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Amnesty: Problematic Before and After the 13 Year Mark

As the Washington Examiner recently pointed out, the Gang of Eight’s amnesty bill fails to resolve a very pressing problem.  “The bill,” they state, “would effectively encourage employers to hire newly legalized immigrants over American citizens as a way of avoiding Obamacare’s taxes.”

This problem would last for roughly 13 years when the illegal population who had been granted amnesty would be able to obtain full citizenship.

They explain:

Under the existing Senate immigration bill, immigrants who have been in the United States illegally can obtain a provisional legal status after paying fines and meeting certain preconditions. But this population would have to wait at least 13 years to be able to obtain full citizenship, and it isn’t until then that they could qualify for government benefits such as Obamacare.

The problem arises when this rule interacts with another provision of Obamacare – the employer mandate. Starting in January, businesses with 50 or more employees who don’t offer workers health insurance that the federal government deems acceptable must pay a penalty if at least one of their workers obtains insurance on a new government-run exchange. The penalty is up to $3,000 per worker.

Thus, amnesty incentivizes employers to hire immigrant workers rather than face hundreds of thousands of dollars in Obamacare fines for the next 13 years.

Heritage has explained that the situation bodes no better for Americans after the 13-year mark – the point at which most of the illegal immigrants who had been granted amnesty could become citizens:

If enacted, amnesty would be implemented in phases. During the first or interim phase (which is likely to last 13 years), unlawful immigrants would be given lawful status but would be denied access to means-tested welfare and Obamacare. Most analysts assume that roughly half of unlawful immigrants work “off the books” and therefore do not pay income or FICA taxes. During the interim phase, these “off the books” workers would have a strong incentive to move to “on the books” employment. In addition, their wages would likely go up as they sought jobs in a more open environment. As a result, during the interim period, tax payments would rise and the average fiscal deficit among former unlawful immigrant households would fall.

After 13 years, unlawful immigrants would become eligible for means-tested welfare and Obamacare. At that point or shortly thereafter, former unlawful immigrant households would likely begin to receive government benefits at the same rate as lawful immigrant households of the same education level. As a result, government spending and fiscal deficits would increase dramatically.

American workers will take the hit from amnesty for the first 13-year window, and American taxpayers will take the hit after the 13-year window.

As the Examiner also indicates, this issue was not resolved with any of the amendments proposed during the Senate Judiciary Committee markup.  If the amendment process on the floor is anything like the one that took place when the bill was being debated in committee, it is highly unlikely a suitable solution will be found.

But the incentive this amnesty bill will give employers to hire illegal immigrants (after they get amnesty) rather than Americans is just one problem among many other egregious flaws.

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  1. Pingback: Immigration Battle Heats Up in the Senate » Coffee and Markets

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