May 10 (Bloomberg) -- Robert Liang and his wife, Alice, are living arguments for backers of an immigration-law revision: Though undocumented, they’re hardworking small-business owners who don’t want government help. The immigrants from Taiwan also embody an argument for its opponents: They’re older than 50.
Some 11 million undocumented workers would pay taxes to support government health and retirement programs if a rapidly aging nation gives them citizenship, advocates say. Yet a study by Princeton University researchers suggests a hidden cost. The newest Americans from Mexico, it found, are sponsoring older family members at a rate 16 times greater than such households did when the U.S. last rewrote immigration laws in 1986.
The trend of naturalized citizens sponsoring older parents for U.S. residency may offset some of the presumed payoff of turning millions of undocumented workers into legal taxpayers, according to the study. Some of those family members would be eligible for Medicaid, whose rising costs are part of the debate over U.S. fiscal solvency.
“I understand the economic benefits,” said Marta Tienda, a co-author of the report, presented last month. “But we have to be really up front about what it’s going to cost us.”
The Princeton study only attempted to measure the number of newcomers who are sponsored by naturalized citizens; it didn’t put a price tag on absorbing an increasing number of older immigrants.
The Congressional Budget Office said in a May 2 letter to House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, that it hadn’t completed an analysis of proposed legislation debated this week in Congress.
The CBO estimated in 2006 that changes similar to those being considered would have increased spending by $53.6 billion during a 10-year period in categories including Medicaid, the state-federal health-insurance program for the poor and disabled.
At the same time, the CBO said, the legislation would have brought in a surplus of $65.7 billion through income and Social Security taxes, yielding a net surplus of $12.1 billion. The agency estimated the immigration measure would have increased gross domestic product 0.3 percent to 0.4 percent from 2007 to 2011, and 0.8 percent to 1.3 percent from 2012 to 2016.
The Princeton findings were echoed in part of a report released this week by the Heritage Foundation, a nonprofit research organization led by former U.S. Senator Jim DeMint, a South Carolina Republican and Tea Party leader. The foundation warned in its report that many older immigrants “would be poor and heavily dependent on taxpayers.”
A report last month by Business Forward, an advocacy group whose sponsors include Microsoft Corp., Citigroup Inc. and Wal-Mart Stores Inc., said contributions from undocumented workers make up almost 10 percent of the Social Security trust fund. The funds, which provide retirement or disability benefits to more than one in four U.S. households, are slated to begin running out of money in 2033. Medicare trust funds are on pace to run empty by 2024, according to a report last year by the trustees.
“We have to consider both sides of the equation,” Nikhil Joshi, research director for the Washington-based group, said in a telephone interview. “Immigrants tend to be younger and healthier than natives, and that will help us push those costs down.”
Even so, Joshi acknowledged that “immigration reform can have unintended consequences. The stakes for getting it right are huge.”
The percentage of new legal permanent immigrants who are older than 50 has risen during the last quarter century, especially among newcomers from North America and Asia, according to Department of Homeland Security data analyzed by the Princeton researchers.
The percentage of older Asian immigrants has increased about 42 percent since 1985. About one in five of the 1.6 million Asian immigrants admitted from 2006 to 2009 were older than 50. Asians were the fastest-growing racial group in the U.S. in the last decade.
The rate for new North American residents, mostly from Mexico, the U.S.’s largest source of immigrants, rose even faster. The percentage of North American immigrants older than 50 has more than doubled since 1985. Almost 17 percent of the 1.5 million immigrants admitted from 2006 to 2009 were older than 50, the researchers said.
In examining migration patterns among families, the Princeton researchers found the number of Mexican relatives older than 50 who were sponsored by naturalized citizens grew 16 fold from 1986 to 2000. The average naturalized citizen from Mexico sponsored 1.12 older family members in 2000, up from 0.07 in 1986.
The report also found significant increases in parental sponsorship from 1991 to 2000 for new citizens born in China, India and the Philippines. The study only tracked those records up to 2000 because it typically takes a decade or more for a new arrival to become a naturalized U.S. citizen eligible to vouch for family members.
People born in Mexico sponsored 6.4 family members per naturalized citizen, the highest rate of any country in the study.
Naturalized citizens from China sponsored an average of two family members older than 50, and a total of 6.2 people each. People born in India or the Philippines sponsored 5.1 total family members, with an average of 1.7 older than 50.
The dilemma raised by the Princeton research has its roots in a 1965 immigration overhaul championed by the late Senator Edward Kennedy, a Massachusetts Democrat. The 1965 law, enacted the same year Congress created Medicare, the federal universal health-insurance plan for the elderly, allowed naturalized citizens to sponsor immediate family members.
At the time, immigration reform was supported because it was expected to bring more Europeans to the U.S. Asians, who now make up about 5 percent of the population, constituted roughly 1 percent of the U.S. total then.
Kennedy’s brother, then-Attorney General Robert Kennedy, said in congressional testimony that about 5,000 Asian immigrants would arrive in the first year, “but we do not expect that there would be any great influx after that.”
The assumptions were based on “sentimental myopia or factual naiveté,” wrote Tienda, the Princeton study co-author and daughter of an undocumented worker.
In 2012, a record 33.7 million Hispanics of Mexican origin lived in the U.S., including 22.3 million born in this country, according to an analysis of Census data released May 1 by the Pew Research Center. Among them are children of immigrants who are eager to reunite with family members deported under current law.
Bianca Rojo, 22, who was born in San Francisco to undocumented Mexican immigrants, has lived apart from her parents since the age of 16, soon after they were denied asylum and deported to Mexico.
When she turned 21, Rojo, who lives in Richmond, California, with her two younger brothers, applied to sponsor their parents to return to the U.S. With the help of a grandmother, she’s seeking a waiver to allow her parents to reenter the country.
“It’s been very hard, not just emotionally hard but also physically and mentally draining,” Rojo said. “I still have to worry about how am I going to get to school. Are we going to be able to afford to buy food?”
Liang and his wife, the immigrants from Taiwan, are hoping their eldest son, a native-born American, will be able to sponsor them for permanent residency in the U.S. now that he has turned 21. The couple, who own two Chinese vegan restaurants in the San Francisco Bay area, have been allowed to stay through the intercession of Senator Dianne Feinstein and the late U.S. Representative Tom Lantos, both California Democrats.
“The most important thing is that our whole family can stay together in the U.S.,” said Liang, 55. “I do not want to be a burden on the U.S. government.”