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Jeff Du

Mrs. Mary Jane Sasser

IM 6-11AP

1/11/18

The Economic Effects of Proposed Public Charge Laws

I. Introduction:

Each year, over a million immigrants obtain green cards, thus becoming permanent

residents of the U.S (​Huennekens 1​)​. However, this number may decline, in part to various

policies being proposed and adapted by Congress and the current presidential administration.

The focus of this paper is on one of these specific laws, namely the Public Charge law, which

alters the criteria for those seeking permanent residence in the U.S. The legislation was

introduced in October of 2018, and received public input up until December 10th. Although not

officially passed into statute, the Public Charge law represents a step by the current

administration to limit those who they believe will become financially dependent on the

government from becoming citizens of the U.S. Although restricting legal immigration through

the Public Charge law will reduce government spending on various assistance programs, the

overall negative economic implications are clear; the change will also result in a decrease of

government revenue in the form of taxes, while also increasing overall healthcare costs for the

federal government. In addition, industries employing a substantial amount of immigrants will

see their eligible workforce shrink and costs increase.


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II. Background

In October of 2018, the current administration released a proposed change to the long-standing

definition public charge. When one applies to become a permanent resident of the United States,

they have to demonstrate to the government that they will not become a financial liability.Under

the change, the government would define the public charge through a variety of different factors,

including “having a medical condition, currently receiving ‘any government assistance’, having

received any government assistance for more than six months at a time within the last 36 months,

and not currently working or being enrolled in school full time and having no employment

history or reasonable prospect of future employment” (​Boteach 5​). The scope of the public

charge law, as compared with previous versions, has expanded greatly, as demonstrated in Figure

1 ​(Boteach 6​)
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Figure 1. Comparing Long-Standing Definitions of Public Charge to the New Proposed Changes

Boteach, Melissa, et al. ​Trump’s Immigration Plan Imposes Radical New Income and Health Tests.​ Center for American Progress, 19 July 2018. ​Center for American

Progress​, www.americanprogress.org/issues/poverty/reports/2018/07/19/453174/trumps-immigration-plan-imposes-radical-new-income-health-tests/.

Accessed 16 Sept. 2018.

As seen in Figure 1, many different government assistance programs are included in the new

Public Charge law, as opposed to long-standing definitions. If an alien enrolls in any of these

programs, it is considered a negative factor that could potentially lead to a determination of a

public charge. If an alien is deemed to be a public charge, then they “may be ​inadmissible and

ineligible for adjustment of status or admission into the United States” (​USCIS 1​). However, The

Department of Homeland Security and the U.S. Citizenship and Immigration Services, which
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preside over the enforcement of this law, have discretion and must holistically view each

applicant’s situation, including factors such as “age, health, family status..., and educations and

skills” (​USCIS 3​).

III. Body
I. Government Savings from Enacting Public Charge
A. Chilling Effect of Public Charge
1. Self-sufficiency has long been a basic principle of United States
immigration law. Since the 1800s, Congress has put into statute that
individuals are inadmissible to the U.S. if they are unable to care for
themselves without becoming a public charge and federal laws have stated
that foreign nationals generally must be self-sufficient ​(USCIS 1)​.
2. It continues to be the immigration policy of the United States that—(A)
Aliens within the Nation's borders not depend on public resources to meet
their needs, but rather rely on their own capabilities and the resources of
their families, their sponsors, and private organizations... DHS believes
that by virtue of their employment, such immigrants should have adequate
income and resources to support themselves without resorting to seeking
public benefits ​(Department of Homeland Security 51123)​.
3. Not all will face a public charge determination, but all are likely to be
nervous about applying for benefits, and some portion will in fact disenroll
from benefit programs (​Fiscal Policy Institute 1).
4. The proposed rule — which is open for public comments through
December 10 — wouldn’t alter Medicaid eligibility rules; instead, it
would cause coverage to be viewed negatively by the DHS when it
assesses whether immigrants can enter the country, extend their stay in the
United States, change their visa status, or adjust their status to secure a
green card (​Orris 2​).
B. Government Saves Money
1. The Dependency Ratio, or the dependent population divided by the total
population multiplied by 100, of immigrants is around 21.8% ​(Boucher
4).​ For every 100 persons of a given population, around 22 people are
dependent on either the government or other sources.
2. About 51% of immigrant-led households receive at least one kind of
welfare benefit, including Medicaid, food stamps, school lunches and
housing assistance, compared to 30% for native-led households, according
to the report from the Center for Immigration Studies (​Gomez 1​).
3. The average per capita costs of government assistance for an immigrant in
the United States averaged around $3718 dollars ​(Nowrasteh 2). ​The
chilling effect of the law would reduce enrollment and thus decrease the
amount of spending on these programs.
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4. DHS estimates that the 10-year discounted total direct costs of this
proposed rule would range from about $386,532,679 to $1,105,487,375 at
a 3 percent discount rate and about $318,262,513 to $910,234,008 at a 7
percent discount rate” ​(Department of Homeland Security 51117).

Transition: Reducing the number of people on government benefit programs such as Medicare
and food stamps will save the government revenue in the short term as people disenroll, yet there
are serious negative economic consequences that occur as a result.

II. Decreased Government Revenue and Increased Expenses


A. The amount of eligible tax residents will be reduced due to the reduction of green
cards issued.
1. An estimated “24 million people in the United States would be affected by
the chilling effect of the Trump Rule” ​(Fiscal Policy Institute 4).
2. Reducing the amount of green cards issued each year could potentially
“reduce the number of employed workers 1.2 percent in 2030, 3.7 percent
in 2050, and 5.9 percent in 2070” ​(Cosic 5).
3. Non immigrant visa holders can avoid paying income taxes each year if
they are “are present in the United States for less than 183 days during the
current year” and have not applied for a green card ​(Fishman 5).​ As such,
some who do not eventually receive a green card are exempt from income
taxes.
4. “Foreign-born households provided a net income tax contribution of $61.1
billion in 2012” ​(Tuttle 9)​. By reducing the amount of eligible taxpayers
through the reduction of green cards given, this amount will empirically
decrease.
5. “A study in Arizona found that the state’s immigrants generate $2.4 billion
in tax revenue per year, which more than offsets the $1.4 billion in their
use of benefit programs. Another study in Florida estimated that, on a per
capita basis, immigrants in the state pay nearly $1,500 more in taxes per
capita than they receive in public benefits” ​(National Immigration
Forum 1).

B. Government expenses by the form of healthcare costs with increase


1. “ Public charge adjudications would... [include] Medicaid... Medicare Part
D Low Income Subsidy, the Supplemental Nutrition Assistance Program
(SNAP, or food stamps),[and] any benefit provided for institutionalization
for long-term care at government expense” ​(USCIS 2)
2. A heavily weighted factor that could disqualify one from obtaining a green
card is “having a medical condition and being unable to show evidence of
unsubsidized health insurance, the prospect of obtaining unsubsidized
health insurance, or other non governmental means of paying for
treatment” (​Boteach 7​)
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3. The proposed rule would”likely lead to broad fall offs in participation in
Medicaid and other programs among a broader group of individuals than
those directly impacted by the policy change” ​(KFF 6).
4. “When families lose health insurance, hospitals and doctors lose income.
And some spending would be reduced in other areas as families struggle to
pay food and health costs. Our mid-level estimate shows a potential loss of
$24.1 billion due to the ripple effects of this lost spending... and [a loss of]
up to 164,000 jobs” ​(Fiscal Policy Institute 6).
5. As immigrants — and potentially their family members — forgo Medicaid
coverage, health care providers nationwide would lose Medicaid revenue.
Safety-net providers would be particularly hard-hit, along with providers
that treat high numbers of immigrants...An estimated $68 billion
Medicaid/CHIP spending is subject to the chilling effect of the proposed
rule and therefore in jeopardy ​(Orris et al 4).

Transition: When a decrease in the number of green cards, the government loses a substantial
amount of revenue from a lack of eligible taxpayers. However, it is not just the government that
loses a significant part of their population. Employers and Companies also feel the burden of a
loss of the working population as a result of the law.

III. Increased Burden on Employers and Companies


A. The eligible workforce population will be shrunk.
1. “There are 65 occupations in which 25 percent or more of the workers are
immigrants(legal and illegal). In these high-immigrant occupations, there
are still 16.5 million natives — accounting for one out of eight natives in
the labor force” ​(Camarota 1).
2. “More than 1.4 million people likely to be affected by the public charge
rule have at least some college education, including:More than 220,000
workers in the trade, transportation, and utilities industries.Almost
150,000 workers in the education and health services industries, and more
than 125,000 workers in the professional and business service industry”
(New American Economy 2)​. As such, many of the workers in these
industries may be forced to leave the country if they [have not] received a
green card, resulting in a lack of workers for these industries.
3. Economic ripple effects as a result could range from $14.5 billion to
almost $33.8 billion, while also losing anywhere from 99,000 jobs to
almost 230,000 jobs ​(Fiscal Policy Institute Institute 5).
4. EX: Georgia, “The proposed changes would have a dramatic impact on
Georgia’s economy, creating job losses in the thousands, a dip in
economic activity and a reduction in federal funds flowing to Georgia
between $139 million to $323 million​” (Owens 1).
B. Existing employed workers will have a harder time staying in the country and
keeping their jobs.
1. “The proposed rule would also impose additional costs for seeking
extension of stay or change of status by filing Form I-129 (Petition for a
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Nonimmigrant Worker)”​ (Department of Homeland Security 11157)​.
When companies want to temporarily hire immigrant employees from
abroad and obtain them work visas, there will be more expenses and the
criteria will be higher.
2. “A U.S. employer is going to find it more difficult and much less
predictable to extend the status of a highly skilled worker on an H-1B visa
or to help switch a key recruit from a student visa to an H-1B” ​(Rand 5).
3. “While education and training programs themselves are not included in the
list of public benefits that would count against immigrant applicants, many
participants in training programs depend on other benefits that ​would​ be
counted against them -- such as SNAP or Medicaid -- to be able to persist
and complete their education” ​(Bergson-Shilcock 8).
4. “The total annual income of workers who would be affected by the public
charge rule is more than $96.4 billion. Should they leave the United
States, [this] economy would suffer negative indirect economic effects of
more than $68 billion dollars” ​(New American Economy 2).
5. “Compliance costs could top $1.3 billion over the next decade” ​(Rand 5).
6. “DHS estimates that the additional total cost of the proposed rule would
range from approximately $45,313,422 to $129,596,845 annually for the
population applying to adjust status” ​(Department of Homeland Security
51117).

IV. Conclusion

There are many potential effects that arise if this particular Public Charge law would be enacted.

Although there are some potential positive economic benefits that arise when enrollment in

government assistance programs is reduced, the drawbacks in the form of reduced tax revenue,

increased healthcare spending, and economic costs for companies far outweigh in magnitude.

Essential programs such as Social Security and food stamps wouldn’t be adequately funded if the

money from taxpayers would be decreased due to a reduction in green cards. Companies would

struggle to find enough eligible employees, hurting them financially in the long term. With this

being said, it’s essential for both lawmakers and the presidential administration to holistically

view all of the effects of the Public Charge law, and to make changes not only to benefit the
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millions of aliens living in America, but also to avoid potentially serious economic

consequences.

Mentor Signature Date


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Works Cited

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