Morning Action: Congress Needs to Understand the Long-Term Cost of Amnesty
AMNESTY. The long term cost of amnesty must not be underestimated. In order to come to a better understanding of the cost of amnesty, Sen. Jeff Sessions (R-AL) encouraged the CBO to produce a long-term fiscal and economic analysis of the Gang of Eight bill, rather than simply producing a 10-year budget window estimate:
The letter also asks CBO’s number crunchers to conduct a detailed demographic analysis and examine how the amnesty legislation would impact on labor markets.
A complete copy of Sessions’ letter is posted below.
Heritage’s own analysis determined the very high cost of amnesty — trillions over the course of an illegal immigrant’s lifetime. That projection includes their eligibility for Social Security, Medicare and other federal welfare programs.
The Senate Judiciary Committee voted 13-5 in favor of the Gang of Eight amnesty bill, setting up a floor debate for the week of June 10. The CBO analysis is expected to be released in advance of the showdown on the Senate floor.
The high cost of amnesty is not the only problem with the Gang of Eight bill. The current approach fails to secure the border — a top priority for many Americans. And granting amnesty will encourage more unlawful entry. That’s clear from the 1986 law, when amnesty was done before and didn’t work.
FARM BILL. This trillion-dollar “farm” and food stamp bill remains a looming threat, and the repercussions for taxpayers cannot be emphasized enough:
It will cost around $950 billion over a decade, says the non-partisan Congressional Budget Office (CBO). That’s plenty of potatoes to squabble over. Republicans complain that claiming food stamps has become too easy under President Barack Obama—the number of claimants has risen from 26.3m in 2007 to 47.6m today.
Handouts to farmers may also be vulnerable. Proponents of the new bill (of which there are two draft versions) boast that it ends “direct payments” to farmers. These are the subsidies paid to producers of wheat, corn, cotton, rice, peanuts, etc, regardless of whether they actually grow these crops—or even plant them. Other plums, such as “counter-cyclical payments” (extra handouts when prices are low) are also to be eliminated.
That may sound like a ray of sunshine for taxpayers, but there are clouds looming. Vincent Smith, a professor of farm economics at Montana State University, says the new bill offers a “bait and switch”. Direct payments are the bait, he explains, but they have been replaced by an expanded programme of subsidised crop insurance.
The bill may face pitchforks in the House of Representatives. John Boehner, the Speaker, fumes that it takes “Soviet-style” dairy supports and makes them worse.
IRS. The IRS staff who were responsible for pushing a political agenda by targeting conservative and pro-life groups have not had criminal charges filed against them and still remain in their positions:
At this point in the saga surrounding the Internal Revenue Service and its use of “Tea Party” and other search terms to flag conservative groups while reviewing their applications for tax-exempt status, all of the employees caught up in the scandal are still drawing federal paychecks.
The official who has become the scandal’s public face is on paid administrative leave. The former acting director, who was relieved of his job by President Barack Obama on May 15, departs on Friday.
The names of low-level officials who carried out the practice have been closely guarded by IRS higher-ups and agency’s inspector general. No criminal charges have been filed.
STUDENT LOANS. The House and the Senate are currently considering the issue of student loans. As we have noted, they are operating on incomplete information because the Congressional Budget Office has not yet produced an accurate estimate of the cost to taxpayers of the federal student loan program. Moreover, the federal government should get out of the student loan industry entirely. Still, President Obama has called on Congress to prevent a doubling of interest rates on student loans and to make them “more market based.” (sub. req’d):
Naturally, Mr. Obama is sitting down with the leaders of both parties in a good-faith effort to iron out their remaining differences before the July 1 rate increase. Just kidding.
After hurling a veto threat at the House, Mr. Obama is hosting a White House media event Friday morning. As his spokesman Jay Carney described it, “the President will be joined by college students here at the White House for an event where he will call on Congress to prevent student loan interest rates from doubling on July 1.” Does Mr. Obama realize he can’t run for re-election again?
House Education Chairman John Kline’s bill sets floating rates on new Stafford loans at the 10-year Treasury rate plus 2.5%, while also protecting borrowers by capping the rates at 8.5%. Under this plan, a borrower can consolidate his loans after graduation to achieve a fixed rate.
Mr. Obama’s plan is purely for fixed, not floating, rates at the 10-year Treasury rate plus 0.93% or 2.93% depending on the type of Stafford loan, and it has no rate cap. We wish both the House and Mr. Obama would drive a harder bargain on behalf of the taxpayer, but they aren’t separated by a difference of philosophy.