American Enterprise Institute

March 27, 2006

[Edited transcript from audio tapes]

8:45 a.m.	Registration and Breakfast
9:00	Discussants:	Michael Barone, U.S. News and World Report
		Michael Barrera, United States Hispanic Chamber of Commerce Steven Camarota, Center for Immigration Studies
		Daniel T. Griswold, Cato Institute
	Moderator:	Roger F. Noriega, AEI
10:30	Adjournment

Proceedings:

Roger Noriega:  Good morning, everyone.  Thank you for coming.  It is obviously a timely topic, and we are glad to have you all here and we want to thank our panelists for joining us.  And before I forget, let me thank my research assistant, Megan Davy for the work she has put into this, putting this event together and planning our work on immigration here at AEI.

First, let me give you a quick review of current events.  You are probably imminently familiar with these issues.  In January of 2004, President Bush opened the debate by proposing a three-pronged approach to immigration, one that includes border security, interior enforcement, and a guest-worker program.  The 109th Congress saw two major immigration initiatives:  The Cornyn/Kyl and the McCain/Kennedy bills.  Both had varying forms of guest-worker programs, most notably the McCain/Kennedy program included a path to earning permanent legal status in the United States, while Cornyn and Kyl’s originally did not.  Moreover the Cornyn and Kyl bills had a serious stronger emphasis on border and interior enforcement. 

In a rather quick turn of events in December 2005, the U.S. House led by Chairman Sensenbrenner of Wisconsin passed a quite different piece of legislation.  This one included no guest-worker program and included provisions for a 700-mile wall, the criminalization of those who aid undocumented immigrants, and increased work-site enforcement.  Senator Specter had taken the lead on reconciling the Cornyn and Kyl and the McCain/Kennedy bills for a series of mark ups. 

This was moving slowly until Senator Frist, the Majority Leader, announced on March 16th that he would propose his own version, one focusing on border security and interior security and lacking any guest-worker program.  He has given Senator Specter and the rest of the judiciary committee until today to release its version of an immigration reform measure, otherwise, he says that he will take his bill to the floor.  Senator Reid almost immediately responded that the Democratic bench would not allow legislation to move forward in the Senate that did not include comprehensive reform including quite particularly a guest-worker program.  Previous drafts and speculation by close observers suggest that a Senate Judiciary Committee draft, if one that is produced today, might include most of the border and interior enforcement provisions outlined in the Cornyn/Kyl bills while including a guest-worker program in line with that proposed by Senator McCain and Kennedy and advocated by President Bush. 

Very, very briefly on some public attitudes that were informing this debate and from a recent Zogby International poll, nearly two-thirds of Americans, 62 percent in fact, say they would prefer that their Congressman support more restrictive immigration regulations.  Fifty-seven percent of Americans support the idea of a U.S. economic development plan to help build Mexico’s economy in exchange for more restrictive immigration regulations here in the United States.  Majorities in both nations oppose the US proposal to build a wall along the US-Mexico border, 69 percent of Americans opposing the wall and 90 percent of the Mexicans. 

More Americans - this is interesting - 78 percent see Mexicans as hardworking than they see Americans themselves, 56 percent.  In an indication that respondents in both countries understand the growing immigration of their economies and societies, both agree that they should learn one another’s language.  Among Americans 79 percent said that most important language to learn would be Spanish, and I’m sure they have no intention of actually learning Spanish, but they believe it is very important if someone who were to want to learn a foreign language, and 80 percent of the Mexicans said that it would be important to learn English. 

Key questions before us, Senate, House, this panel, what are the costs and benefits of immigrants to the United States and how should these affect our immigration reform?  This certainly includes the question of whether or not any comprehensive reform would be workable without a guest-worker program or whether, as a matter of fact, such a program would be rewarding and even perhaps inviting abuse of our laws. 

Another central question is what sort of border and interior provisions we should pursue, if we decide that a guest-worker program is the way to go, what should it look like?  Should participants be able to apply for the program from the United States, or should they have to return home to apply from their home countries?  How large should such a program be, and should participants eventually be eligible for a legal permanent residence in the United States?  And what do we do with the estimated 12 million undocumented immigrants who are here in the United States today? 

To begin to answer those questions we have assembled a very good panel to inform us not only of the facts informing the debate but their own ideas on how we should approach it.  I’m going to introduce each of the panelists just before they speak.  And our first speaker will be Michael Barrera, who was named President and CEO of the United States Hispanic Chamber of Commerce on June 19, 2005.  Prior to his selection, Mr. Barrera was the National Ombudsman for the United States Small Business Administration, having been appointed to the position by President Bush in 2001.  Mr. Barrera is an accomplished lawyer and business leader and a co-founder of two law firms in Kansas City, Missouri.  Those of us from Kansas know that Kansas City, Missouri is a small suburb of Kansas City, Kansas.  This firm is focused on general, civil litigation, small business start-ups, workers’ compensation, criminal defense and personal injury.  Mr. Barrera, please.

Michael Barrera:  Good morning, everyone.  First, I want to thank AEI for inviting us here today to this very important subject as you know that is being debated today.  And there is going to be a lot of things coming out, and I think the most important thing that we can get out on this is to be calm, constructive, and open to ideas that are going to be coming out today because I do not think anyone is going to get everything that they want in this bill. 

It is so important that we start listening and be constructive in our conversations on this particular issue that is very, very emotional.  It is a very, very emotional issue that needs to be addressed with logic because I have always found that when you have people that are dealing with the very emotional issues and people take extreme sides on those emotional issues, you get nothing done.  All you do is inflame more emotions and you do not get to a solution.  So I think that, and putting that in context, is how we would like to be able to address this today. 

Now immigration has a lot of impact on us.  Not just economically but on our culture, politically and of course economically.  First, I would like to start out by thanking everybody for coming here today and my fellow panelists because it is important that we hear different types of attitudes and hear different types of opinions from people, and form your own opinion on these particular issues.  Right now we all know some of the economics that we have been able to gather.  Immigrants have a great economic impact on this country and they have a lot to do with our economic growth. 

A lot of folks were saying that immigrants are taking away jobs.  But, as the old saying, numbers do not lie.  The Bureau of Labor statistics just came out, that two million jobs were created in the last year.  Two-thirds of those jobs were higher paying jobs.  Five million jobs were created since 2003.  So there are jobs being created and these are not just jobs that people do not want to take.  These and a lot of jobs are higher paying jobs. 

Right now when people talk about some of the jobs lost that have happened in this country, and when we remember along the same arguments came out about the argument about outsourcing, some of the jobs that had been lost had been due to outsourcing.  But a lot of jobs that had been lost, particularly lower paying jobs, had been lost due to technology.  How many can go to a grocery store - now you can check out your own groceries.  That is technology.  That causes some people to lose jobs.  How many times can you go to a gas station now and pump your own gas?  There are a lot of these types of jobs now that technology has taken over a lot of the jobs that people normally used to do, and outsourcing had something to do with that. 

Additionally, productivity, the American worker has become much productive and with increased productivity, that also decreased the need for some of these different jobs, and 9/11 had a lot to do with a lot of this.  Since 9/11 people became more productive, have used technology more and that has had a lot to do with the some of the job loss that people like to blame it on immigration and the numbers just do not support that. 

Recently we do know that immigrants, and you heard the arguments, they take jobs that no one else will take.  They recently ran ads in California, in 58 different counties in California, asking for agricultural workers.  Not one U.S. citizen applied for the jobs because these are jobs, these are backbreaking jobs that will need people to actually do.  You talk to agricultural community and many people said, “Why do you not start using more machines?”  Many of our fruits and produce that we get, we want fresh produce that is not bruised.  As Americans we are very picky about our food and you actually need workers, actually people, to actually pick that fruit, pick that produce to bring that to the market and that is what we demand. 

A lot of folks if we start to take away all these workers we are going to outsource our food.  We are upset by outsourcing jobs, how do you like to have your food outsourced, to have other people from other countries sending in their food?  I do not think we want that when we can have people here working to actually bring that food to the market.  So it is important that the immigrant workforce is important and is an important need to our economy.  Some of the other numbers, right now the US economy will have three million jobs short in the next few years.  [indiscernible] did a study that immigrants have a $970 billion impact on our economy. 

And immigrants are not just workers, they are also entrepreneurs.  Right now, look at some of these entrepreneurs that come in as immigrants.  Oscar de la Renta was an immigrant.  Andrew Grove, the founder of Intel, from Hungary, was an immigrant.  Levi Strauss who invented jeans was an immigrant from Germany.  You also have Gloria Estefan, immigrant from Cuba, has actually kind of helped change Latin music here in the US.  Larry Page and Sergei Brin, inventors of Google, immigrants.  Ed Banigan [phonetic], anybody here from New York, have you seen the signs called 1-800-Mattresses, that is an immigrant from Ecuador who does now a $100 million a year in sales for mattresses and this employs 350 people. 

So immigrants are not just job takers, they are job creators.  For Hispanic businesses right now [indiscernible] just came out with some statistics.  Hispanic businesses grew three times the rate of the national average.  Latino owned businesses grew six times the rate of the national averages.  In a year, one out of every 10 business will be a Hispanic-owned business.  In a recent study by Arizona State University, results show that one out of three Hispanic businesses owners were born outside the US, and 76 of those businesses were family-owned businesses. 

We all know that small businesses make up 98 percent of all businesses here, and as I said, one out of every 10 businesses in a couple of years will be a Hispanic-owned business.  Right now Hispanic businesses generate $300 billion a year and there is an estimated two million of them now.  By 2010 there is an estimated three million Hispanic-owned businesses to generate $465 billion a year. 

Let’s talk about the Hispanic consumer.  Today the Hispanic consumer spends $720 billion a year.  They are bigger than the GDP of Mexico, bigger than the GDP of Canada.  It is the second biggest economy in this hemisphere, and 40 percent of the Latino market right now is immigrant.  Not only that, immigrants, right now our market is young.  Over half of the Hispanic market now is under 27 years old.  That is a young market that many people want to access.  Eighty-four percent of undocumented immigrants are 18 to 44 years old, in their prime spending years.  Do we really want to take that out of our market right now?  That is versus 60 percent of legal residents and that is not our stat that is Business Week’s stats. 

As much as half of all the US retail banking growth is expected to come from immigrants over the next decade, and that is the step by the FDIC.  We also want to blame immigrants for everything there is, including the healthcare cost going up.  Let’s talk about healthcare, let’s talk about social security.  Right now, according the Social Security Administration, immigrants are now providing the system with the subsidy of $7 billion dollars a year in Social Security taxes.  We have heard all the arguments that Social Security is ready to go bankrupt.  In two years, 77 million workers will now start entering Social Security.  Right now, as far as Social Security goes, you will think about the American worker. 

When Social Security first got started, the average age was not as long as it is now.  Right now the average age is two or three years longer than it used to be before Social Security got started.  And people are making higher wages, so that is more Social Security that is going to be owed to our retirees.  And many of us right now, as we all know, that Social Security is not what you put into it, it is what your current workers are putting into it. 

In 2015, again these are not my statistics, these are Social Security’s, 2015 the system goes in the red.  In 2040 it is going to go bankrupt.  Who is going to pay for all this?  Right now we got a subsidy from a lot of these immigrant workers who are doing that.  Right now immigrants pay $1.5 billion to Medicare payroll taxes and receive only half of those. 

Immigrants are not swamped [sounds like] in the US Healthcare System as less than, and far less use it than native-born Americans and that is the American Journal of Public Health that says this.  Thirty percent of the immigrants use no healthcare at all during the course of the year.  Immigrant children spend about $270 a year versus a $1,059 for native-born children and most immigrants do have health insurance. 

Immigrants right now, they do not just contribute to our economic diversity, they contribute to the diversity of this country as a whole.  They contribute to the diversity of ideas, to diversity of thoughts, the diversity of bringing new products to the market.  And it is important that we realize that because think about a lot of these immigrants.  A lot of them will go home, and right now we are so concerned about Latin America right now.  Many of these countries are going further left. 

And think about that these immigrants coming here and learning about our US values, learning about the values of entrepreneurship, the values of ownership, the values of capitalism, and the value of the US.  They take these ideas back home.  It is almost like having our own natural ambassadors that can go back and start teaching their folks that are these countries how we do business here and that we can start working with them a lot better.  When you think about immigration, I can compare it and to a certain some extent, it is not much different the way prohibition was in the ’30s.  When you think about that, that was a very, very emotional issue.  And we tried to outlaw alcohol. 

And again, this is just an analogy, what happened when that occurred?  It spurred a lot of crime.  It spurred organized crime, it spurred a lot of speakeasies and normally law-abiding citizens were deemed criminals for taking a drink.  And what we are doing now is really criminalizing a lot of people for just trying to help our economy.  Some of the bills out there right now would criminalize churches.  Some of the bills out right now would criminalize small business. 

Many people say that immigration is the help to big business.  That is so untrue.  I worked for the Small Business Administration and many of these businesses do rely on immigrant workers but they not only rely on the workers they rely on them as consumers.  So when we take out these consumers, these workers and these businesses themselves, you are taking out more than just workers.  Again, this is a very emotional issue that needs serious solutions and people really thinking about it.  [indiscernible] issue and listening to your questions and I hope we can have a very constructive conversation about this.  Thank you.

 Roger Noriega:  Thank you very much Mr. Barrera.  Dr. Steven Camarota is Director of Research at the Center for Immigration Studies in Washington D.C.  Dr. Camarota often testifies before Congress and is published widely on the political and economic effects of the immigration on the United States.  His most recent publications with the Center for Immigration Studies include the High Cost of Cheap Labor, Illegal Immigration and the Federal Budget, and this week he released a new paper titled, Dropping Out: Immigrant Entry and Native Exit from the Labor Market, 2000-2005.  Dr. Camarota.

 Steven Camarota:  Well, thank you AEI for inviting me.  I would say that there is old money Monty Python skit where they start out by saying, “And now for something completely different.”  Well, as you might guess, in comparison to my other panelists I have something very different to say. 

Let me start by talking a little bit about national security.  Right now, the immigration service gives out a million green cards a year.  That is permanent residents, you can stay as long as you like and become a citizen if you choose and by everyone’s account, if the system is currently completely overwhelmed with its efforts to process and [indiscernible] a million green cards a year.  They have a backlog right now.  Without an amnesty, without an increase in green cards of four million applications for green cards and asylum and various forms of adjustment of status, we have 400,000 people who we have ordered deported.  They have had their day in court but we never made them leave because we do not even follow up our deportation orders. 

Everybody looks at this, the General Accounting Office, the Congressional Research Service, everybody, the Congressional Budget Office and everyone in the agency, I might add, who actually does the work of the agency, recognizes the system is overwhelmed … but our report but only just one.  You can find dozens on the web that basically say similar things, found that the crush of work has created an organizational culture wherein, staff are “rewarded for the timely handling of petitions rather than careful scrutiny of the merits.” 

The pressure to move things through the system has led to, according to GAO, “rampant and pervasive fraud.”  One official estimate that 20 to 30 percent of applications right now involve some fraud.  The GAO concluded the following:  The goal of providing immigration benefits - that is the green cards and citizenships and so forth - in a timely manner to those who are legally entitled to them may conflict with the goal of preserving the integrity of the legal immigration process. 

Now, does this sound like an agency that can handle millions of additional applications and at the same time weed out criminals and bad guys?  No one, there is an absolute consensus for the people who actually do the work at the agency, will tell you, especially when the microphone is off but even sometimes when the microphone is on, the union reps will say it that there is no possibility that we may be able to handle this kind of workload, absolutely impossible.  I guess the answer is we will outsource it.  We will create a parallel structure.  This is an agency that by everyone’s account has an enormous problem managing every kind of contract that has ever had as well. 

Now that is an agency that is going to handle all this?  Consider the last amnesty.  One of the people who got amnesty last time was Mahmoud Abu Halima.  Abu Halima helped lead the attack on the Trade Center in 1993.  It was only after he got his amnesty back in ’86 that he then made several trips to Afghanistan where he received the terrorist training, but he then came back and used in the attack in 1993.  Now, Mohammed Salameh, who rented the rider truck in the attack in 1993, he actually applied for the same amnesty.  He, too, was a cab driver.  He, too, applied as a seasonal agriculture worker.  Now Abu Halima was just a little better liar and he got his amnesty so Salameh, he did not.  Well, that would good news, that we sort of weeded out a bad guy there. 

But then, as now, there is no system in place to make people who are turned down for green cards or guest workers or student visas to leave the country, so he just continued to stay and work in the United States and eventually took part in the attack in 1993.  So the idea that we are going to weed them out, you are asking the bureaucracy to do something it cannot do and never does.  It did not do it then and it does not do it now.  As I have said, we have 400,000 people who have been ordered deported and we have not made leave.  These are people not just been turned down for applications but they have been told by a judge to get out of the country and we do not make them leave. 

So any notion that we are going to somehow weed out the bad guys and enhance our security is silly on its face, and legalizing someone, a terrorist or a criminal, is a much worse situation than having them here illegally because now they can work at any job they want, they could get hazardous materials licensed if they choose.  They will have government-issued ID.  They will be able to travel to and from the United States.  Legalizing illegal aliens will not weed out the bad guys but will only certainly assist those who mean us harm. 

Now, let me, also in addition to National Security, talk about some of the other issues.  One of the biggest problems with advocates of increased legalization and amnesty for illegal aliens is that it ignores two fundamental problems with the illegal immigration - the cost. 

Let’s talk about fiscal cost.  The reason that illegal aliens create a fiscal cost is not their legal status.  And it is not because they came for welfare and it is not because they do not work.  Rather, the fiscal cost associated with illegal immigration reflects their educational attainment.  In the modern American economy, people with very little education do not make much money and do not pay much in taxes regardless of legal status.  Sixty percent of illegal aliens are estimated to have not even completed high school and fairly 80 percent, a total, have no education beyond high school. 

The National Research Council in ’97 estimated that an immigrant who comes in to the United States with less than a high school degree during the course of his whole lifetime will use $89,000 more in taxes, more in services than he pays in taxes, a net fiscal impact of $89,000.  One with only a high school education will create a net fiscal drain of $31,000 during his lifetime.  Again this situation does not resolve from the fact that people do not work, that is not the problem.  We have a whole means tested programs designed specifically that benefit whom?  Low-income workers with children, a very large share of immigrants are precisely that. 

Legalization only makes the problem even worst.  Nearly half of Households headed by illegal immigrant who has not completed high school use at least one major welfare program.  Right now I have estimated, and my colleague actually cited a lot of my own numbers on what illegals pay in taxes to the Social Security Administration and to Medicare.  I estimated total that illegal aliens currently pay about $16 billion in taxes but they use about $26 billion in services for a net deficit of about $10 billion.  This is just at the federal level. 

If we legalize them and they began to pay taxes and use services like legal immigrants with the same level of education, the net fiscal cost will go up to about $30 billion because now people would be eligible.  Consider the earned income tax credit.  Right now, I estimated very few illegal immigrants get that program.  It is for low-income workers, mainly those with children.  If we legalize them and began to have the kind of income of legal immigrants with the same level of education, the cost of that one program would grow tenfold.  But keep in mind that occurs because they work, not because they are sitting on the backsides.  That is an important point.  Bringing large numbers of unskilled people is simply incompatible with the modern American economy and our well-developed welfare state, neither of which seem likely to go away anytime soon. 

Let me talk about another issue of labor market competition.  Legalizing illegal aliens does not solve this problem.  Wages for workers with relatively little education, native-born Americans without a high school degree or those with only a high school degree and no additional schooling have actually been declining.  It went up a little bit for part of the 90s after a long decline, and then they are back down again.  Perhaps most troubling, the share of natives 18 to 64 without a high school education holding a job declined from 53 percent in 2000 to 48 percent in 2005.  The share of adult natives, again 18 to 64, who have only a high school education declined from 75 percent to 70 percent, and the share of native-born teenagers with a job declined from 30 to 24 percent in the same period. 

What is happening is all of the net gain in employment is going to foreign-born workers, and natives are leaving the labor market.  Unemployment is also up but a very large share have given up looking for work, or at least that is what they report to the government.  So the idea of a national unemployment rate of five percent being the key factor to look at, unemployment among natives with less than a high school education is 14 percent.  Unemployment among native-born construction workers is 11 percent, unemployment among natives who do hotel and restaurant kind of work is around 10 percent.  They are the more pertinent statistics.  And some people say, “Well, immigrants only do jobs native do not want.” 

Well, first off, there is no such thing.  There are two reasons why that is.  Obviously the benefits and pay of a job matter a whole lot.  I would pick strawberries for $200,000 a year, so the idea that there is no job, that you cannot ever find anybody.  That is silly, of course.  No economist would take that argument seriously.  Moreover, if you look at the detailed occupational categories, all 473 of them, there is no such thing as a majority immigrant occupation.  Most of the people who clean toilets in America, the vast majority are native born; most of the people who are nannies and busboys, native born. 

What you really have is a situation when more educated and affluent Americans say, “Immigrants only do jobs,” or illegal aliens in particular, “only do jobs that Americans do not want.”  What they really mean is that as a more educated and affluent American, “They do jobs that I do not want.”  Bottom line, and maybe this will help you think about it, six percent of lawyers in the United States are foreign born and eight percent of journalists, whereas half or a third of construction laborers and a third of maids are foreign born.  If journalists and lawyers face the kind of job competition that construction laborers and maids face in this country, the issue would change immediately. 

And that is why polls of most Americans find that they would like to see the law enforced rather than allowing illegal aliens stay and support for increasing immigration, which is the kind that Specter and McCain want to do.  They want to double the number of green cards or increase it by about 800,000 a year from a million, and they also want to create a new guest-worker program, and then they want to legalize the 12 million here.  The number of Americans who respond in surveys, especially those with relatively little education and they are poor who will say they like to see an increase of this kind in immigration, is very tiny. 

So what do we do?  Well, often we are given a false choice between mass deportations or mass amnesties coupled with increased legal immigration.  But there is a third way and it is attrition through enforcement and this was the thinking behind the bill passed by the House of Representatives in December.  The House realizes that mass roundups of millions of people are neither politically likely nor practical.  The House also seems to understand that mass amnesties only mock the law-abiding and make legal immigrants look like fools for having played by the rules.  And it can only spur more illegal immigration. 

Besides, we have tried it before.  In 1980s we actually legalized 2.7 million illegal aliens and legal immigration since the ’80s has roughly doubled but we still have three times as many illegal aliens.  A strategy of attrition through enforcement is both realistic and avoids the problem of illegal immigration and all the problems, such as I said, labor market competition and the fiscal cost by making the illegal aliens go home. 

How do we do that?  The goal is to increase the number who go on their own each year.  The Immigration Service estimates about 165,000 illegal aliens go home on their own each year; about 50,000 are deported and about 25,000 die.  But many more than that come in so you have a net increase in the overall size.  If America becomes less hospitable to illegal aliens, many more will simply decide to go home on their own.  For this reason, the House bill requires that all hires be checked against the database to make sure that the person is legally allowed to work in the United States.  It also increases penalties for employers who not only hire illegals. 

Of course, we have to make sure that the rules are enforced.  In 2004 only three, I’ll say that again, only three employers were fined for knowingly hiring illegal aliens.  We allow 500,000 people in this country to use Social Security numbers of all zeroes [sounds like] and there are more in New York City transit cops than there are on border patrol agents on duty at any one time.  So anyone who says, “Oh, we tried to enforce the law and failed,” that is, of course, absurd on its face.  We never tried, as evidenced by the statistics. 

Although it does not go far enough, the House bill also requires more cooperation between the immigration service and local law enforcement.  It adds more agents and fencing to the border.  At present, less than four percent of the southern border is fenced right now.  Obviously that has to go up a lot.  Unfortunately, the bill does not require the IRS to stop accepting bogus Social Security numbers nor does it roll back regulations that make it easy for illegal aliens to open bank accounts or get tax refunds.  In 2002 the IRS itself in an internal report, which is available online, estimated that about $11 billion was paid out to illegal aliens in tax refunds because the way it works is that you just have to send in your form with the tax ID number, which they give you and you put that along with your bogus number and then they will give you your money back. 

Attrition through enforcement is really the only option if we want to solve our illegal immigration problem.  Implementing such a policy will save taxpayer’s money, help American workers at the bottom end of the labor market, improve national security and restore the rule of law.  Thanks.

 Roger Noriega:  Thank you very much.  Our next presenter is Daniel T. Griswold, who is director of Cato Institute Center for Trade Policy Studies.  Since joining Cato in 1997, he has authored and co-authored major [indiscernible] in globalization, trade organization, the US trade deficit, trade and democracy, immigration, and other subjects.  Mr. Griswold’s October 2002 paper, Willing Workers:  Fixing the Problem in Illegal Mexican Migration to the United States, was used in framing the Flake-Kolbe- McCain Immigration Bill in 2003, which President Bush draw upon in early 2004 as the basis for his guest-worker program.  Mr. Griswold.

 Daniel Griswold:  Thank you very much, Ambassador, and AEI for holding this event.  It could not be more timely, could it?  And yet this debate is timeless.  Americans have been ambivalent about immigration pretty much since day one, a lot of anxiety about all those Germans coming over in the 1700s, early 1800s.  Of course the wave of the new immigrants, the Italians, and the Russian Jews and the Austro-Hungarians, they were considered a different race and believed to be a not able to assimilate into the United States and, of course, they are part of the fabric and the middle class of the United States. 

So in that sense there is really nothing new on the table today.  America was actually more of an immigrant nation 100 years ago.  If you look at the rate of immigration, we talk about everything else as a rate - the unemployment rate, the poverty rate, the birth rate.  If you look at the immigration rate today, legal and the illegal immigrants account for, we have about five immigrants per thousand U.S. population per year.  If you go back a century ago during the great migration it was over 10. 

So in other words the immigration rate a hundred years ago was twice what it is today.  The percentage of Americans who were foreign born a century ago was over 15 percent, it is about 12 percent today, it is rising but still below that.  We are comfortably within the norms of the American experience in terms of immigrants as a share of our economy.  And immigrants, as you have already heard, are an important part of our free enterprise economy, they fill niches in the labor market, not where there are no Americans but are not enough Americans to fill the demand for the job that happens on the high end but most controversially today on the low end. 

Immigrants allow the U.S. labor force to grow at a steady rate.  Over the last century our population has grown about 1.1 percent per year.  We are below that right now but immigration has allowed us to maintain that, and I think immigrants give us an edge in the global economy over, say, Japan and Western Europe, which are facing a demographic implosion.  If you think about the problems we have today I think those problems are even greater.  The National Academy of Sciences that Steven mentioned, that study found that immigrants were “a significant positive gain” to the U.S. economy.  There is no evidence that immigrants lower wages for Americans overall or take jobs from Americans overall. 

Let’s talk about the illegal immigration challenge, and I think to understand how we solve this problem, we first have to understand how we got into this problem of large-scale illegal immigration.  Like so many things, it is demand and supply.  There are two powerful economic and demographic trends working in America today that are creating this flow of illegal immigration and they are colliding with our immigration system and as usual, reality is winning out. 

On the demand side we have a high-tech economy that is creating good jobs on the higher end but it continues to create hundreds of thousands of lower skill jobs every year.  We all know what these jobs are, in landscaping and construction, and retail and various service industries.  According to the Department of Labor, of the top 20 categories in terms of total job growth, 14 of them require relatively low skills and education, and over the next decade our economy is going to add a net five million jobs in these lower-scale categories.  At a time when the pool of Americans willing and happy to take those jobs continues to shrink, I will vouch for the fact that we are getting older.  By the end of the decade, the median age of the American in the workforce is going to be 41-and-a-half years.  That is the highest it has ever been in U.S. history. 

Americans are getting better educated.  Believe it or not, 40 years ago half of adult Americans in the workforce do not have a high school degree.  Today that is 10 percent and dropping among native adults 25 and older.  So yes, there are Americans working these occupations but not in sufficient number to meet the demand of important U.S. industries:  Construction, hospitality, the retail industry.  And here is the rub, there is no legal channel for a peaceful, hardworking person from Mexico or another country to come in to the United States in a safe, orderly, legal way and take these jobs. 

So we have these large flows of illegal immigration, this growing pool of illegal workers.   An estimated 12 million people today, that number growing by half-a-million a year, one out of 20 U.S. workers today is undocumented.  One out of eight in the food preparation business, one out of seven in construction, one out of six cleaners, one out of four farm workers is undocumented among dry wall and roofers, one third to one quarter are illegal.  And Steve and I agree, rounding them up and deporting them would be an economic and humanitarian disaster.  It is just impractical. 

I’ll say where is the line, where is the line of the Americans waiting to pick lettuce in the hot noon day sun out in California or scrub toilets all night at a discount store?  They are just not there.  It is just not a question of raising wages until you attract them.  I doubt if Steve would pick lettuce for $200,000 a year.  He is having too much fun debating me on immigration.  But think what it would do to the industries if they had to raise wages significantly above what they are today.  These industries will basically disappear.  They would either go offshore.  They would price themselves out of the market.  Businesses cannot raise wages arbitrarily.  They are based on the productivity of the workers that are set by the market.  Minimum-wage-law shows that; otherwise, you could just have a minimum wage of $15 an hour and we would do away with poverty but that would not work. 

Now the National Academy of Sciences study did find that there were two groups of U.S. workers that were negatively impacted by immigration - other recent immigrants, and that makes sense, but also Americans without a high school degree.  Now folks, if you are 25 years old, an American native-born worker and you are trying to make it in this economy without a high school degree, you are getting it from all sides. 

The answer to your problems is not to restrict immigration; it is for you to go back to school.  And I have a hunch that is what is behind a lot of those statistics that Steve cited, these people are going back to school and that is a good thing.  That is what happened 100 years ago, the immigration from Europe launched a high school movement here in the United States where Americans by the millions stayed in school, and the percentage of Americans with a high school degree went up dramatically.  That is the answer. 

We have tried enforcement and it has failed.  Let me just give you some numbers, we have made a serious try and enforcement according to a study we published last June, spending on the border patrol, on border enforcement, has gone up tenfold since the late 1980s.  Line watch-hours that personnel spend on the border has gone up eightfold.  We did give a serious try at interior enforcement.  Steve mentioned the latest figures but if you go back to the late 1990s, we were busting over 400 companies that year, 17,000 workers were arrested on work place sites.  It did not make a dent in the overall problem. 

We have stopped enforcing it because it was unenforceable and ineffective.  The Department of Homeland Security had a long case against contractors for Wal-Mart, great publicity.  We busted 300 janitors, 300 down, seven million to go.  It is just not going to solve the problem.  Now we have had results from our enforcement only.  It has not been the results we have intended, but we have had three perverse consequences of our enforcement.  Somebody trying to sneak across the Mexican border today is actually more likely to get in on their first try than they were 15 years ago. 

We used to nab about 40 percent of the people coming across, today it is under 10 percent.  Because all our enforcement has done is created a deadly diversion of people out into more remote areas.  So they are more likely to get in, they are more likely to die.  The death rate of people crossing the border is three times what it was, we had 460 people die last year, 3,500 people die in the last decade, most of them men but some of them women and children.  How many more people will die before we fix our immigration laws?  And then here is irony of all, they are more likely to stay. 

Steve talked about reduction through attrition.  What our enforcement has done is they are just as likely to get in and they are obviously coming in just as great numbers but they are less likely to go home, why?  Because the fees that are paid to the coyotes to smuggle them across are greater so they have to work here longer to pay that off.  It is more expensive and risky to cross the borders.  They are less likely to go home for a visit and possibly stay so basically we have made it… it is just as easy to get in but we have made it more difficult to go home.  So it is working just the opposite.  The numbers coming in are the same, are greater; the numbers going back are actually less. 

Traditionally, Mexican migration to the United States has had a circular component from the late ’60s to the mid ’80s when we started this latest enforcement effort.  About 80 percent of the Mexicans who came here went home.  That is their country.  That is where their family is, their culture.  They come here to solve temporary problems having to do with finance and unemployment and the business cycle.  We have interrupted that and basically stranded them here. 

The bottom line is, and all Cato Research points this direction with a big neon sign, enforcement without reform is doomed to fail and I think the House bill that passed in December is just more of the same.  We have increased spending tenfold.  The problem has gotten worst, let’s increase spending tenfold more.  That seems to be what this Republican Congress stands for, unfortunately, among the more egregious provisions of that.  They have declared 11 million people here to be aggravated felons.  Is that what our state local law enforcement need?  Do they not have their hands full chasing down rapists and robbers and now they have to chase down gardeners and construction workers.  And then the 700-mile wall to nowhere.  Over a billion dollars, all it is going to do is force that flow further out into the desert.  It is going to create more profits for the smugglers, more underground crime, more dead bodies out in the desert and the problem is going to continue to grow. 

What we need is comprehensive immigration reform.  I think President Bush has it basically right, we need to create the legal channel, we did not do that in ’80s.  The ’80s was attrition, trying to solve the problem through attrition.  We will just declare those here legal and then we will try to stop more from coming in while the bathtub just kept filling up.  So we need a temporary worker visa, we need to legalize the 12 million here.  We are not talking about amnesty, we are not talking about handing them green cards but giving them legal status, I think most of them will take us up on that. 

Experience shows from the ’80s that when workers are legalized, their wages go up.  They invest more in their jobs and their language skills.  This will have positive effect, I think, on the whole bottom rung of the employment ladder.  They will be more likely to buy health and auto insurance, pick out a bank account, would we not rather have their money in the bank?  They will more likely to return to their families if they can go home several times in the year, they will maintain contacts with their family.  They will be less likely to want to smuggle in the wife and kids. 

The bottom line is would it not be better if we are going to have 12 million people here, immigrants doing work that Americans do not want to do in sufficient number, would it not be better if they were here legally than illegally?  Would it not be better to have a half-a-million people coming in to the United States in a safe, orderly, legal process than illegal and we can handle it.  If today is a typical day, there will one million people entering the United States; about 700,000 of them foreign-born people, most of them by land but also by sea and by air.  Thirty-one million different foreign-born people enter the United States last year.  We can process them and if they are fee-driven, we can raise the administration needed for that. 

The fiscal impact, we have a welfare system in this country that does steer benefits towards low-income workers.  Most immigrants are low-income workers; therefore, they are going to have an impact on it.  But I think the right approach should be to wall-off the welfare state, not wall-off our country and we can do that.  The 1996 Welfare Reform Act had an entire title making it more difficult for immigrants to collect welfare.  The immigrant roles have declined in the last 10 years.  Well, large-scale immigration, legal and illegal, has been going on, our welfare roles have declined. 

So we do not have to see all those immigrants going welfare.  Tangentially, that is the mistake the Europeans make, they steer them out into the welfare system.  Perhaps, some kind of revenue sharing, the federal government does quite well by immigrants especially, as Michael pointed out, the Social Security System, maybe some revenue sharing to the states and local governments for a healthcare and education.  I’m not talking about new programs or new taxes, just a more equitable distribution of the [indiscernible]. 

Those numbers Steve cited from the National Academy of Sciences, that is somewhat misleading.  That $89,000 figure is just the immigrant and it accounts for the cost of educating the immigrants’ kids without taking into account the taxes that the immigrants’ kids pay.  And when you stretch that out to the children and their children and on out, that number decreases quite dramatically down to $13,000 a year, and that does not even account for the 1996 welfare reform which takes it down even further and if we have another round of welfare reform, I think that number largely disappears. 

So the bottom line is I think we have three options before us.  There are three options.  One is to muddle through with the status quo, nobody is happy with that.  The second is to redouble, triple, quadruple the failed policies of the past and I predict, if the House enforcement-only bill becomes law, you can schedule a forum here in three years.  We will be talking about the same problems, except there will be 16 million people here illegally and 600,000 coming in a year.  Or finally, we can take the approach we have been talking about at Cato for several years now, and that is we can recognize reality, create this legal channel, legalize the people who are here and reform our immigration system to meet our economic needs and our wonderful tradition as an immigrant nation.  Thank you.

Roger Noriega:  Thank you very much.  Our final presenter is Michael Barone, who is a senior writer with US News & World Report.  Mr. Barone is the principal co-author of The Almanac of American Politics, published by National Journal every two years.  He is the author of The New Americans:  How the Melting Pot Can Work Again and has written for many publications including The Economist, The New York Times, and The National Review.  Mr. Barone?

Michael Barone:  Well, thank you, your Excellency.  Immigration is an issue that comes before us again and again and just to put some perspective on it, 40 years ago, I remember in the fall, I believe in 1965, sitting up in the Senate gallery in the Capitol building, watching an immigration bill being managed by a young senator named Edward Kennedy.  He was a little slimmer then.  And he looked rather different from what he did today, but this is, we have gone through immigration builds roughly every 20 years. 

Major immigration legislation it seems, skipping the 1940s when we had a world war, the 20s, the 60s, the 80s, and now we are at it again.  One of the things that strike me as I looked back on that is that almost nobody that I can recall seems to predict that immigration would work out as it has in the 40 years since that Kennedy managed the bill passed through Congress.  Perhaps, others here would know better than I do and I think on that point.  But I do not have any recollection that people predicted it.  Rather to the contrary, in hearings in 1964 when the bill was being considered but was not passed, Robert Kennedy, then the Attorney General of the United States, was asked about whether there will be immigration from Asia and, of course, the United States had prohibited immigration from Asia. 

We had the nicely named Chinese Exclusion Act of 1882.  The Gentleman’s Agreement of 1907 where the Japanese said, “Well, we will not let anymore Japanese move to Hawaii to become guest workers or working on the plantations.”  In World War II in 1943, because China was an ally of ours, we opened up immigration to China to allow in, I think it was 75 people a year.  And Kennedy was asked about the impact on Asian immigration.  He said, well, he had anticipated that there would be perhaps several thousand people in the nature of refugees that would come over the first year or so, perhaps from Taiwan and some other places.  And then, basically, you would have no immigration from Asia to speak of. 

I do not recall people predicting the Latin American immigration.  My understanding is that prior to ’65 bill, we actually had more in the way of open borders under our laws and fewer restrictions, if any, on Latin American immigration.  But there was not a whole lot of it.  Some 20 years ago, I remember going down the border with Hidalgo County, Texas, and I spent the morning with Lloyd Benson Senior, the father of the senator, and the treasury secretary who moved to the Lower Rio Grand Valley after World War I, when it was pretty much just sort of [indiscernible] things.  And I said, “How was the immigration controlled in the 1920s?”  And he said, “Well, what immigration control?”  People just cross the border back and forth.  Nobody thought very much about it. 

We did not have mass migration from Latin America.  And I think it was not unanticipated by the drafters of the 1965 bill.  It had not happened in the past, so it would not happen in the future.  The major backers of that bill included a manual seller that the chairman of the judiciary committee Congressman from Brooklyn, Peter Rodino, later chairman of judiciary committee Congressman from Newark.  And what did they anticipate with immigration?  Well, it was for Jews and Italians because those were the people that emigrated when they were kids and whose immigration were stopped by the 1920s immigration acts. 

So these things do not always work out the way you expect them to.  And what I think we have seen happened, and the other panelists have described in various ways, is that the labor market in the US has produced immigration patterns combined with the labor markets and the donor [sounds like] countries that has exceeded expectations, has worked out in ways that very few people anticipated.  And this has created this problem where we have, we think, 12 million illegal immigrants in the United States, which is whatever position he wants to take on immigration, it seems to me, is an unfortunate situation.  And one that really needs to be remedied from the point of view of homeland security, though immigrants from Mexico, which have the largest number of illegal immigrants are not a huge problem, not our number one problem in homeland security. 

It is nonetheless worrying that we have got all these people that we do not have any legal track of.  And what strikes me is that government has proved to be a rather clumsy instrument to deal with the flows of immigration, the flows of people that have been stimulated by market forces.  The French historian, Fernand Braudel, writes somewhere in one of his works, capitalism “laughs at frontiers,” and capitalism has been laughing at our frontiers in different ways over the last 40 years, and in ways that we did not anticipate.  And my view is that we should try to get immigration laws that work roughly in tandem with the labor force that legalize the flows of labor that come to the United States that are stimulated by our economy, and recognize at the same time that we do have severe problems with governmental enforcement. 

It is fascinating to me that we are able to channel the flow of immigrants less in today’s post-industrial America than we were in the industrial America of 100 years ago that Daniel Griswold was referring to.  Then, most immigrants came in on ships, in ports particularly in New York, where you able to process them, count them, keep track of them, separate out of those who had bad communicable diseases and so forth.  Today, obviously, we are dealing apparently with the consequences of a 2000-plus-mile land border that was negotiated by Nicholas Trist in 1848 in contravention of his instructions from President Polk, but he did seek with. 

Polk’s number one goal was we get the Port of San Diego.  He did not care much about what the land border in or the Rio Grande border in between or the land border between the Rio Grande and the Pacific.  We renegotiated that with the Gadsden Purchase in 1854 in order to get land for a rail line going near Tucson, but not much thought was given to that frontier at that time.  Now, we are dealing with the consequences.  My own view is that on legislation, can we do more on border enforcement and border security?  I suspect that we can. 

I noted that Steve did not call for a wall totally across the country.  I mean, that is something that is, I suppose, feasible.  It would cost some billions of dollars, but this is a very rich country and if we wanted it enough we could probably build on how impermeable it would be over that 2,000-mile limit.  It strikes me as being difficult to be a 100 percent fail-safe, but the fact is that we just do not have… the government is not well-structured to be able to totally patrol that area.  And given that, I think we need to have some way of legalizing, and to some extent regulating this labor flow. 

Steve talked movingly about the workings of the USCIS, and I say that to distinguish it from the [indiscernible] CIS.  And it is my observation over the years that bureaucracies that deal with rich people tend to be highly competent and those that deal with poor people tend to be incompetent.  The SEC, as I am told, a highly competent agency.  The least competent federal government agency over the years seems to have been the Bureau of Indian affairs, followed by what used to be the Immigration and Naturalization Service. 

It seems to me that what Congress is ought to be looking at here is ways, in Steve’s term, to outsource some of the employer verification of things.  I mean the private sector is able to run MasterCards and Visa to have when transactions of billions of dollars a day with very low fail rates and so forth.  Government gives you a little Social Security card that is made out of paper and which can be faked by somebody with a computer, a laptop, and a printer at home.  There has got to be better ways to do this.  I’m not that familiar with all the specifics on that, but I think we can do a significantly better job on employer verification, and Congress should look at that.  But I think we need basically laws that go with the flow of the labor market rather than against it. 

Let me just say a final word on another subject that I do not think any of the panelists have talked about and, on which we all may be in agreement although I’m ready to hear exceptions to it and that is the question of assimilation.  One hundred years ago, Theodore Roosevelt, his successors President William Howard Taft, Woodrow Wilson spoke about how we had to have Americanization of the immigrants.  We have public schools which taught American history civics as well as the English language to the children of immigrants, and I sometimes say today that the thing we need for education of immigrant’s children in particular, if I could have my way, is to have our schools run by the people who ran the public schools of New York City in 1910.  They did a good job. 

Our current schools are not doing as good a job, although there has been some improvement.  Assimilation is not something that Congress can just mandate into law, but I think that and I hope that Congress will be thinking about ways to encourage Americanization, encourage the implication of American values, encourage the use of the English language, and I also wish that when Congress reauthorizes the voting rights act, it might realize that in a country where all citizens are supposed to know English, I’m not sure why we need Spanish language ballots to be mandated on all the states. 

So I hope the Congress will give some thought to assimilation issues as it ponders these issues.  What will Congress do on this?  What will the Senate do?  It looks to me like we are going to see a border… the Senate passed a border security interior enforcement guest worker program, most likely, although it is always hard to predict what the Senate is going to do.  Whether that can be conference with and reconciled with the House border security bill in a way that will be acceptable to both Houses is an issue that I simply do not feel like confident that I can make a prediction.  Thank you.

Roger Noriega:  Well, thank you very much.  We are going to questions.  We have a gentleman here with a microphone so you just raise your hand.  I’ll designate you to ask a question.  Please give us your name, your affiliation, and brief question.  Thank you.

Ezra Klein:  Ezra Klein, the American Prospect.  Thank you all for the forum today.  I want to ask about… Roger, you mentioned at the beginning that 76 percent in a recent Zogby poll said that they would prefer their Congressman to support more restrictive immigration laws.  And there was poll in January that found similarly 78 [sounds like] percent said they would support their Congressman backing a bill that allowed for citizenship if the immigrant pays taxes, has a job, and learns English. 

And then there is a recent in Manhattan Institute poll that found that Republicans as well overwhelmingly support citizenship path if the immigrants enroll in a multi-year course for a citizenship.  How do you guys sort of reconcile the fact that with both overwhelming support for citizen tracks and that more restrictive enforcement?  It seems that public opinion is a little confused on the issue.

Michael Barone:  I’m a reformed pollster.  I work for the Pollster Peter High from 1974 to 1981.  In my observation is that on this issue, as on many issues which for most voters are not front-row issues.  You often get results that are intentioned with other … over the years Americans had been pretty well convinced that immigration in the past was great for the country but it is not nearly so good now. 

So there is a certain tension there and then, is it not great to have citizenship?  Yes, it is.  Do we want to close the borders and have many fewer people come in?  Yes, that is great, too.  A lot of it depends on how you word the questions and I think if you go to Steve’s group’s website and you go to, say Frank Sharry’s group’s website, you will find poll results that are in line with their points of view.  Legitimate questions asked by legitimate pollster results intention with each other.

Steven Camarota:  I would say that, in general, if you ask it is kind of a straight question, like Zogby did.  You generally find that most people tend to favor enforcement when asked is this immigration too high.  Most people say yes in general.  But I would agree with Michael that it is not an issue that everyone is thinking about all the time. 

The second point is just like in the Manhattan poll, it actually started out with the following words:  “Putting aside how you actually feel about this issue, would you be willing to,” was an extraordinarily convoluted question that explicitly was designed to get a particular result and even then, they did not get the overwhelming support that I would assume they would.

 As evidence of that, look, why did the House do what it did?  Of all the people lobbying for increased legal immigration and legalizing illegal aliens, could not fit in this room.  They could not fit in this building and neither could all their money.  All the people pushing for enforcement lobbying up on the Hill, well, there is about as many panel members as they are doing that.  The bottom line is why did Congress do what it did?  Because overwhelmingly they sense in the House what public opinion is.  Now, the Senate, on the other hand, is responding more to interest group pressure. 

But let me just give you another jump, Pelosi, during the floor debate, basically released the House Democrats if they were in a closed district to vote for the House enforcement bill because she gets it and most people prefer kind of enforcement solution.  Now let me say that just because the public wants it that does not mean that is a sound public policy.  But in general, I think, that is how it plays out. 

You have all the interest groups on one side, the ethnic advocacy groups, the business groups, the church groups, even union groups, and the list goes on and on.  I could just name it.  The number of editorials written in support of amnesty of various kinds is there.  So there is an elite consensus on the issue and then the public is over here and that creates the political stalemate, and we see that perfectly in what the House and Senate are doing.

Daniel T. Griswold:  I was just going to say that we are more focused on good policy than good politics.  But it does strike me that the public opinion does tend to be negative towards immigration.  It has been throughout U.S. history.  But it is not really actionable.  It is very hard to find an election anywhere that turns on the immigration issue.  Certainly, the immigration opponents have tried to do that.  They have targeted people like Jeff Flake and Jim Kolbe and Chris Cannon in primaries, and that is among the conservative base, just leaving out the liberals and the Democrats and they have not been very successful, and I also think this is a two-edged sword for Republicans. 

Yes, it energizes a certain core that kind of Tom Tancredo core of their base, whether they would not vote for a Republican or vote Democrat, I doubt.  It is not like there are a lot of them up for grabs.  And maybe Michael is about to speak to this, but I’ll just put in my two bits.  I think this is an issue that Hispanics watch. 

Yes, most of them are here illegally, many of them are U.S. citizens, third, fourth generation U.S. citizens, but they pay attention to what is being said about immigration.  And I think for Republicans, they have a choice of appeasing a small, but vocal minority of their base but at the risk, if they go this enforcement only kind of harsh-based on immigration, of alienating millions of Hispanic voters, I think in 2004 George W. Bush showed you can put a more friendly welcoming face on the immigration message for Republicans, get 40 percent or more of the Hispanic vote and not see your conservative base abandoned here.

Michael Barrera:  Just a couple of things, it is interesting that we just we heard that the leaders that do not want enforcement only but you look at it as much the news this morning, Fox News - which I do not normally watch – CNN everything they showed they called the immigration war.  Now all the pictures that you see now are immigrants try to run over the border.  It is just not a guns and border issue. 

Immigration is an American issue of all our borders, but that is all you see on TV right now, these poor people trying to get across or dying in a dessert.  That is all you see.  And so, when you see that image all the time, you are going to be afraid.  And I used to live Kansas City, as they mentioned, and I know that [indiscernible] was just there in Kansas City and did a big conference. 

One thing he talked about is the Hispanic community.  I have never seen any issue, and I have been been involved in Hispanic politics for a long, long time.  I have never seen any issues so coalesced to the community as this one has.  Because when you get right down to it, this is an issue that affects us personally because myself, I’m the grandson of an immigrant.  And many of us are grandsons or great-grandsons of immigrants, and what is interesting about this country, there is only one group in this country that is called Native American.  We all come from somewhere. 

I think Bill Murray, in a funny way, said that we are Americans, we got kicked out off all the best countries in the world.  And when you think about it, that is what made this country great.  You think about immigration.  This thing about Ronald Reagan, probably one of the greatest conservative presidents, or some people consider the greatest president that we ever had, he talks about his forbearers were from Ireland.  He talks about how his father used to deal with the signs that said, “No Irish.  No dogs need apply.” 

So right now, the Hispanics are the group du jour.  You talked about earlier how the Germans were not wanted.  At one time, you did not want the Japanese and in fact we had a law at one time that interned Japanese Americans.  We had one time where Italians were not wanted.  The Asians were not wanted.  And what happened to all these folks, they actually do start contributing to this economy, start contributing to our culture, and they start contributing to who we are. 

You think about walls.  Just 20 years ago, we have Reagan standing in the middle of Berlin saying, “Let’s tear down this wall.”  And we have the same party and I’m a Republican, we have the same party now saying, “Let’s build a wall.”  And that is just something that the parties are going to have to be concerned about, because right now I heard the comment, and I had the chance to meet with the President a couple of days ago.  And there was a comment made that right now the Republican Party needs to be concerned because the party is being “Wilsonized.”  For those you know California, when Pete Wilson tried to pass 187. 

The party has never recovered from that and the Republican Party did an amazing job during the last elections.  They had about 40 percent Hispanics actually voted Republican, and I’m not sure if they are going to get that at this time around.  And so it really has, they call it has really awoken a sleeping giant.  You have seen just last week, there is half-a-million people that demonstrate peacefully, many of whom are carrying American flags in Los Angeles.  You have 30,000 in Phoenix.  You had 100,000 originally in Chicago.  You had protests in New York, Philadelphia, you had one here in D.C., and these have all been very peaceful events. 

And these people saying do not criminalize this.  As you mentioned, all the groups that are out or against this enforcement only.  You think about that and you think about what is being asked for them.  You are trying to criminalize churches?  Of course, they are going to be out there and be against that.  You are trying to criminalize small business?  Of course, they are going to be out there and against that.  You are trying to charge small business who are in very, very thin - anybody has been in a small business know you have a very, very thin margin.  You start raising those prices of those wages.  You are going to put a lot of businesses out of business.  You put those businesses out of business, you put people out of jobs. 

You really need to start thinking about this thing from an economic view and just a policy views.  It is so important that we do not get too emotional about this, but really think it through.

Roger Noriega:  Let me just comment briefly on that.  I mean, I think there are… you can also explain the apparent contradictions and that people can have several views about this issue.  We did not consciously pick a panel of Noriega, Barone, Barrera, or Camarota, and I do not know whether English.  Oh, okay.  You are the only … and there are no known Cherokees on the panel either, Native Americans.  I mean I think there is a recognition in this country that we are made of… we are a nation of immigrants.  But there is also respect for the laws even within my own family and the grandparents of someone, who paid a peso when I got a little piece of paper and I guess he is legal, but he was my grandfather and did not go home and all four of my grandparents came over the same way.  But even within my own family, there is a recognition that people should respect the law because we also have family members in Mexico who are going to the embassy or consulate or lining up to get a visa and come in legally. 

So that’s kind of a natural tension.  I think this debate is so far up in the rafters and it has gotten, as Michael Barrera has suggested, sort of shrill as you get to Washington and as you see leaders posturing on the debate quite frankly, I think.  When you get to Middle America, Wichita, Kansas is where I’m from, you see the same attitudes of let’s assimilate the Vietnamese.  Let’s assimilate the Mexicans.  Let’s assimilate other people who are arriving from other countries and part of our communities, not just our economies. 

So I think that there is this sort of a natural recognition.  I think assimilation is the keyword and we are not going to talk about that so much in this particular panel but want to in future panels.  Because I think that is a real question for us, a real challenge with these 12 million illegal immigrants.  How do you get them out of the dark corners of our economy and make sure that they are educated, those who want to stay are educated and assimilated and have access to basic services but also understand what it is to be an American? 

How does our education system deal with making native-born Americans more competitive in the world today at the same time that they are expected to absorb 12 million recent arrivals?  And it is extraordinary challenge and hopefully as we get through this current raft of legislation within over the medium turmoil, our Congress will deal with that issue as well.  Other questions?  The gentleman right here.

Male Voice:  [indiscernible] from Progressive Policy Institute.  I just want to pick up on the assimilation/culture question and just ask Mr. Barone and Mr. Camarota to talk about it, just even briefly.  Mr. Barrera, you do say it is an emotional issue but your entire talk was about the economics of it, which I think this people on the side kind of central left coalition generally do, and it is hard not to talk about the cultural issue without sounding like Tancredo [indiscernible] kind of perspective, so how do we talk about… how much is the culture issue involved in this current debate and how can it be addressed? 

I mean, people feel uncomfortable with Latino people standing on the street corners waiting for jobs, with the Spanish language television and radio and billboards.  And there is something problematic, even from people on the leftmost side of this can see there is something problematic about people coming to the country and working, who do not feel any civic ties to the country, who are perfectly patriotic towards their Mexico and they want to go back there, but that not the kind of civic dispositions that is necessary healthy for America.  So how do we get people who are here to care about America, want to abide by laws and how much is this issue involved in the debate?

Michael Barrera:  You make, yes, an excellent question.  First of all I talked about assimilation versus the word acculturation.  I used to hear that, in fact, one of the founders of the United States Hispanic Chamber of Commerce is a guy named Hector Barreto, and he was visiting the President one time and he was asking will the Hispanics help you get elected.  We wanted to be more involved in things and the President actually, this is Reagan, and Reagan said, “Well, Hector, you need guys, you get Hispanics to be part of the melting pot.”  And Mr. Barreto goes, “No.”  And people were shocked.   They are telling the President, “No.”  He goes, “Mr. President, I do not believe in melting pot.  I believe in a stew, too.” 

You look at a melting pot, everybody just kind of blends into one conglomeration of something.  You think about a stew, the carrots have their own personality.  The celery has its own personality.  The onion has a personality.  The meat has its own personality and it makes a great dish.  And we think about America.  America really is a stew versus a melting pot.  And I think we think about this to some point because we are a country that is, but many different cultures and these different cultures have really changed the way things are going here.  You look at salsa right now.  Salsa outsells ketchup.  Tortillas now outsell Wonder Bread. 

And it is not just the Latinos that are doing it.  It is everybody that is partaking in that.  But I agree with you.  I have faced some of those similar issues.  We used to own a restaurant in this area called Southwest Boulevard in Kansas City.  And at that time, we used to have a lot of the immigrants come out there standing standing in front of the restaurant.  It scared away our customers.  Kansas City at that time was only four percent Latino and our customers were not Latinos.  And it scared them and it upsets us.  It hurt business. 

And I can see why a lot of people would feel very concerned about it and very uncomfortable with that because I used to worry about my mother coming out at the end of time.  I worried about that, too.  But at that time, we just try to scare them off or be rude and that did not work and we ended up selling the restaurant and the people like came in and actually start talking to me, explaining to them, “Hey, you need to know what is going on here.”  And they started listening. 

In fact, in Kansas City, they put this thing called, the “The Can Center” on the street.  And the scenario where all those folks used to stand out there had now, they put them in one area that they all go to.  And the police actually assigned an officer to this area.  And many people do not want to be spending tax money but what has happened there is they got an officer that speaks Spanish that talks and tell them what the laws are, what is going on.  You got to start respecting this thing and crime has gone down 52 percent in that area.  And it is important to know about that crime, it was not just the crime that these “illegals” were doing, there are crimes being committed against them and others that were in that area. 

So, really, there was a solution that everybody liked, but it is a solution that worked.  And we saw actually scaring them does not work or being mean to these folks does not work, but that is just not the American people. 

Interesting, we just had an election in Virginia, Kaine ran against Kilgore, and Kilgore runs some very offensive ads against immigrants and illegal immigrants and he lost.  And USA Today did an actual article on that, how they felt that they may have caused him the election because I have talked to so many Republicans in that area that were offended and they just could not support it. 

So it is important that acculturation goes both ways.  We have got to be accepting it but they are also going to do their part to learn how Americans feel, to learn our ways.  And when you got a system you want to send it back after a year, watch and they learn the American ways.  If you got a system where you can gain citizenship someday, then they rule on it and become part of the fabric of our communities.

Steven Camarota:  Well, I think, let’s talk about a couple of things real quick.  One of the things that make immigration, assimilation of immigrants so problematic and the public so dissatisfied is that we can agree as America on what we want from the immigrants. 

Now for me, I have to be the grandson of immigrants as well.  They came from Italy.  I do not care a whit about it.  America is my country.  Italian culture and language do not mean anything to me.  A lot of people feel that way and that is what they want the immigrants to do and a lot of people, especially immigrant elites, do not feel that way.  A lot of people see that as a kind of undesirable Anglo conformity.  We have a fundamental debate, and so we are bringing in millions of people into our country at a time when intellectuals and elites cannot even agree on what they want from the immigrants and so they received very mixed messages. 

It seems to me you should have a pause in your immigration until such time as we agree as a country what it is that you want from them.  Otherwise, the public and the immigrants themselves are going to be highly dissatisfied as they get these mixed messages.  Other things complicate assimilation in a way that was not true in the past.  In the past, obviously, we had a much higher degree of consensus from what we expected from the immigrants.  There was not much debate among daily.  There were some but nothing like today. 

Second point, technology.  You can call home.  You can visit home.  You can travel home.  You can listen to your hometown radio station on the internet today.  All of these things fundamentally make it more unlikely that the immigrant breaks the psychological and physical tie that ties them to the home country.  That is another huge impediment and that has nothing to do with the immigrants.  It has to do with the reality with the world we live in.  So in addition to [indiscernible] attitudes, we have technology.

 And finally, we have numbers and diversity.  We have three times as many immigrants living in the United States today.  The rate of immigration in terms of the growth of the foreign born is the highest it has ever been.  It is true that the number coming as a rate [indiscernible] of the population might be a little less, but the growth in the foreign born in the 90s was a higher percentage of the US population than it was, say, 1900 to 1910.  The numbers are enormous, 35 million immigrants create the sufficient critical mass to create lots of isolation - foreign language, media, and cultural outlets. 

And that probably has a big impact but the other thing that has happened is the diversity of immigrants has declined a lot.  One culturally [indiscernible] group now dominates the flow was not true in 1910, and we may have had one year back in maybe 1840.  The Irish may be had a larger share as Spanish speakers are today was a transitory thing, and it has never happened again.  We have had three decades of one country being the top country.  We have had that before.  And that one country is Mexico.  It accounts for a third.  The next biggest country, China, counts for about four percent, five percent. 

So we have this decline in diversity.  Very large numbers change in the lead attitude, plus technology.  And finally, one of the biggest things we did in the past that greatly facilitated the assimilation because if we have low immigration for about 50 years.  So if the past really is to be our guide, and we really do need to think about when we want to dramatically reduce those numbers to begin assimilating people, not cut it off completely.  We did not cut it off completely in the past.  But World War I and restrictive legislation in the 20s allowed immigration to be low for 40 or 50 years, and it is what has created a lot of the immigration nostalgia.  We now interpret immigration, knowing that we have low immigration for 50 years and greatly facilitated the assimilation of that huge wave we have done before.

Michael Barone:  On assimilation, in my book that was published in 2001, The New Americans:  How the Melting Pot Can Work Again.  I used the metaphor of interweaving people into the American fabric.  I noticed that Michael Barrera used the term “fabric” later.  I like “fabric” better than “stew.”  It seems more stable.  But, which I think is a nice method for the problem, of course, with the melting pot thing is that we do not know what melting pots are anymore since most people do not go to work in steel factories anymore. 

To address some of Steve’s points, I agree that we have got a problem in this country with our elites - media, university - corporate elites, as well, who are basically hostile.  The word “Americanization” sounds to them like noxification.  These are people with what Samuel Huntington calls transnational attitudes.  Our country is no better than any country.  In effect, in a whole lot of ways, it is worse.  That kind of attitude infects our culture from these elites.  I think most of the population happily is immune from this sort of nonsense, but it is a problem and it is one. 

Then, I brought up the issue as I brought it up in my book for exactly that reason, to try and be a voice on the other side on that issue.  As far as difference from the… this is different from the… this [indiscernible] wave of immigration is different from the past.  Yes, it is true that we have got a higher percentage of Mexicans, people from one place.  I do not think that is an entirely a civic threat to us.  We did see a lot of Mexican flags at the demonstration in Los Angeles this weekend, the LA Times, and other media elites censored the flags out.  They have taken that off the website.  They have mentioned that if there are any Mexican flags there at all, they just talked about American flags.  Their presence is an inconvenience for people to take the position I do on this issue. 

But nonetheless, I have covered politics in Mexico and I remember one day out in Huntington Park, California, which is a town southeast of LA which is about 98 percent Hispanic according to census, I asked a guy from Mexico, “Would you like to see the Mexican system of politics and government in the United States?”  And he just laughed and laughed and laughed.  I mean, Mexicans understand that whatever the dysfunctions or our political system, the dysfunctions of the Mexican system are considerably greater, and I think you have to go find some professors of Hispanic studies to find people that are going to advocate the new nation of [indiscernible] or whatever it is.  I’m not too worried about that. 

As far as you are being to travel home and to listen to home radio more easily than immigrants of 100 years ago, yes.  And yet it is interesting when I did my research on this book, The New Americans, looking at some of the 100 years, I was struck by the numbers of immigrants that went back and forth and, of course, you have a lot of people, Italians and Greeks, for example, who were in this country for 20 years and then went back.  Very few of the Jews from Zionist Empire ever went back.  They had the lowest rate of return.  So you have had the foreign language newspapers.  You did not have broadcast media or cable media, obviously, 100 years ago, but you did have the foreign newspapers and all that stuff. 

The idea that it was just a one trip and you would never see your home again.  By 1900, that seems no longer to have been the case.  For the Irish immigrants going over at 1845, yes, they were on sailing ships.  They had no money.  People were dying of starvation there.  They were never going to see the place again.  For the immigrants of 1907, it was not as easy as getting on a plane, but they were… the context in transatlantic ties were greater than I had previously understood.

Daniel T. Griswold:  Let me just make some… I was going to sit this one out, but I cannot resist.  First, I think as in so many areas, government gets in the way of assimilation.  I think there are powerful natural forces in the US culture and economy that were towards the assimilation and government gets in the way. 

One, multiculturalism officially sponsored through universities and public schools.  Bilingual education, I think most of the research shows that that does not encourage a language acquisition to welfare state.  I think that entraps immigrants as it traps natives and again, I’m for cutting back on the welfare state as we tried in 1996 and largely succeeded. 

Secondly, language.  Studies show that Hispanic teenagers of the immigrant parents acquire English.  I mean, there is a powerful pattern throughout American history that the first generation struggles with the language.  It is hard to learn a new language when you are 20 or 30, never mind 40 or older.  But the second generation is invariably fluent in English and in the native language.  And by the third generation, forget it.  They just want to speak English, and that is happening among Hispanic immigrant children, as it has throughout our history.  This idea of these linguistic ghettos really the big story among Hispanic immigrants is how they are dispersing over the country. 

I was talking to my mother over the weekend.  She lives in a small farm town in Central Minnesota.  She has Hispanic neighbors when I was there over the summer.  I heard families speaking Spanish on the beach.  That was not happening in the 70s when I was in high school.  Just making the point that you go to North Carolina, you go to Georgia, you go to Utah, you go to Central Minnesota, and you are finding Hispanics.  There is no island of Spanish language in those places, so they are absorbing the language.

And finally the myth of the timeout - German immigration was higher than Mexican immigration as a percentage of the economy from 1840 to 1890, yet we assimilated the Germans.  It is a myth that we have this timeout that allowed us to absorb these immigrants.  They were coming pretty heavily from the 1840s on and we absorbed them through these natural forces.  You cannot be a success in the United States unless you learn English.  There is a lot of incentive to do that unless the government gets in the way.

Roger Noriega:  We are going to try to stay on schedule and that is to say take one more question.  This lady over here.

Mary Ann Scott:  I’m Mary Ann Scott from the Ethics and Public Policy Center.  I have a question for all the panelists regarding education.  I think Mr. Barone had mentioned public schools, that we are all doing a poor job at assimilation.  And obviously, there had been arguments that they are doing a poor job in a lot of other areas as well and widespread voucher program, which obviously there is one in D.C. and various other places. 

What would your opinion be on kind of the whole question of assimilation and perhaps doing it through private schools rather than public schools as you think having a widespread voucher program with a number of the leveled immigrants we have now would be a problem, or could you see that as perhaps working better through competition and other means than private schools or, I’m sorry, in public schools.

Daniel T. Griswold:  Yes.  The Cato Institute has long advocated more educational choice and I think this would be one of the benefits.  I’m not going to beat upon the public schools.  They have got a lot of problems that we all know about.  But I do not even think they are doing their basic role of kind of inculcating students in this general understanding of America.  I know I have three homeschooled kids, and I know one study showed that homeschooled kids knew more about American history and American civics than public school kids. 

And I think some kind of a voucher system, I think the Catholic schools over the years have done a lot of work in assimilating immigrants into not just language skills but also understanding of American history.  And I think the schools just need to do a better job of equipping Americans to make a living in this high-tech economy of ours so there are not so many Americans thrown out there competing against low-skilled immigrants.  The answer is to upgrade our skills, not to build walls around our country.

Steven Camarota:  One comment about education that you have to keep in mind since I’m the only demographer here.  Let me point this out.  In the past, immigrants and they just have about the same number of children.  Now, it is true that immigration does not fundamentally change the fertility rate in the United States because most births are still in natives.  With immigrants, we have about 2.1 children, without them it is 2.  Americans, oddly, more different than Europe, tend to have more children than any other place in the developed world -  Native-born Americans - but still, there is a big gap between native and immigrant fertility, it just does not change the average very much. 

What this means, for example, is in a state like California have about a quarter of the population is foreign born.  So you might guess, roughly speaking, that about a quarter of kids in schools would come from immigrant families, right?  It is half.  The reason that happens is because even more modest differences in fertility produce very big differences in the school-age population.  As a consequence, you have lots of areas even more so than 1910.  More children are born to immigrants today than at any time in American history as a share of all births in the United States. 

And so what you have at school systems in which the values and norms are set by kids from immigrant families.  In the past, immigrant kids and kids from immigrant families often got lost, sort of, in a sea of kids from native families, and this also buttress the assimilation.  That is no longer taking place because of these fundamental differences in fertility, and which I think points to just another reason why mass immigration is so much more incompatible today with modern America.  Not just its welfare state and economy, but also just its demographic realities.

Michael Barone:  The part about public schools [audio skips] New York City in 1910 were about as heavily immigrant as LA unified or something like that.  I mean, [cross-talking] there is huge concentration on the central cities in the 1910 immigration.  If they were not all in one group as you accurately pointed out earlier.

Steven Camarota:  Right.  But the other point is there just was not as many places.  In 1910, what it seems to be the high point, about 22 percent of all births where the immigrant women based on the records that we have.  By today, it is probably closer to 25 percent and that is not a stable number.  That keeps going up. 

So the fact is that, yes, of course, we saw concentrations.  And Michael is right the attitude of school administrative and teachers were different then.  But the demographic reality in many more places is different today than it was in 1910.  Even though, sure, there were concentrations in the areas where could argue that so many of the kids were from immigrant families.  But again, it is not like it is today.  We have already passed the 1910 level in terms of the impact of immigration on the school-age population.

Michael Barone:  No, obviously, what we really need with this education is to close all the schools of education and outlaw teacher unions.

Roger Noriega:  When I was in school I did not notice the nuns letting the instituting body influence the values that were going to dominate the school.  I think the nuns stayed ahead of the curve.  Maybe we ought to put them all in Catholic schools.  One last question.  I lied.

Jose Diaz Esper [phonetic]:  Jose Diaz Esper.  I’m an investment banker, attorney by training, but I have a small think tank and now I would like to share with Mr. Camarota that my family is from Spain, and I remember when the French and the Italians were saying that Europe ends in the Pyrenees and now Spain, Ireland, are the most dynamic countries in the EU.  I think we have to take a broader context.  If you go to Miami, you can see that the immigrants are very rich people.  I shared this with some of the think tanks here that money that is coming from Latin America is part of the problem. 

We have a huge inflow, not only of Latino immigrants.  We have a huge inflow of funds.  The Venezuelans, the Argentineans… television now is going to own the largest Hispanic TV station here which is [indiscernible].  All I’m trying to suggest maybe we should put this in a broader context, that immigration, sure, is about security because a lot of these people are now providing funds to their country, adding stability, and we are in the global economy.  Thank you.

Steve Camarota:  Think briefly the analogy.  Spain at the time of its integration into the European Union was about twice as rich as Mexico is, relative to the United States, Spain relative to the EU, so the gap is much bigger.  As a population-based, Spain was about 35 million, Mexico is about 110 million.  So it is much larger as a population size, so keep those… it is much poor, less developed, politically less stable.  I think the better now, it might be Puerto Rico.  When travel costs dropped a lot between the United States and Puerto Rico, people could come pretty freely.  And about 25 percent of Puerto Rico’s population moved to the United States, so that is what we would probably expect. 

I agree with people like Phil Martin.  They are probably about 20-25 million people in Mexico who might relocate to the United States if there was, say, no restriction.  That is nothing compared to what we are talking about with Spain and the European Union countries.  The gap is not as large.  The population size is relatively are not as large.  So I think that we have to at least to keep in mind to at least the demographics that we are talking about.

Jose Diaz Esper:  They need to [indiscernible] did something else.  I mean, that it was wholly converted.  You got all kinds of money for infrastructure.

Steve Camarota:  Yes.

Jose Diaz Esper:  And when the US was insisting that Turkey should be admitted in the EU.  As what I have said why not do something to NAFTA so that Mexico would be brought up to speed with infrastructure with better laws.  Well, we have a vested interest in the security of Mexico.

Steve Camarota:  If you advocate that, just to understand that Mexico is three times larger than Spain, so the cost right there would be three times as great as what you spend on Spain and it is half as developed.  Just keep that in mind.  If you use that model, you have to keep the enormous differences in mind.  So if you want to spend a lot of money in Mexico, you are going to spend a lot.  If that is you want to do, and I suspect no consensus in the United States to that.  And I think Dan would be very reluctant to say the United States government should be spending a lot on infrastructure in Mexico.

Michael Barone:  I think we should spend it here.

Steven Camarota:  Yes.

Michael Barone:  I just want to speak a little bit about Puerto Rico in the 40-year perspective.  If you look at Puerto Rico from the point of view of the writers of West Side Story, which comes out at 1957, they thought that New York City was going to be all Puerto Rican, and if you did a straight line and extrapolation of immigration once the Eastern Airlines or whatever cut the affairs from San Juan to midnight flights through San Juan to JFK, it would have done. 

But net migrations to the mainland from Puerto Rico, my understanding is basically flat line down at 1961 when Puerto Rican incomes reached to about 35… per capita income reached about 35 percent of mainland, its state about that same 35 percent.  There are still cheap flights.  There are all US citizens.  But we have not had net migrations.  So it is a reminder that straight-line trends do not go out forever. 

And I would just say, concluding here today, that my remarks that we have all been sort of operating on the assumption that immigration trends are going to look like they have for the last 10 or 15 years out indefinitely.  I have a feeling that if we convene this panel 40 years from now with at least me being replaced by somebody else, we would find that that is not the case and that we would have some surprises.  As I look demographically at Mexico, I see, as Steve does, 110 million people.  I also see country with that has had sharply reduced birth rates in the last 15 to 20 years, and I see similar trends in other parts of Latin America.  I also see a Mexico that is to some considerable extent having economic growth that operates in tandem with the United States since the passage of NAFTA.  One of the reason they did not have much economic growth and they will want to know too, is we did not. 

So are we going to get huge Latin migration as we have gotten in the past?  My guess is that by