THE $900 BILLION QUESTION: A Complete Fiscal Analysis Of Donald J. Trump’s Immigration Reform Plan

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THE $900 BILLION QUESTION: A Complete Fiscal Analysis Of Donald J. Trump’s Immigration Reform Plan

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    THE $900 BILLION QUESTION: HOW TO ADDRESS ILLEGAL IMMIGRATION IN AMERICA  A Complete Fiscal Analysis Of Donald J. Trump’s Immigration Reform Plan By Mark McIntosh & Steven Bogden January 2016  Introduction   Mr. Trump’s immigration reform plan has three primary buckets. The first bucket, border security, has core components of building a wall along the Mexican border and rolling back aspects of NAFTA. The second, rule of law, is based around increasing the resources and power of Federal law enforcement. The third bucket, immigration reform is more or less an effort to generate wage inflation by restricting immigration levels and resettling American workers domestically. I. Border Security   The first and most detailed leg of Mr. Trump’s immigration strategy is increasing border security. In his immigration reform white paper “Immigration Reform That Will Make America Great Again” Mr. Trump writes, “A nation without borders is not a nation. There must be a wall across the southern border.” 1   The  primary mechanism in his border security plan is to build a wall. 1. Famously Mr. Trump’s immigration reform plan is based on securing the southern border of the United States by building a wall: “I would build a great wall, and nobody builds walls better than me,  believe me, and I'll build them very inexpensively. I will build a great, great wall on our southern border. And I will have Mexico pay for that wall. Mark my words.” 2   Mr. Trump’s proposal is to build a wall, not a fence, which would be at least twenty times the length of the Berlin Wall built by the Soviet Union in the early 1960s. In order to finance the wall, Mr. Trump has proposed “making Mexico pay for it” by confiscating remittances from undocumented immigrants, who send money to their families, and increasing the cost of visas for both Mexican diplomats and business owners who conduct business in the United States. The length of the border with Mexico is defined by the U.S. International Boundary and Water Commission at 1,954 miles. The length of the land border is 675 miles, while the length of the border along the Colorado River and Rio Grande is 1,279 miles. 3  According to a 2009 Government Accountability Office report, the cost to build one mile of  fencing   at the  border averaged between $2.8 million and $3.9 million. But that figure may be low relative to costs for future sections of the wall. It is based only on the first 220 miles fenced and does not include other factors, such as topography, transportation logistics in harder-to-reach areas (i.e. road-building and earth and drainage work), labor costs, land acquisition costs and surveillance equipment.   The first miles of fencing were in the “easiest places, said Marc Rosenblum, deputy director of the U.S. Immigration Policy Program at the Migration Policy Institute. These were fencing areas in or close to cities and accessible transportation, rather than deep in deserts or mountains. Additionally, the first miles were on public lands, while completing a border wall would require the government to acquire land from 1  Trump, Donald,  Immigration Reform That Will Make America Great Again , Donald J. Trump for President, Inc. Accessed December 19, 2015. Available at: https://www.donaldjtrump.com/positions/immigration-reform  2  Trump, Donald,  President Announcement Speech , Donald J. Trump for President, Inc. June 16, 2015. Available at: http://time.com/3923128/donald-trump-announcement-speech/  3  Gambler, Rebecca,  Border Security: Progress and Challenges in DHS’s Efforts to Implement and Assess Infrastructure and Technology , U.S. Senate Committee on Homeland Security and Governmental Affairs, May 13, 2015. Available at: http://www.hsgac.senate.gov/download/?id=1B897D6C-46BB-45E9-9332-37A5B8970A91    private holders—potentially setting up a situation in which the federal government uses eminent domain to seize property from unwitting American landholders. The GAO estimate for one difficult section of fencing near San Diego, for example, was $16 million. The total cost of the wall, Rosenblum has estimated, would cost between $15 and $25 billion with an annual maintenance cost of nearly $700 million. 4  Immigration experts also say that because much of the property on the southern border is private, Trump would have to consider the additional cost of seizing the land to build his wall, something about which he has failed to speak openly. 5   Fence construction is intended to provide persistent impedance of illegal cross-border activity, which offers Border Patrol agents sufficient time to respond to and resolve threats. The physical stature of the fence affords agents additional cover, making physical assaults against them more difficult to carry out. CBP constructs border fence in locations based on a risk and vulnerabilities assessment of illicit cross- border activity. CBP has completed construction of 653 miles of fencing, as mandated by Congress in the Secure Fence Act of 2006, including 300 miles of Vehicle Fence and 353 miles of primary Pedestrian Fence along the Southwest border. In addition, there are approximately 36 miles of secondary Pedestrian Fence behind the primary fence and 14 miles of tertiary Pedestrian Fence behind the secondary fence.   The total cost to build a fence—not a wall, which Mr. Trump is expecting to build—in place (652.6 miles) is approximately $2.3 billion. CBP was allocated approximately $49 million in Fiscal Year 2015 to maintain and repair fence and gates, roads and bridges, lights, and other TI. This total only includes Border Patrol’s prioritized TI maintenance and repair requirements. This level of funding for maintenance and repair of TI requirements was also part of the FY 2016 budget request.   The need to maintain, repair and replace outdated and aging fencing will continue to be an issue. In addition to the base $49 million requested for fence maintenance, the FY 2016 budget request also  provides funding for CBP to complete the Naco Primary Fence Replacement Project. The project is a high  priority fence project for the Border Patrol and involves removing and replacing an estimated 7.5 miles of existing primary pedestrian fence, addressing vulnerabilities that have been exploited by transnational criminal organizations. 6   2. Mr. Trump proposes to finance his wall by “impound[ing] all remittance payments derived from illegal wages.” 7  In 2013, Mexican immigrants—both legal and illegal—sent $22 billion back to their country of 4  Drew, Kate, “What Trump's immigration wall could cost the U.S.” CNBC.com, October 9, 2015. Available at: http://www.cnbc.com/2015/10/09/this-is-what-trumps-border-wall-could-cost-us.html  5  GAO Staff, “Secure Border Initiative Fence Construction Costs,” Government Accountability Office ,” January 29, 2009. Available at: http://www.gao.gov/new.items/d09244r.pdf  Min Kim, Seung, “Trump’s immigration tab: $166 billion,”  Politico , August 19, 2015. Available at: http://www.politico.com/story/2015/08/donald-trumps-immigration-tab-166-billion-121500; Jens Manuel Krogstad and Jeffrey S. Passel, 5 Facts about illegal immigration in the U.S  , Pew Research Center  . Available at: http://www.pewresearch.org/fact-tank/2015/11/19/5-facts-about-illegal-immigration-in-the-u-s/ Drew, Kate, “This is what Trump’s border wall could cost US,” CNBC  , October 9, 2015. Available at: http://www.cnbc.com/2015/10/09/this-is-what-trumps-border-wall-could-cost-us.html  6  Alles, Randolph, Mark Borkowski and Ronald Vitiello, Securing the Border: Fencing, Infrastructure, and Technology Force  Multipliers , Senate Committee on Homeland Security and Governmental Affairs on , May 13, 2015. Available at: http://www.hsgac.senate.gov/download/?id=420F0C1E-46CA-4C54-A66B-636989CB089A  7  Trump, Donald,  Immigration Reform That Will Make America Great Again    srcin. Considering that around half of Mexican immigrants are here legally, and that legal immigrants earn more money than undocumented ones, it is likely that a large percentage of that $22 billion is derived from legal wages, not illegal ones. But that plan faces multiple issues. “[It] turn Western Union cashier's into de facto immigration officials.” 8   Mr. Trump overstates the amount of remittances from illegal immigrants in the U.S. to Mexico, but he is also ignoring how wire transfers are becoming a smaller part of the process. He is going to have to hope his other plans—including fees hikes on NAFTA worker visas from Mexico—can convince the Mexican government to pay for the wall because remittance blockades will most likely be less restrictive than the theoretical border wall. 9   3. Additionally Mr. Trump wants to finance his proposal increasing fees on all temporary visas issued to Mexican CEOs and diplomats, increasing fees at ports of entry between the United States and Mexico as well as on border crossing cards. 10  About a million people cross the southwest U.S. border in either direction on any given day. Many are small-time traders. “If a fee were put on of, say, $50 per Mexican, many stores along the border would collapse,” said Moreno, the expert from the National School of Anthropology and History. 11  The result of the policies offered by Mr. Trump will most likely reduce trade  between Mexico and the United States. For context, according to the Office of the U.S. Trade Representative, American goods and private services trade with Mexico totaled an estimated $536 billion in 2012. Exports totaled $243 billion; Imports totaled $293 billion. The U.S. goods and services trade deficit with Mexico was $49 billion in 2012. 12   Mexico is currently America's 3rd largest goods trading partner with $507 billion in total goods trade during 2013. Goods exports totaled $226 billion; Goods imports totaled $280 billion. The U.S. goods trade deficit with Mexico was $54 billion in 2013. 13   Trade in private services with Mexico (exports and imports) totaled an estimated $42 billion in 2012 (latest data available). Services exports were $27 billion; Services imports were $15 billion. The U.S. services trade surplus with Mexico was $12 billion in 2012. Mexico was the United States’ 2nd largest goods export market in 2013. U.S. goods exports to Mexico in 2013 were $226.2 billion, up 4.7% ($10.2  billion) from 2012, and up 132% from 2003. It is up 444% since 1993 (Pre-NAFTA). U.S. exports to Mexico accounted for 14.3% of overall U.S. exports in 2013.The top export categories (2-digit HS) in 2013 were: Machinery ($38.5 billion), Electrical Machinery ($36.7 billion), Mineral Fuel and Oil ($23.0  billion), Vehicles ($21.6 billion), and Plastic ($15.3 billion). U.S. exports of agricultural products to Mexico totaled $18.1 billion in 2013, the 3rd largest U.S. Ag export market. Leading categories include: corn ($1.8 billion), soybeans ($1.5 billion), dairy products ($1.4 billion), pork and pork products ($1.2  billion), and poultry meat (excluding eggs) ($1.2 billion). U.S. exports of private commercial services* 8  Vinik, Danny, “Donald Trump’s imaginary immigration haul,”  Politico , August 8, 2015. Available at: http://www.politico.com/agenda/story/2015/08/donald-trumps-imaginary-immigration-haul-000202  9  Primack, Dan, “Donald Trump’s plan to pay for Mexico border wall has a tech problem,”  Fortune , August 17, 2015. Available at: http://fortune.com/2015/08/17/donald-trumps-plan-to-pay-for-mexico-wall-has-a-tech-problem/  10  Trump, Donald,  Immigration Reform That Will Make America Great Again   11  Johnson, Tim, “Trump migrant proposals could be ‘catastrophic’ to both U.S., Mexico”  McClatchyDC  , August 17, 2015. Available at: http://www.mcclatchydc.com/news/nation-world/world/latin-america/article31335389.html#storylink=cpy  12  Office of the United States Trade Representative, “Mexico.” Available at: https://ustr.gov/countries-regions/americas/mexico  13  Ibid.
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