue of Georgia, would not increase skills-based immigration. Indeed, the number of skilled immigrants granted legal residency annually would remain roughly what it is now, 140,000, while family visas would be slashed and the 50,000 so-called diversity visas (for applicants from countries that are otherwise underrepresented) would be eliminated altogether.
Trump said the new system “will reduce poverty, increase wages and save taxpayers billions and billions of dollars.” How this would happen is a mystery.
The sharp reduction in immigrant workers in the years ahead would also reduce tax receipts for Social Security, Medicare and Medicaid, the tripod supporting the nation’s rapidly-aging baby boomers — 10,000 of whom retire daily. Immigrants paid about $328 billion US in taxes in 2014, according to one estimate.
In effect, the plan would take the demographic headwinds the U.S. faces already and transform them into a gale. To counter those winds, the nation needs higher productivity. And one way to boost productivity is to welcome skilled immigrants.
Trump claims to admire the immigration systems of Canada and Australia, and both are good role models.
But those nations also admit far more immigrants, as a percentage of population, than the U.S. does. This plan is not a skills-based system akin to Australia and Canada. What the president and senators are proposing is a dead end.