Cost to Government of Treating Undocumented Immigrants Totaled $2.5B in 2002, Report Says

Undocumented immigrants in 2002 consumed $10.4 billion more in federal government services, such as Medicaid, Medicare and charity care, than they paid in taxes, according to a report released Wednesday by the Center for Immigration Studies, the Washington Post reports. The report from CIS, a group that supports more stringent immigration policies, was based on U.S. Census Bureau statistics comparing the revenue that undocumented immigrants contributed through taxes with the cost of federal government services they used, the Post reports. According to the report, the net fiscal deficit for undocumented immigrants could increase to $29 billion if they are granted legal status because they would continue to pay modest taxes but likely would seek more government services (Fitzgerald, Washington Post, 8/26).

Medicaid and Medicare Costs
According to the 48-page report, the two largest government costs from undocumented immigrants in 2002 were Medicaid, costing $2.5 billion, and charity care for the uninsured, costing $2.2 billion. The report found that 17% of households headed by undocumented immigrants received Medicaid benefits, compared with 14% of all other households (Seper, Washington Times, 8/26). However, the report also found that undocumented immigrants "pay substantially more in Social Security and Medicare than they use, creating a net benefit for these two programs of over $1,800 a year per [undocumented immigrant] household." About 43%, or $7 billion, of the federal taxes undocumented immigrants pay goes to Social Security and Medicare, the report stated. The report found that undocumented immigrants create a total net benefit "well in excess" of $7 billion for the Medicare Part A and Social Security programs. The report estimated that the Social Security and Medicare costs for households headed by undocumented immigrants came to $289 per household, compared with all other households' costs of $5,127. According to the report, undocumented immigrants account for 0.2% of the national total costs for these programs.

Reaction
"Put simply, large-scale unskilled immigration is incompatible with current economic conditions and an extensive welfare state," the report stated (Camarota, Center for Immigration Studies, 8/25). Author Steven Camarota, director of research for CIS, said, "With nearly two-thirds of [undocumented immigrants] lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels and resulting low incomes and tax payments, not their legal status or heavy use of most social services." He added that the negative fiscal impact of such immigrants could only be lessened by stringently enforcing current immigration laws, the Post reports (Washington Post, 8/26). Katherine Culliton, spokesperson for the Mexican American Legal Defense and Educational Fund, said many segments of the U.S. economy, including health care, would deteriorate without labor provided by undocumented immigrants (Washington Times, 8/26). Jeffrey Passel, a demographer at the Urban Institute, said, "Implied within this study's findings is the sense that if these people could suddenly be made to disappear, the federal government would be $10 billion to the plus, and that is almost certainly not true once you look at the numbers" (Washington Post, 8/26).

The report is available online.