The Rubenstein Report - More Anti-Immigrant Propaganda

Edwin Rubenstein has written a report entitled “The Fiscal Impact of Immigration – An Analysis of the Costs to 15 Federal Departments and Agencies”. In this report he claims to have analyzed the impact of immigration on the Federal government for the year 2007. Rubenstein estimated that immigrants cost the Federal government $346.4 billion per year.

This report is not specifically about illegal immigration but immigration in general. The report estimates the cost as a result of both legal and illegal immigration. Included also is the costs associated with children of immigrants that were born in the United States. Rubenstein’s reason for including this category is that if not for immigration, these individuals would not be here and therefore the Federal government would not be incurring costs as a result of their presence, never mind that every single one of us is a descendent of immigrants.

The report does not include any increase in revenues or decrease in costs associated with immigration. Rubenstein only included costs and adverse effects. His reason for doing this was so that anti-immigration fanatics would have a larger number to quote as the cost of immigration.

In addition, the report only addresses the impact of immigration on the Federal government. Costs to states and localities are not included in the total.

One would expect that a report entitled “An Analysis of the Costs to 15 Federal Departments and Agencies” would be about an analysis of costs to federal departments and agencies, but it’s not. Most of the narrative in the report discusses issues unrelated to the topic including building a fence along the U.S. – Mexico border, the Security and Prosperity Partnership of North America, the North American Union, an imaginary four football fields wide super highway that goes from Mexico to Canada, how farm subsidies affect Mexican farmers, and other totally unrelated topics.

The problem with analyzing Rubenstein’s report is that he doesn’t disclose how he came up with the numbers. For example: he claims that immigration costs the Department of Homeland Security $25.2 billion, but he doesn’t disclose how he came up with that figure. He discloses that the budget included $3 billion for border patrol and $2.2 billion for detention and transportation of illegal aliens. How he came up with the other $20 billion is not mentioned.

The final page of the report Rubenstein claims that costs are estimated based on the foreign born share of the U.S. population or the foreign born share of the labor force. In other words, Rubenstein estimated the cost of the Department of Energy by multiplying total outlays by the percentage of the population made up by immigrants. This method is clearly not used for some areas such as the USDA, Department of Transportation, Treasury, HHS and Social Security. Trying to duplicate Rubenstein’s method of estimating the costs is futile. Using the method he described, I unsuccessfully tried to duplicate Rubenstein’s calculations using 2007 expenditure figures for the various departments and agencies. He is not specific in how he arrived at the costs he claims are the result of immigration.

This report includes lies, false statements and exaggerations. One obvious false statement is in the prologue on page three of his report. He claims that the Earned Income Tax Credit is available to illegal immigrants with children. IRS Publication 596 page 5 states that a filer must have a valid social security number to receive the credit. The qualifying child must also have a valid SSN, and if it’s a joint return, then both filers must have a valid SSN. Something that obvious, something that clear, something that easy to verify, and Rubenstein gets it wrong. One is only left to ponder whether or not Rubenstein is uninformed about the subject matter or that he intentionally included the false statement in his report.

Department of the Treasury $146.6 Billion: The agency that Rubenstein claims incurs the most cost of immigration is the Department of the Treasury. Rubenstein estimates that the immigrant workforce reduced the average wage of Americans by 5.25% using a model prepared by economist George Borjas. Rubenstein goes on to conclude that this would thereby reduce income taxes, payroll taxes and other taxes. This he estimates will reduce taxes by $98.4 billion.

However, Rubenstein blatantly fails to address the other side of the equation. If the average wage decreases, then the net income of the business that employs the wage earner increases by exactly the same amount. Because corporate income tax rates are higher than individual income tax rates, the actual result would be a net positive affect on tax revenues. Low skilled workers’ wages are decreased meanwhile corporate income increases. This results in a net positive effect.

In addition, Rubenstein blatantly leaves out the taxes paid by immigrants. The Immigration Policy Center estimated that immigrants pay over $165 million in federal income taxes alone. Rubenstein claims that the foreign born receive 12% of personal income. Total social insurance receipts were $884 billion in 2007 thereby rendering at 12% over $100 million was received as a result of immigration.

Rubenstein goes on to say that some immigrant households received an earned income tax credit in 2000 but doesn’t disclose where he got this figure or what the total cost is. He repeats the false statement he made in the prologue that illegal immigrants are eligible to received the earned income tax credit for their children.

In summary, Rubenstein claims that immigrants cost the Treasury $146 billion. The actual figure is that immigrants result in a net positive benefit of over $265 billion.

So in analyzing Rubenstein’s report, we’ve gone from a $146 billion loss to a $265 billion net benefit.

Social Security Administration $58.3 Billion: In the chapter on Social Security, Rubenstein doesn’t explain one penny of this. He devotes several pages to a totalization agreement with Mexico which hasn’t even been approved by Congress yet. Then he starts talking about welfare, medical assistance and housing subsidies which have nothing to do with Social Security Administration. He cites a Center for Immigration Studies report that claims that illegal aliens receive, at the federal level, $10 billion more in benefits than they pay in taxes. The CIS report includes costs for education, welfare and justice, not social security. Then he cites another study saying that illegal aliens’ net cost to states is $15 billion. And that’s it. Not one word of this chapter explains the $58.3 billion.

His report is sloppy and rails to support his conclusion.

Department of Health and Human Services $57.2 Billion: Rubenstein does provide some explanation at least for a portion of what he claims immigrants cost this department. Rubenstein describes Individual Development Accounts for refugees ($145 million), the Emergency Medical Treatment and Active Labor Act of 1985 ($250 million) and Medicaid. Rubenstein estimates that immigrants are recipients of 11% of Medicaid payments total $21.1 billion. He leaves $35.7 billion out of $57.2 billion unexplained.

Department of Homeland Security $25.2 Billion: Rubenstein states that the cost of Border Patrol is $3 billion and the cost of detention and transportation of detainees is $2.2 billion. These are all the costs that Rubenstein mentions. His report includes a lengthy narrative about estimates of the cost of a fence along the U.S. – Mexico border.

Rubenstein doesn’t include this figure, but the 2007 budget for ICE was approximately $4.7 billion.

Department of Transportation $13.7 Billion: Rubenstein talks about how more people cause more congestion. More immigrants means more people. He also mentions an executive order issued by President Clinton mandating the improvement of service for people with limited English proficiency. Rubenstein provides no cost for this. On the last page of the report, Rubenstein mentions in a footnote that $6 billion of federal revenues are lost due to immigrant related traffic congestion.

He never explains how he concluded that immigrant related traffic congestion costs the Federal government $6 billion in revenue.

Department of Education $12.9 Billion: An Urban Institute report states that the nation’s K-12 population consists of 5% immigrants and another 14% children of immigrants resulting in 19% immigrant or child of immigrant. Rubenstein claims that immigrants and their children are more costly to educate because they require ESL instruction. Thus, Rubenstein claims that 25% of education expenditure are a result of immigration.

Department of Agriculture $10.3 Billion: Rubenstein calculated the cost of immigration to the Department of Agriculture as follows:

Food Stamps: USDA spends $35.6 billion on food stamps according to Rubenstein. Of that, 14.8% is attributable to immigration thereby costing the government $5.3 billion.

WIC: USDA spends $5.2 billion on WIC according to Rubenstein. Of that, 25.5% is attributable to immigration thereby costing the government $1.3 billion.

School Lunch Program: USDA spends $13.7 billion on the school lunch program. Rubenstein claims that 27.3% is attributable to immigration thereby costing the government $3.7 billion.

Rubenstein cited a report by the Center For Immigration Studies for these figures.


Department of Labor $7.1 Billion: Rubenstein mentions the Office of Foreign Labor Certification ($177 million) and the Occupational Health and Safety Administration (the actual name is the Occupational Safety and Health Administration but never mind that Rubenstein doesn’t even know the names of the agencies he writes about). OSHA’s budget is $490 million according to Rubenstein. His rationale for including this as a cost of immigration is that sometimes immigrants get hurt on the job. Nevertheless, the costs that Rubenstein mentions are a long way from the $7 billion he claims. He spends most of this chapter explaining why workplace enforcement should be conducted by the Department of Labor.

Department of Energy $2.6 Billion: In the chapter on energy, Rubenstein talks about how the higher the population the more stress on energy resources. He also talks about greenhouse gases and urban sprawl and claims that increased immigration results in increased population thereby worsening these areas. He doesn’t spend a single word explaining how he arrived at the $2.6 billion figure.

Department of Justice $2.1 Billion: Rubenstein claims that 27% of federal prisoners are foreign born. Thus, 27% of the $5.4 billion cost of incarcerating federal prisoners is a result of immigration. He also includes $300 million due to the State Criminal Alien Assistance Program.

State Department $1.2 Billion: Rubenstein explains the costs of consular offices in various countries. The total cost is $4.9 billion, but Rubenstein never explains his estimate of the portion that is attributable to immigration. In addition he cites the Refugee Admission Program which costs $750 million.

Commerce Department $1.1 Billion: Rubenstein spends the bulk of this chapter on the Security and Prosperity Partnership, the North American Union and the NAFTA Super Highway. Not one word of this chapter explains the $1.1 billion he claims immigrants cost the Department of Commerce.

Department of Interior $400 Million: Rubenstein explains that $36.4 million is spent cleaning up trash on the border. He doesn’t explain the rest of the cost.

Defense Department $300 Million: The bulk of this cost is a result of National Guard troops on the U.S. – Mexico border. Rubenstein estimates the cost of 6,000 troops on the border at an average pay of $45,000 per year.

In the end, Rubenstein’s report doesn’t even come close to explaining how he arrived at the estimated impact of immigration. It’s sloppy. The purpose for writing the report was just so that anti-immigration fanatics could cite a figure while they spam forums, message boards and emails all over the internet.

Does immigration result in costs to the Federal government? Yes. But as I reviewed Rubenstein’s report, I was surprised at how much taxes paid by immigrants exceed the costs. As a result of immigration, Federal tax revenues increase an estimated $265 billion. That by far exceeds any costs that the Federal government incurs due to immigration.