[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Senate]
[Pages S12656-S12657]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]




           NATIONAL ACADEMY OF SCIENCES STUDY ON IMMIGRATION

 Mr. ABRAHAM. Mr. President, I rise today to discuss the 
National Academy of Sciences study on immigration that has received so 
much attention in the past year. This is a study the Senate Immigration 
Subcommittee held a hearing on this September featuring two of the 
principal authors of the report.
  In releasing the study, the Academy stated quite clearly that 
``Immigration benefits the U.S. economy overall and has little negative 
effect on the income and job opportunities of most native-born 
Americans.'' Moreover, the recent hearing showed that the study's 
findings were actually more positive than the initial press reports 
indicated.
  Ronald Lee, a professor of demography and economics at the University 
of California at Berkeley who performed the key fiscal analysis for the 
Academy study, testified at the hearing that ``[The NAS] Panel asked 
how the arrival of an additional immigrant today would affect U.S. 
taxpayers. According to the report, over the long run an additional 
immigrant and all descendants would actually save the taxpayers 
$80,000.'' Lee notes that immigrant taxes ``help pay for government 
activities such as defense for which they impose no additional costs.'' 
Immigrants also ``contribute to servicing the national debt'' and are 
big net contributors to Social Security.
  Critics of immigration cite only the study's figures on the annual 
costs immigrant households are said to impose on natives. However, Lee 
testified that ``These numbers do not best represent the Panel's 
findings, and should not be used for assessing the consequences of 
immigration policies.'' This is a pretty clear statement that citing 
the household cost figures to urge cuts in legal immigration is an 
improper use of the study's data.
  The problem, Lee found, was that calculating annual numbers requires 
using an older model that counts the native-born children of immigrants 
as ``costs'' created by immigrant households when those children are in 
school, but fails to include the taxes paid by those children of 
immigrants once they complete their schooling, enter the work force, 
and become big tax contributors. The key fiscal analysis in the report, 
performed in Chapter

[[Page S12657]]

7, corrects the flaws in the annual figures by using a dynamic model 
that factors in the descendants of immigrants.
  In response to a question from the subcommittee, Ronald Lee noted 
that, with the necessary assumptions, a dynamic analysis would likely 
show at least 49 of the 50 States come out ahead fiscally from legal 
immigration, with California a close call.
  Jim Smith, chairman of the NAS study, testified that ``Due to the 
immigrants who arrived since 1980, total Gross National Product is 
about $200 billion higher each year.'' In other words, recent 
immigrants will add approximately $2 trillion to the nation's GNP over 
the course of the 1990s.
  I ask to have printed in the Record a recent Wall Street Journal 
article that goes into greater detail on the Academy study.
  The article follows:

           [The Wall Street Journal, Tuesday, Nov. 11, 1997]

                      Immigrants Bring Prosperity

                          (By Spencer Abraham)

       Critics of America's immigration policy are attempting to 
     reignite the heated debate that almost produced laws severely 
     restricting legal immigration. Ironically, they are using as 
     their vehicle a National Academy of Sciences study, released 
     earlier this year, that was highly favorable toward 
     immigration. Anti-immigrant writers and advocacy groups have 
     engaged in a concerted effort to put a negative spin on the 
     report. ``The study highlights significant problems with 
     regard to immigration,'' crows the Center for Immigration 
     Studies.
       That just won't wash. A recent hearing before the Senate 
     Subcommittee on Immigration found that the study's findings 
     were even more positive than initial press reports indicated.
       The most important finding of the NAS report is that an 
     additional immigrant to the U.S. and all his descendants 
     would actually save taxpayers $80,000 over the long run. 
     Ronald Lee of the University of California, who was the 
     report's key fiscal analyst, notes that immigrant taxes 
     ``help pay for government activities such as defense for 
     which they impose no additional costs.'' Immigrants also 
     ``contribute to servicing the national debt'' and are big net 
     contributors to Social Security.
       Critics of immigration cite only the study's figures on the 
     annual costs immigrant households are said to impose on 
     natives. However, Mr. Lee testified that ``these numbers do 
     not best represent the panel's findings, and should not be 
     used for assessing the consequences of immigration 
     policies.'' The problem, Mr. Lee found, was that calculating 
     annual numbers requires using an older model that counts the 
     native-born children of immigrants as ``costs'' created by 
     immigrant households when those children are in school, but 
     fails to include the taxes those children pay once they enter 
     the work force. The $80,000 figure was arrived at using a 
     dynamic model that factors in the descendants of immigrants. 
     As for the fiscal impact on states of legal immigration. Mr. 
     Lee said, with the necessary assumptions, a dynamic analysis 
     would likely show 49 of them coming out ahead, with 
     California a close call.
       The benefits of legal immigration don't end there. Mr. Lee 
     said that the net present value to the nation of the 
     immigrants who will enter the U.S. during the 1990s is over 
     $500 billion. Jim Smith, chairman of the NAS study and a RAND 
     economist, testified that ``due to the immigrants who arrived 
     since 1980, total gross national product is about $200 
     billion higher each year.'' In other words, recent immigrants 
     will add approximately $2 trillion to the nation's GNP over 
     the course of the 1990s.
       Opponents of immigration also would like Americans to 
     believe that nearly everyone's wages are significantly lower 
     because of competition from immigrants. That is far from the 
     truth. The NAS study estimates that only two groups have seen 
     their wages affected by immigration: those who immigrated a 
     few years earlier, and native-born Americans who did not 
     finish high school. Wages for these groups are about 5% lower 
     than they would have been without immigration--a figure that 
     drops to 3% if only legal immigrants are counted, according 
     to Mr. Smith. Cutting legal immigration would have a ``quite 
     limited'' effect even on this group's wages, he said. 
     ``Fortunately,'' he noted, ``90% of Americans are not high 
     school dropouts, an the percent of high school dropouts has 
     been declining rapidly.'' Indeed, Mr. Smith added that 
     competition from immigrants sends wage signals that encourage 
     native-born Americans to stay in school.
       ``The competition from immigration for even some native-
     born workers can be easily exaggerated,'' testified Mr. 
     Smith. ``To the extent immigrants do work different than that 
     of native-born workers, immigration benefits all native-
     Americans who gain in their other role as consumers of these 
     now less-expensive goods and services.''
       In short, the NAS study confirms what most Americans have 
     known all along: Our tradition of welcoming immigrants pays 
     off--for the immigrants and for the rest of us.

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