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DHS Shutdown Will Do Less Harm To Economy Than Immigration Amnesty

As Congress comes back into session this week the issue that is looming over them is the budget for the Department of Homeland Security (DHS). Back in December Republicans agreed to fund the government through the end of this fiscal year except for DHS. The DHS budget was only funded through the end of February so that Republicans could use its funding as leverage to block President Obama’s executive actions on immigration. Even though a federal district court has temporarily blocked implementation of the executive amnesty, Republicans should stand firm and refuse to pass a DHS spending bill without strong language to stop the agency from legalizing millions of immigrants.

Back in the fall of 2013 House Republicans stood up to Democrats on the budget leading to a brief government shutdown. Not only did the world not end, but hardly anybody even noticed a change. About the only visible economic damage was caused by the National Park Service closing parks, causing economic losses for nearby businesses who depending on a steady flow of tourists. However, even in that case the people who did not spend money at or near a national park simply spent it somewhere else and no harm was done to the national economy.

In that most recent government shutdown, DHS only sent home 31,295 employees out of their 231,000 total. In simple terms, 87 percent of DHS employees kept right on working thanks to being classified as essential, while only 13 percent were sent home. There is an argument to be made that we need legislation so that agencies without Congressional authorization should actually stop operating (and probably a law to get rid of non-essential government employees), but under current law the reality is that a shutdown will have no noticeable effect on the important duties..of the Department of Homeland Security.

Examples of the parts of DHS that were shut down the last time include research and development of new security screening technology, non-disaster grant programs for state and local governments, and civil liberties training programs for local law enforcement personnel. Does anybody really think we cannot survive without these activities for a few weeks?

In contrast, President Obama’s executive actions on immigration are a step toward two things that will do billions of dollars in damage to our economy. First, providing millions of immigrants with work permits will expand the supply of labor leading to lower wages for all workers. These impacts are likely to hit lower wage workers particularly hard. Second, by removing the threat of deportation (small as it may have been) the amnesty program will lead more immigrants to form families and have children. This will impose enormous costs on state and local governments who provide the vast majority of funding for K-12 education.

There are additional costs in the President’s actions such as the ability of newly legalized immigrants to apply for retroactive tax refunds, including refundable credits such as the Earned Income Tax Credit. The IRS has confirmed the refund eligibility but has not provided an estimated cost. A little quick math suggests the cost will be somewhere in the $5-20 billion range annually with a larger cost possible the first year as newly legalized immigrants can claim back credits for multiple years.

Republicans have every right to not fund agencies that are implementing policies of which the Congress they control does not approve. It is Congress that is supposed to make policy by legislating while the President as head of the executive branch carries out that policy. On immigration, the President is trying to legislate and after so doing he should not be surprised that Congress chooses not to pay the bill for his unauthorized actions. The taxpayers should support the Republicans in blocking funding for President Obama’s executive action on immigration. Amnesty might have an appeal for several humanitarian reasons, but that is no reason that taxpayers and American workers should be stuck with the bill.

Follow me on Twitter @DorfmanJeffrey

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