Leave aside the other features of the immigration-reform 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, and it subverts the rest of the plan.
There’s no doubt the U.S. immigration system is broken - or that a shift to a merit-based immigration system, 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 Sens. 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.
With typical hyperbole, Trump said the new system “will reduce poverty, increase wages and save taxpayers billions and billions of dollars.” How exactly this would happen is something of a mystery. Perhaps he’s referring to the possibility that the most unskilled native workers might command modestly higher wages.
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 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. As it happens, one way to boost productivity is to welcome skilled immigrants. On average, every foreign-born student who gets a master’s degree in a U.S. university and works in science, technology, engineering or math creates 2 1/2 American jobs. Almost 6 million people work at immigrant-owned companies in the U.S.
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.