By Tory Newmyer
September 3, 2016

Saturday Morning Post: The Weekly View from Washington

Perhaps because the most provocative immigration reform proposal this election season has a near zero chance of becoming real, the debate on the topic hasn’t focused much on the nuts and bolts of the policy itself and its impacts. Instead, attention has trained on the political fallout of Donald Trump’s call to build a border wall and assemble a deportation force. How much will it hurt him with Hispanics? How much will it hurt the Republican Party with Hispanics? Will the damage outlast the campaign? Could it spill over and damage U.S.-Mexico relations? All those questions were front and center again this week as the GOP nominee ended his extended flirtation with “softening” on his signature issue in typically theatrical fashion. After a lightning-strike visit south of the border to meet with Mexican president Enrique Peña Nieto, Trump flew to Phoenix and delivered a barnburner that appeared to close the door definitively on moderating his hardline.

So with Trump standing pat on an immigration reform plan that has no shot at Congressional passage, it’s worth considering the impact of Hillary Clinton’s approach — one that given its resemblance to a package the Senate recently approved (not to mention her solid polling lead) stands a reasonable chance of making it into law. Clinton’s proposal, like the 2013 Senate-passed bill it builds on, would dramatically hike the number of noncitizens who could come into the country legally, for both permanent and temporary stays. And it would create a path to citizenship for those here illegally, provided they meet certain conditions.

The nonpartisan Congressional Budget Office found that the “Gang of Eight” package that passed the Senate would grow the population by about 10 million people in its first ten years. That growth would boost economic output, increasing real GDP by 3.3 percent over ten years and reducing federal budget deficits by about $200 billion over the same period. Both effects grow more pronounced in a 20-year window. Average wages would dip by .1 percent in the first ten years but rise by .5 percent over 20 years, since in the early going, the amount of capital available to workers wouldn’t keep pace with number of new entrants into the workforce — and because those new workers would be less skilled on average, thereby earning less and pulling down the average wage overall. Moody’s Analytics, in a favorable macroeconomic review of Clinton’s platform, writes that “there is no policy she has proposed that provides a more potent boost to the economy than immigration reform. Driving this is the 10.4 million additional legal immigrants and their dependents that are expected to come into the U.S. over the next decade under the new law.”

The debate, as we’ve seen, has many dimensions, and they are intertwined. Deep-seated resistance to immigration, sentiment Trump has both drafted off of and stoked, reshapes the politics of the issue, complicating federal action. But action, when it comes, is bound to look more balanced than Trump’s approach, and that should translate to good news for the economy.

Tory Newmyer


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