Opinion

Reihan Salam

Fixing immigration, but not necessarily the Rubio way

Reihan Salam
Jan 22, 2013 22:44 UTC

In U.S. political debates, there is a tendency to separate economic issues, like taxes, spending and regulation, from social issues, like abortion rights, gay rights and gun rights. Immigration, as a general rule, tends to fall in this latter bucket, as an issue that comes up mainly because it matters to Latino and Asian voters and a handful of vocal immigration restrictionists.

There is a decent case that immigration should really be understood as an economic issue – indeed, as the most important economic issue facing U.S. policymakers. That is part of why Senator Marco Rubio (R-FL) has attracted so much attention for his recent call for comprehensive immigration reform, a call echoed by voices across the political spectrum, including President Barack Obama’s. But Rubio’s plan has been met with considerable resistance, in large part because debates over immigration policy also have a moral dimension. Understanding it is key to breaking out of our immigration impasse. 

But first, it is important to understand why the immigration issue is gaining momentum. Back in 2011, J.P. Morgan released a report that found that U.S. households own $70 trillion in physical and financial assets. This same report found that America’s stock of human capital, i.e., the collective education and experience of all U.S. workers, amounted to $700 trillion. Rather than pouring hundreds of billions of dollars into new roads, bridges and housing units, the surest and cheapest strategy for increasing our collective wealth is to import talented workers. Even as the United States is mired in a sluggish semi-recovery, vast numbers of skilled English-speaking foreigners are eager to settle in, to start  businesses and buy homes. These keen would-be immigrants represent low-hanging economic fruit, a fact that is well understood in Silicon Valley and Wall Street, where high-wattage immigrants have made an outsized contribution.

Among policymakers, there is a growing consensus that the United States should welcome more skilled workers. During the last presidential campaign, Mitt Romney called for granting work visas to foreign students who completed science, technology and engineering degrees at U.S. universities. The problem, however, is that most immigrant advocates don’t want to separate out the effort to increase skilled immigration from the far more contentious cause of giving America’s 11 million unauthorized immigrants, most of whom have modest skills, a “path to citizenship.” President Obama, in keeping with influential immigrant advocacy groups like America’s Voice, has insisted that the United States should only welcome more skilled workers as part of comprehensive immigration reform legislation that also addresses the legal status of the unauthorized.

And so Rubio, who represents a state that has long been a gateway for immigrants, has called for reform that would increase the number of visas for skilled workers, create a guest-worker program aimed at seasonal farm workers, require all employers to check the legal status of potential employees against a federal E-Verify database, and, most controversially, offer law-abiding unauthorized immigrants a path to citizenship. This path wouldn’t be an easy one, as it would require such immigrants to pay back taxes and a fine, and demonstrate some degree of English language proficiency. That said, Rubio’s approach is broadly in line with that advanced by the Obama administration, and indeed by President George W. Bush’s immigration reform effort from 2007.

Somebody find the GOP a carrot

Reihan Salam
Jan 11, 2013 21:47 UTC

As House Republicans gird themselves for battle over the debt limit, they are united by an adamantine conviction that something must be done about federal spending, and soon. The challenge Republicans face, however, is that they’ve become the party of all sticks and no carrots.

Back in 1976, Jude Wanniski, the idiosyncratic supply-side guru, published a short essay arguing that while the Democrats are the spending Santa Claus, bearing promises of more government benefits, Republicans should become the tax Santa Claus, bearing promises of tax cuts. That is famously what happened during the Reagan era.

But as the tax burden on middle-income households dwindled, middle-income swing voters started to care less about taxes and more about the cost of medical insurance, higher education, and a whole host of quality-of-life issues. President Bill Clinton exploited this dynamic by politically championing middle-income tax cuts and tax increases on high earners at the same time, a tactic that has paid dividends for Democrats ever since. Republicans have found themselves defending tax cuts for high earners while offering little if anything to middle-income voters but calls for entitlement reform. Whether or not this stance is defensible on policy grounds, it’s certainly not what Santa would do.

Does Britain’s austerity hold lessons for the United States?

Reihan Salam
Jan 4, 2013 16:16 UTC

The dog’s breakfast of a deal that “resolved” the fiscal cliff fell far short of expectations. In the hours after it passed, deficit hawks at the Committee for a Responsible Federal Budget and the tag team of former Senator Alan Simpson and former Clinton White House chief of Staff Erskine Bowles all expressed disappointment in a bargain that was anything but grand. Senate Republicans gritted their teeth to accept a small increase in taxes on America’s highest-earning households while Senate Democrats made permanent the bulk of the Bush-era tax cuts. A number of tax provisions that hark back to the 2009 fiscal stimulus law were extended, as were unemployment benefits, thus delivering a modest income boost to a large number of low-income households. But the Social Security payroll tax cut, a Republican-backed replacement for the more narrowly targeted Making Work Pay tax credit that was part of the stimulus law, which benefited a wide range of affluent households as well as families of more modest means, was allowed to lapse. Long-term spending levels, meanwhile, were left largely untouched, which is why rebellious House Republicans came close to scuttling the delicately constructed compromise.

One group that offered at least two cheers for the deal were deficit doves, who believe that premature fiscal consolidation poses a grave threat to America’s sluggish economic recovery. Paul Krugman, the prominent economist and popular left-of-center New York Times columnist who never shrinks from apocalyptic pronouncements, was almost pleased to see that the deal avoided any serious spending cuts and that it entailed relatively modest near-term tax increases.

There is a coherent approach to reconciling the concerns of deficit hawks and doves, which has been championed by former Senator Pete Domenici and former Clinton budget director Alice Rivlin of the Bipartisan Policy Center’s Debt Reduction Task Force. Essentially, it entails addressing the federal government’s structural budget deficit — the gap between revenues and spending levels when the economy is humming along at its “normal” pace — while allowing for substantial deficits so long as the economy is in recovery mode.

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