Thank you so much, Chris, for that warm welcome, and thank you all for coming out tonight. As a fellow of the Manhattan Institute, which prides itself on being the lean, mean, virtual think tank--so virtual, fellows don't even have offices in the building--it's always a pleasure to come to another institution like AEI and see how the other half lives. And boy, do you live differently. And all I can say is that I'm very grateful that for even one night you're willing to include me in this gracious way of life.

In fact, I'm very much the beneficiary of dumb luck tonight--and not just because of AEI's hospitality. Back in July, picking an angle out of a hat, I told the person who asked me to speak tonight that I'd talk about the politics of immigration reform. I had no idea then that one of the first things President Bush would say in the days after he was re-elected was that he was going to get back to work on immigration. And I had no idea that immigration was going to be--as I now believe it will be--one of the hottest topics in the new congress. So I'm feeling kind of lucky tonight in my choice of topics.

But before I get to the politics--before I get to the who and what that we're all going to be reading about in the news soon--I'd like to back up just a step or two and talk a little about the substance of immigration reform. About the reason we need it--what it is that needs fixing. And also about what I believe the shape of the remedy should be. But I do promise--by the end of the evening, I'll get to the politics and prospects for reform.

So the true title of my talk tonight ought to be a little different. The title should really be "Beyond Open or Shut." Because, what I'm hoping to do, in a nutshell, is to show you how and why immigration is a more complicated issue than many of us think it is at first blush.

Now I'm sure, even if you don't pay much attention to the issue, you have some sense of the two bitterly opposed sides of the debate. Immigration is one of the most intently contested policy questions in America today. And yet the public discussion of it could hardly be more disappointing. The two sides barely speak to one another. When they do, the conversation rarely goes beyond shouting and name-calling. They can't agree on anything--not even how many immigrants come each year, or how many already live here. And for all the apparent complexity and sophistication of their arguments--and I hate to say this, because I'm frequently guilty of it myself--the difference between us often boils down to little more than raw emotion: whether one likes immigrants and sympathizes with them or not.
 
And this, I submit to you, is a very bad thing--because neither sympathizing with immigrants nor fearing and disliking them is an adequate guide to policy in today's world, ripe as it is with international opportunity but also, obviously, dangers. No wonder much of the American public feels that both sides have it wrong. After all, who in their right mind in the twenty-first century can be for open borders? But can we really--do we really want to--cut off immigration altogether? That doesn't ring quite right with most Americans either. So it's easy to be confused and to wonder how to parse the issue--to wonder what's the compromise that makes sense for America today. What kind of immigration policy do we need in an era of globalization and international terrorism? In an era when the world is shrinking and yet what it means to be American seems ever more distinctive and valuable and in need of protection?

So that's the question I'd like to address tonight--and I'd like to start by taking a skeptical look at the immigration system we have. I submit to you--and on this, actually, the two warring camps do agree--I submit to you that our current immigration system is broken. And I think this is best illustrated with some vignettes--some symptoms, if you will.

Symptom #1 comes from the border, near the town of Douglas, Arizona. As some of you know if you follow this, in recent years Arizona has become the gateway for illegal immigrants entering the country from the south. A decade of crackdowns--a new strategy, a tripling of manpower, a quintupling of the budget--elsewhere along the southwestern frontier, mainly in California and Texas, where most people used to cross, has funneled the flow through Arizona. The terrain there is much harder to police. There are no cities on the border. It's a vast, open desert. And though we've hugely increased our resources in Arizona too, we still haven't managed to get it under control.

The Border Patrol station in the town of Douglas has grown from a few dozen men to over 500 in just ten years. They have every technological tool you can imagine. There's a 12-foot metal fence along the border. The agents use stadium lighting and infrared night scopes and ground sensors buried in the sand that send signals back to a high-tech control room whenever a migrant walks anywhere near them. The sector even has drones--unmanned aerial vehicles with cameras--that fly over the desert trying to spot bands of migrants. The government spent $10 million this summer on the Arizona border alone--all 260 miles of it. And still we hardly made a dent.

I spent some time there in June and July, and it's hard to convey how out of control it is. The valley around Douglas is maybe fifteen miles wide by twenty miles deep. It's an absolutely beautiful place, especially at nightfall when the busiest Border Patrol shift begins. Despite the fence and the lighting and all the technology on the border itself, hundreds of migrants a night still manage to cross into the U.S. We don't have enough agents to station them every few yards along the border, and even if we did, people would get by: they can climb over the fence or cut through it in the time it takes an agent to look the other way. So the main action takes place on our side of the line, in this big valley, at night. It consists mainly of agents walking and driving around in their SUVs looking for migrants--and it sounds straightforward, but it's almost beyond imagining.

You have to envision the scene. It is pitch dark. The agents are badly outnumbered--by the terrain and the migrants. Once he gets out of his vehicle, it's almost impossible for a man to dominate even a small stretch of this dark, mesquite-covered desert. The Border Patrol vehicles crisscross the valley, back and forth, responding to calls on their shortwave radios--calls generated by tips from ranchers who've seen migrants or, in other cases, signals from ground sensors. Dozens, maybe scores, of migrant bands are crisscrossing in the same territory at the same time. Sometimes their paths meet--often by coincidence--and the agents apprehend the interlopers. But just as often, they don't meet. Much of the time, you get the impression, they miss each other by a few yards or even a few feet. It's that kind of chaos--something like the fog of war.

The completely absurd moment where it finally sunk in for me was when the agent I was with got out of his cruiser and started to look for the footprints of two migrants someone had recently seen in a particular culvert. That's one of the oldest and traditionally most productive Border Patrol techniques--tracking footprints, or "cutting sign," as it's called. But these days, in Arizona, there are so many footprints--so many migrants crisscross every little patch in this vast valley every night--that the night I was there, the agent couldn't make sense of the tracks. Couldn't begin to get a bead on one set of prints amidst the dozens of others. It was literally like trying to track footprints in Grand Central Station. And try as he might--and we spent quite a long time rooting around in that culvert--that pair of migrants got through into the United States.

So in Douglas, the Border Patrol catches several hundred migrants a night. Along all 260 miles of Arizona border, they catch close to 1,400 every night. In the last fiscal year, all along the border, from coast to coast, we caught about a million--1.1 million, to be exact. Nobody really knows how many get through for every one we catch. The best estimates I've seen suggest that about a million get through and 400,000 to 500,000 end up staying in the United States. But whatever the exact numbers are, I think you get the point: despite a huge buildup over the past decade--a huge effort and a huge expense--the immigration system we have isn't working. At least not on the border.

So that's symptom #1. Symptom # 2 is also a story from Arizona, although the truth is it could be from almost anywhere in the country. It's a story about business--American businesses that rely on immigrant labor. In this case, it's farmers, large-scale agribusiness-type farmers, who grow lettuce and broccoli on the other side of Arizona, the western side, near Yuma. And in recent weeks, these growers have gotten into a nasty, public quarrel with the Border Patrol. Why? The growers claim they don't have enough workers to pick their lettuce and broccoli.

Now exactly why that's so is in some dispute. Most of the workers are day laborers who come across from Mexico in buses. They get up before dawn and hook up with contractors, who bring them into the U.S. packed into little vans and old, rusty buses. Some of the workers are legal; many are not. And I suppose the scrutiny is not always as intense as it might be. But apparently last month, the Border Patrol started cracking down with more intensity than it sometimes does. And meanwhile, the construction business has also been very good in Arizona this fall, so apparently a lot of workers who used to work in the fields are now working construction instead. But whatever the reason, the point is that the growers don't have enough men to harvest their crops--crops they've already spent a lot of money to plant and cultivate. And they are very, very upset: so upset that they're actually complaining--publicly, officially complaining--to the Border Patrol and asking it to go a little easier.

Now you could say, and no doubt many of you are saying: "Surely the Border Patrol is in the right in this case. They've got the law on their side, and why should these greedy growers get the benefit of this cheap, illegal labor?" But the fact is that the Western Growers Association is one of the groups that has pressed the hardest in recent years--as hard as the National Council of La Raza or the National Immigration Forum or any other immigrants' advocate group--for legislation that would provide them with a supply of legal workers.

The growers are willing to pay higher wages for that legal labor. They're willing to do whatever it takes to make sure Mexican workers have no advantage over Americans who might want the jobs. But they say no Americans will do the work, and the bottom line is that they need the labor--as this fall's shortage shows all too vividly. On some farms, it's so bad this year, growers say they've been able to harvest only 30 percent of their crop. The shortage has boosted wages--some 15 percent above what they usually are. But guess what--despite the wage increase, no native-born Americans have shown up to do the jobs. And as a result, the growers say, prices of lettuce and other vegetables are going to soar in the months ahead.

And as I say, this is a story from Arizona, but it could be anywhere in the U.S. Entire industries--not just agriculture, but hospitality, food processing, landscaping, healthcare, construction--can't find the workers they need and are forced to operate outside the law.

There are a lot of reasons for this: our increasingly educated workforce, our increasingly bifurcated, high-and-low-wage economy. I'll talk a little more about the reasons in a minute, but the facts are stark. Some 80 percent of American farmworkers are now foreign-born. Looking at the economy as a whole, one in every seven American workers is an immigrant. In one recent five-year period, people born outside the U.S. filled one out of every two new jobs. In some parts of the country--in states as different as Maine and Minnesota--that number was more than 90 percent. Nine in ten of the new jobs created in those fifteen states in the second half of the 1990s were filled by immigrant workers. That's a mind-boggling statistic, and you don't have to be an economist to see the point. You can't grow a business without workers--at least not in most cases. And without foreign-born workers, these American businesses would not be growing, or certainly not growing at anything like the rates they've been able to grow in recent years.

Now, of course, not all of these workers are here illegally, but I guarantee you, a significant percentage are. And the situation in Yuma is only the most recent in a long line of stories. In Georgia, a decade or so ago, the complaints were from onion growers. In Nebraska, the controversy involved meatpacking plants. Shocking as it is, this scenario is becoming a staple of our time: American businesses so strapped for workers that they are willing stand up to the immigration service and ask it to stop enforcing the law.

Symptom # 3 is a human story. Angela Perez came to the U.S. with her parents from Colombia in 1999. She was thirteen years old and spoke virtually no English. At first, the family was legal--they came on tourist visas--but they overstayed those visas, and so Angela grew up in the shadows: an illegal immigrant in a poor, largely Hispanic neighborhood of New York City. Still, she studied hard and did well in school--to the point that when she graduated last year she ranked fourth in her large high school class. She had a 3.8 grade-point average, a binder full of academic prizes, and was known as such a studier that she was voted "most intelligent student" in the yearbook poll. The only problem: because of her illegal status, she has no future in the United States. She can't work legally. She can't go to college, barred as she is from any federal grants, loans, or work-study jobs from any college, public or private. She can't even attend a state college at the usual subsidized rate--she'd have to pay something closer to a private-college tuition. Basically, her life is over--certainly the life she'd come to aspire to. And what a waste--both for her and for us.

And the real point about Angela's story--heartbreaking as it is--is that she's one of the lucky ones. Because living in the shadows on the wrong side of the law takes a huge toll, particularly on children, and most illegal immigrant kids don't do nearly as well as Angela has. Partly, this has to do with how their families live. The breadwinners operate under false names, with false documents, afraid of becoming personally known to their employers or of having contact with authorities--any authorities, including in the local hospital and at their children's schools. These families hesitate to put down roots, and they move frequently, often with the law--the immigration service or the Social Security Administration or some other law enforcement--not far behind. They move so often that teachers in some of the company towns--meatpacking and other kinds of towns--in Kansas and Nebraska and elsewhere, where the workforce is all recent illegal immigrants, say there's nothing much they can do for most of these students. The kids just don't stay long enough to learn anything.

But even in cases where the parents manage to provide a reasonable, stable life for the children, the fact that they have no prospect of a legal future can't help but have a dampening effect on their aspirations and achievement. We've seen this most vividly among the Turkish gastarbeiter in Germany, though, I would argue, we also see something very much like it among underclass blacks in the United States. People who feel like permanent outsiders--who feel, as one kid put it to me recently, that they're permanently cut off from the "real America" and have no chance of ever succeeding there--don't tend to try very hard or do very well on mainstream ladders of success, be they at school or anywhere else. No wonder some look for lives elsewhere--in neighborhood gangs or worse. Angela is the exception in her world. Most of her cousins dropped out of school a long time ago. And with 10 to 12 million illegal immigrants like her parents raising families like hers somewhere in the U.S. today, all too many of their children are going to end up like that--like the cousins--to their detriment but also to ours, to America's.

So these are some symptoms--symptoms of what's wrong with our immigration system--and the stories I've told you hardly exhaust what you see out there. I could go on and on.

I could tell you about the immigrant smuggling business that now flourishes all along the border and in every town with a significant illegal population--and believe me, there are towns like that in every state in the country now. It's a multimillion-dollar business and as brutal as you can imagine. And it takes a toll not just on immigrants but also far more broadly. One of the most grisly examples is again from Arizona: a deadly shootout about a year ago on the interstate between Phoenix and Tucson that turned out to be two rival gangs fighting over a vanload of illegal migrants, just as they might once have fought over a vanload of illegal drugs. One vehicle chased down the other, and the men inside opened fire with automatic weapons, killing four people and wounding several others, including a few who just happened to be driving by on the interstate.

Still other stories I could tell you: about the deaths on the border. The funneling of the traffic away from urban crossings and into the southwestern desert, whether in California or Arizona or, increasingly, New Mexico, means that a lot of people die on the two- or three- or ten-day trek through empty, arid, scorching, or freezing terrain. According to the Border Patrol, whose estimates are thought to be low, some 325 died last year, and more than 2,500 died in the past decade.

One of the more grisly stories I've heard lately, and it may or may not be true--I haven't been able to verify it--is about former Secretary of State James Baker, who went hunting this summer with one of his Texas buddies who happens to own a ranch on the border. I'm not sure exactly what they hunt down there, but they were out early one morning with the gear and the dogs, and suddenly one dog got all excited, and the hunting party thought they were closing in on some prey. And they all rushed over to the spot where the dog was sniffing and carrying on, and what did they find, but the stinking corpse of a migrant. And of course he was just one of many--one of many to die on or not far from that ranch this summer.
 
And finally, just one more story: about an immigration enforcement agent named Lee Morgan, whom I met this summer and who does investigative and undercover work along the border. Morgan's a Vietnam vet, thirty years in the immigration service. He's got his Bronze Star and his Purple Heart and three or four folded American flags--comrades' commemorative flags--displayed in his office. But patriot that he is, he couldn't be angrier or more bitter about his job. "What if another 9/11 happens and I'm responsible?" he asked me. "What if the bastards come across here in Arizona and I don't catch them because I'm so busy chasing a busboy or a gardener that I don't have time to do my job--my real job--stopping terrorists? I don't [know]how I'll live with myself."

And on and on--I'm sure you get the point. The system is broken--and you don't have to be skeptical about immigration to be upset about it. It doesn't matter if you're a Democrat or a Republican, whether you're more concerned about law and order or about human rights. The system just isn't working--by any standards. This erosion of the rule of law, this risk to our security, just isn't in our interest--America's interest. And we all have a stake in fixing it--fixing it so that it actually works.

So the next step is moving from symptoms to diagnosis, and my diagnosis starts with economics.

Most immigrants come to the United States to work. They don't come to be unemployed--it's much better to be unemployed at home in Mexico. It's warmer in Mexico, and cheaper, you're surrounded by supportive family and friends. And they don't come to get welfare either - because most immigrants aren't eligible for welfare, and illegal immigrants aren't eligible for any kind of government benefit except public schooling and emergency-room hospital care.

So they come to work, and we need them, for two reasons. Not only is our shrinking, aging, ever-more-educated labor force leaving us with a shortage of low-wage workers; but it's doing so at a time when changes in our economy make many sectors more reliant than ever on unskilled labor. The evidence for both of these changes is largely statistical, and I don't want to overwhelm you with numbers, but let me throw out just two sets of figures. The first: in 1960, half of all American men dropped out of high school. Today, only 10 percent do--the rest finish and get diplomas, with all that means for the kinds of jobs they can land. The result: we no longer have much of a native-born working class that's willing to do manual labor and dirty, humiliating jobs. We no longer raise our kids to be busboys or farmhands. As a society, we've developed beyond that.

But our economy isn't accommodating this social change--or not completely, anyway. And here's the second set of numbers: the changing wage rate in the American meatpacking industry. Once upon a time, meatpacking was a job for highly skilled workers-- "knife men," they called them--who earned upwards of $20 an hour. Today, the work has been automated and the tasks have been simplified, and the wage is more like $5.15 an hour - if that much. So yes, the knowledge economy is creating more jobs for highly educated workers. But there is also a growing need at the other end of the job ladder. In many sectors--thanks to technology and global competition--companies are changing their production methods to eliminate high-skilled, high-paying work and replace it with easier, lower-paying jobs. Jobs that only immigrants want to do today.

Now of course, these changes are wrenching for some American workers, but by and large immigration is good for the U.S. economy. Not only do immigrants fill jobs Americans don't want to do. But because of that--and because they're so flexible and willing to move at the drop of a hat to wherever the jobs are--they keep the economy growing at a pace that few comparable economies can match. Some of the most striking evidence for this comes from comparisons between cities and states that have attracted large numbers of immigrants and cities and states that have attracted relatively few. The high-immigrant places invariably outperform their low-immigrant counterparts in job creation and income growth. They also show far lower unemployment.

In other words, far from taking work from Americans, immigrants help create jobs for the native-born. That's how economic growth works: it's the multiplier effect. After they finish their shifts at the meatpacking plant, immigrants come out into the town and buy shoes and groceries and washing machines and hire plumbers to install them--and this creates jobs for other Americans. Immigrants are also extremely entrepreneurial. Over their lifetimes, even the poorest pay in more in taxes than they take out in government services. And for several decades now, it's their payments that have kept the social security system afloat.

So that's the first component of the diagnosis: international supply and demand. Together, supply and demand generate a robust flow across our southern border: somewhere in the range of a million people a year. Not only economically but also in other ways, this flow works to our advantage. Just think about the drive and resourcefulness that it takes to get here from a small town in rural Mexico or the Philippines or China. How can that drive not be good for American society? Immigrants and their families revitalize our burnt-out urban neighborhoods. Foreign-born inventors hold more than a quarter of the patents in the U.S. today. Their kids are overrepresented in every science fair in the country. And together, parents and children reinvigorate our patriotic spirit--just look at the disproportionate number of Hispanic names among those fighting and dying in Iraq.

But--and here's the heart of the diagnosis--native-born Americans' fears about the consequences of immigration keep our quotas well below the size of the actual flow, generating an inevitable spillover into the black market. The problem isn't the immigrants. The problem is that our current law makes about a third of this highly beneficial flow illegal. Think of it as a reservoir or a river we're trying to channel into a pipeline. The problem isn't the flow: we need the water. The problem is that the pipeline isn't big enough. And the result is that we spend billions of dollars a year trying to enforce unrealistic limits we're unable to make stick, while growing numbers of Americans--in some cases, entire industries and vast underground communities--live on the wrong side of the law.
 
Okay, you say, or I can imagine you saying. Maybe so. Maybe most immigrants do come to work. Maybe immigration is about globalization--a product of increasingly integrated labor markets. And maybe it's even good for the economy. But that doesn't mean we have to accept that integration--or be tyrannized by it. Globalization isn't inevitable. And we could just say "no" --much as we could just say "no" to international trade. Look at history: nations have often said "no" to trade.

And you're right. In this case too, we could opt out. Instead of 4.4 percent economic growth, we could settle for less: 4 percent, maybe, or 3.4 percent--no one knows what the figure would be if we cut off immigration, though you can be sure it would be lower. We could build a wall all along the border and station men with guns every couple of yards. We could run dragnets in big cities and require a national I.D. card. We could do it--we could cut ourselves off from the global labor market. But do we really want to pay the price--and I don't just mean economically? Because make no mistake--it would be no small adjustment. The enforcement effort it would require would transform the way we live in the U.S. today. And despite their considerable misgiving about immigrants, I don't think most Americans would choose to pay that price.

So if you accept that--if you accept that in practice we don't really have the option of cutting ourselves off from the world--let's go back to my diagnosis. Because as I see it, just about all the symptoms I described to you are the products of the spillover--products not of immigration per se, but of the mismatch between the flow and our quotas. It's the mismatch that overwhelms our men on the border. After all, if our quotas were more realistic--more commensurate with the flow--the Border Patrol would have a much easier time enforcing them. It's the mismatch that creates the need exploited by the international smuggling cartels. It's the mismatch that forces young people like Angela Perez to live on the edges of the "real America" without a future. It's the mismatch that's eroding the rule of law in our communities. And it's the mismatch that's making it all but impossible for men like Lee Morgan to do their jobs, protecting the nation against real security threats.

So that's the diagnosis as I see it. What's the remedy? Well, let's go back for a minute to our polarized debate on immigration policy. Obviously, as I'm sure you can tell by now, I'm guilty. I am one of those people who likes immigrants, and that drives a lot of my thinking, including about policy. But even for those of us who believe the influx is good for America, that can't be the end of the story--because we still need borders. The other side is right about that--and about a number of other things.

Not only on the border, but also in the workplace, enforcement of our immigration law is close to meaningless. In many places in America, immigrants have overwhelmed the social services--to the point that schools and emergency rooms don't work for native-born Americans. Personally, I'm optimistic about assimilation--and we can talk more about that later if you like. But it's far from certain that today's immigrants will assimilate successfully, and if they don't--if the dire scenarios are even close to right--it will spell disaster for the nation's future. So it's not enough to claim or even prove that immigrants are good for the economy. "We're not just an economy, we're a nation," as Patrick Buchanan likes to say. And we still have to manage the flow in a way that works for us as a nation.

And that's not as easy as it sounds. I think we've seen why closing the border is no option. But neither is just opening the gates a possibility. We can't let every poor, hungry Mexican or poor, hungry Chinese come and try their luck in America. So we're back to where we started. We need to find a middle course. But what exactly is that middle course? What is the immigration policy that makes sense in today's increasingly integrated but dangerous world?
 
Well, I submit to you, the compromise has to meet four criteria. I think they're all obvious--painfully obvious. But astonishingly, our current immigration policy doesn't meet a single one of them.

First, without question, the compromise has to be in our interest--our national interest. Immigration policy isn't a suicide pact. Nice as it is to be altruistic or to be a good neighbor, I don't think we owe would-be immigrants anything. This, in my view, is where much of the pro-immigrant camp gets it wrong, and even President Bush, I believe, is on the wrong track when he talks about "compassion" with regard to immigration policy. Immigration policy has to be hardheaded, and it has to be driven by our needs as a nation.

Second, also pretty obvious, I think, but hardly true today, our immigration policy ought to be realistic. We ought to start by acknowledging the reality of the global marketplace. We ought to accept that we can't or aren't going to turn off the flow. (And this of course is where the restrictionist camp is most seriously wrong - they pretend we can just turn off the faucet.) And we also ought to accept the reality of the existing underground economy, which some economists estimate may account for as much as 10 percent of American business today. Sound policy would acknowledge both of these realities--the flow and the underground pool it has created--and bring them above ground. I'm switching metaphors--and forgive me--but let's get serious and acknowledge this tiger and figure out how to ride it, rather than letting it ride us.

Third, also so obvious that it hardly needs arguing, we've got to do a better job of securing our borders. As is, several hundreds of thousands of unauthorized people walk across the border into our country every year--without benefit of background checks or controls of any kind. And in an age of global terrorism, obviously, that's unacceptable. But--and here's where I part company from the restrictionists--since we're not going to stop this traffic, we've got to create a way for most people to come legally so we can zero in on the tiny handful who pose a real threat.

Fourth and finally, there can be no question: not only must we regain control of our borders, but--arguably even more important--we must restore the rule of law in our communities. Here too, the restrictionists are right--or at least half right. "What part of 'illegal' don't you understand?" they ask. And it is a question that bothers many Americans--and understandably so. Of all the costs that come with illegal immigration, none is more corrosive than its consequences for the rule of law.

It's not just the vast underground communities where most people shrug at the law on a daily basis. It's not just the entire American industries that operate on the wrong side of the rules, relying on international criminal cartels to recruit the workers they need to keep their businesses open. It's not just the millions--literally millions--of fake names and the sea of false documents that go with them. And it's not just the taxes we're forfeiting, which Barron's just last week estimated may run into the hundreds of billions of dollars. We are sacrificing something much more important and more valuable than all of this--and that's our essential character as a law-abiding nation. Both our prosperity and our freedoms are based on that rule of law--I'm sure I don't have to explain that to anyone in this room--and we're putting it at risk.

Another way to think about this: consider what we're asking the American people to swallow. It's one thing--and quite a request, by the way--to ask them to accept a million, maybe a million and half, new immigrants in their midst every year. A million and a half non-English-speaking foreigners, many of them uneducated and unskilled, who may or may not ultimately fit in here. But as things stand now, we're also asking the American people to accept an inevitable end to the rule of law as they know it--guaranteed, routine, ongoing illegality in their neighborhoods and workplaces. It's an unthinkable request--no matter how good immigrants are for our economy. But that's exactly what we're asking--that's what's happening. And we've got to do something about it--something dramatic.

So those are my four criteria. And where do they leave us? What's the immigration policy that makes sense for the United States today? Well, I hope it doesn't come as an anticlimax, but I believe that President Bush was very much on the right track with the principles he announced almost exactly a year ago. He didn't get everything right--and I think he knew it. That's why he announced only principles. He didn't say, "Read my lips." He said this is a first draft, and he challenged Congress to go to work filling in the details. But as first drafts go, I think his was pretty good. I think it meets all four of the criteria I just laid out, and I think it stands a good chance of restoring the integrity of our broken system.

I'm sure you know the outlines of his plan. The central idea is to connect willing workers with willing employees--not to create a new flow or add to the total number that enter the county each year, but merely to give most of the people who would otherwise come illegally a safe, orderly, legal option. The president proposes to do that with a guest worker program--a program, first and foremost, for those on the other side of the border and contemplating the trip.

Second, you can't build a legal structure on an illegal foundation--and you can't expect most employers to use a guest worker program if they still have access to millions of unauthorized laborers already here in the United States. So in addition to enlarging the pipeline into the country, we also need to eliminate the existing black market. This is no easy task: we're talking, after all, about eight to 12 million people, maybe more. But the president proposes to get rid of it by creating a path to legalization--by asking illegal workers who can otherwise prove their bona fides to come forward and pay a penalty and get on the right side of the law, and then we would allow them to participate in the guest worker program.

This is, of course, the most controversial part of the proposal--and, I believe, the most misunderstood. The Bush plan isn't an amnesty. The president isn't suggesting we just wave a wand and tell people that what they did wrong doesn't matter. What he's offering them is a chance to earn their way in out of the shadows--not only for their sake, but for ours. Because short of deporting them--short of arresting and removing eight to 12 million people--that's the only way we're going to eliminate the existing black market and create a solid foundation on which to build a new, legal system.

So those are the two key components--a provision for those coming and one for those already here. And going back to our criteria, what stands out for me is the president's realism. He recognizes that the all-important first step in addressing the problem is accepting the reality of international supply and demand. He understands the business need for a steady stream of reliable workers. And he grasps that the goal of policy should be to manage and make the most of the market-driven flow, not try futilely to interdict it. And this is nothing short of revolutionary--commonsensical, maybe, but still, in the circumstances, revolutionary.

But even that doesn't quite convey what's so important about the president's plan. And what I'd like to focus in on and highlight for you in the time I have left is what I think is arguably the most significant and least appreciated part of the plan--and that's its effect on immigration enforcement.

I say least appreciated, because as I'm sure you know, many critics look at the president's proposal and they see only liberalizing: a bigger pipeline, more visas, a second chance for people who have broken the law. They see liberalizing when they feel what's needed is tightening, and they accuse the president of being soft on enforcement. But these critics couldn't be more wrong. The president is not soft on enforcement. This isn't even a situation where what he's proposing is half right and what's needed is to pair or balance or complement his ideas with tougher enforcement. On the contrary. His approach is the only way we're going to get control of our borders--the only path to enhanced security and restoring the rule of law in our communities. Yes, it's paradoxical: we are talking about liberalizing in order to get better control. But that's the genius of the Bush plan--and that's where it's really going to make a difference in the way we live in America today.

So what am I talking about? What do I mean by "liberalizing in order to get control"? Well, let's step back a minute. Let me go back to the border--another evening in another cruiser with another young Border Patrol agent. And this particular young man said one of the smartest things anyone has ever said to me about immigration policy. We were several hours into the evening shift, and we were both finally relaxing. He'd gotten over his initial, official stiffness and was beginning to tell me what it's really like on the job--beginning to tell me about the frustrations. And I'll never forget it--he was almost in tears. "But don't you see, Tamar?" he asked. "I'm caught in the middle. We're all caught in the middle. When it comes to immigration, we pass the law to keep one side happy--and then we don't enforce it to keep the other side happy." And of course, he was exactly right.

This is the status quo, and it has been for a hundred years or so now--ever since we've had laws to limit immigration. This is the reason for the mismatch I talked about earlier. Congress responds to the public's fears--fears about economic displacement, assimilation, crime, a changing ethnic stock, you name it--with showy, tough-sounding, restrictive laws. But then, for business and other reasons, we don't enforce that legislation. We wink and blink and look the other way. It's the original "don't ask, don't tell" situation. And politically, I suppose you could argue, it's not a bad compromise. But the price is very, very high--because it means that our immigration law is essentially a dead letter. A dead letter here at home and largely a joke abroad. And this is what the Bush plan promises to change by introducing more realistic legislation--more honest quotas, more in line with the reality of our economic needs--and then enforcing those new laws to the letter. Making them stick with the seriousness that we apply to the all rest of our legal code--but which, when it comes to immigration, we've never ever even tried to apply.
 
How? Well, the best analogy is Prohibition. Our broken immigration system is our era's Prohibition. In each case, there's the intractable reality. During Prohibition, it was drink. In our day, it's global labor markets and the migrant flow they generate. In each case, there's bad law - unrealistic law, out of sync with human behavior and established patterns. And as Prohibition teaches, it's extremely difficult to enforce an unrealistic law.

But realistic law is another matter. Just look at alcohol consumption. More realistic limits combined with modest enforcement efforts--liquor licensing, blue laws, import duties and the like--now work very effectively to keep both sales and use in check. And so too with immigration: once we've brought our quotas more into line with market reality, we'll find it dramatically easier to enforce the law, both on the border and in the workplace.

The existing arrangement--overly strict laws that we can't and in many cases don't even try to make stick--must be replaced by a new deal: realistic laws strictly enforced. The new bargain must be clear and unequivocal: employers who play by the rules will get the labor they need through the guest worker exchange, those who don't will be cut out of the program. Migrants too must be made to understand: a new era has dawned. The United States is open for business--officially now--but the old days of "don't ask, don't tell" and a pervasive underground economy are over.

A significant initial enforcement push may be necessary to drive home this new bargain, but once it's been established, the enforcement challenge will ease dramatically. The key factor here is the ratio of those who break the law to those who abide by it. In the current climate, in many industries, everyone flouts the law--and only chumps even think of obeying. A new bargain will create a new climate. Public attitudes toward hiring illegal immigrants will change; tolerant indifference will be replaced by stigma. An offense now so routine that even law-abiding families rarely hesitate to hire unauthorized help will once again be seen as a crime.

And as a result - and this will be the critical payoff of the Bush proposals--the ratio of legal to illegal behavior will change. Most people will abide by the rules, and offenders will stand out, making it much easier for law enforcement to zero in on them. So too on the border and in immigrant communities. In the current climate--under our current unrealistic laws--zero tolerance (or anything even close) is inconceivable. Under the new bargain, meaningful control will become a plausible goal.

So one of the things I've been thinking a lot about recently is the mechanisms--the actual enforcement tools--that we might use to establish this new climate. And the first most important principle in this regard is that border enforcement isn't enough. The Jordan Commission has been much maligned in the twenty-odd years since it came up with the idea of making employers a critical part of the enforcement effort--and the employer sanctions we instituted in the mid-1980s haven't worked. But the Commission's impulse was fundamentally right: employers are on the front lines and must be enlisted--and they are ultimately much preferable to barrio sweeps and workplace raids and roundups and massive deportations.

The challenge is to design an employer-based system that works. But we've learned a lot in twenty years, and I'm convinced that's doable. And the key will be getting employers to police themselves--using the threat that if they violate the rules, they'll be barred from participating in the guest worker program and will have no access to the labor they need.

The system will surely involve some kind of biometric visas and an electronic database that contains social security numbers and immigration information. Still other components of a comprehensive enforcement scheme: vigorous anti-smuggling prosecutions, cooperation with sending countries, high-profile crackdowns on employers who flout the law. Bottom-fishing, exploitative employers who won't play by the rules--who insist on going around the guest worker program to get the cheapest possible labor and then abusing it--will get the book thrown at them. Big, embarrassing court cases, million-dollar fines, and worse.

The devil is in the details, but you get the idea. And the point is not only that this will create a new climate: a climate less like Prohibition and more like the effective, reliable law enforcement that Americans expect in every other area of their lives. But think of the dividends for national security. Foreigners seeking to disguise their true identities will no longer be able to buy fake ID cards on street corners in every American city. The Department of Homeland Security will know who's here and what their names are and where to look for them if they turn up on an international watch list. And meanwhile, agents like Lee Morgan will be able to get back to their real jobs: tracking criminals and terrorists, not your next waiter or my gardener.

And best of all, we can do all this without a draconian crackdown--a crackdown of the kind we'd need even to enforce the quotas we have, let alone to close the border. We don't need anything like that. All we need is to bring the law back into line with market reality and then use sensible, modern, commonsense enforcement and compliance measures of the kind we use in lots of other realms of American life.

So as I think you see--and I'm coming to a close now--I'm a big fan of the president's plan. And I'm hopeful that the process ahead--the political process I promised you I'd talk about (I'm finally getting there)--will help to make it even better.

What will that process look like? Well, it's certainly going to have to be bipartisan. Republicans alone don't have the votes to pass immigration reform--the party is too divided on the issue to get a bill through Congress without Democrats. I sometimes say that the GOP is divided into thirds on immigration, but the truth is it's more like a quarter, a quarter, and half: one quarter supportive of the president's plan, one quarter against it under any circumstances--I call them the "over-my-dead-body" faction--,and just about half of the party up for grabs. The challenge ahead is going to be to persuade that middle half--bringing centrist and conservative Republicans on board without alienating too many Democrats. And that's going to require quite a political juggling act. But in my view neither of these requirements will necessarily hurt the legislation: not the need for significant bipartisan support or the need to persuade skeptical Republicans. On the contrary, I think both imperatives will significantly improve the bill.

Why? Well, let's take them one at a time. A bipartisan bill will be better than a partisan one because it will be more likely to meet the needs of all the different kinds of Americans who have a stake in a functioning immigration system. After all, a real solution--any solution worthy of that name--will have to work for both business and labor, both Anglos and Hispanics, both immigrants and the native-born. It will have to include tough enforcement measures but also civil liberties guarantees. There will have to be sections on security, on citizenship and assimilation, on covering the costs of local schools and hospitals. And neither party alone is likely to get all of these aspects right. So yes, bipartisan authorship is necessary for political reasons. But it will also, I believe, make for a better bill.

And so too with persuading dubious Republicans--because in this case, if ever there was one, the dubious Republican center speaks for the dubious public. And believe me, the American public is dubious about immigration reform. Just turn on your radio--immigration's a staple on the talk-radio circuit--or look at any poll. People don't understand this issue very well yet: they don't see beyond the symptoms of the broken system or beyond their own anxieties. And those of us who believe in reform of the kind the president has proposed have a lot of work to do.

Still, dubious and skeptical are not the same as unpersuadable or dead-set against. And I speak here from some experience--once again, experience from Arizona. In addition to riding around on the border in Arizona, I spent a lot of time this fall working on the campaign to defeat the Arizona anti-immigrant ballot initiative, Proposition 200. And what I learned from that campaign--what I learned from listening to Arizonans talk about immigration--is that the public is open to a variety of solutions to the problems that come with our current approach.

Yes, people--especially people in a border state like Arizona--are frustrated and angry. They know the system is broken. They're worried about the social-service costs. They're concerned about whether today's newcomers will assimilate. And--more than anything-- they're fed up with the weakening of the rule of law. They want the government to fix all this--and in Arizona they voted to say so in November, passing Proposition 200 by a 10-point margin.

But--and this is my point here--most voters I talked to in Arizona were far from certain what the solution to these problems is. They don't necessarily want a draconian crackdown. They don't necessarily want to close the border. And most aren't anti-immigrant. What they want is to see us regain control--control on the border and in their communities. They want a solution that works. They just don't grasp yet--or many don't grasp--that reform of the kind President Bush is proposing is that solution. And that's the case we have to put to them.

What exactly is the case? Well, I hope it's the case I've made here tonight. That the answer is neither open nor shut. That policy should hew as closely as possible to how the world really works. That we should accept the reality of international supply and demand and the flow it generates, then seek to manage that flow to our advantage. That paradoxical as it is, a liberalizing reform of the kind the president is proposing is actually the only way to retake control of our borders. That--and I think this is the sharpest selling point--we can reap the benefit of a robust immigrant flow without the illegality that currently comes with it. And that in the long run, America can have its cake and eat it too --can remain a nation of immigrants and open to the world, while also maintaining our exceptional character and enhancing our security.

How long will it take to persuade the American people of this case? What are the prospects for reform this year, or this term? Boy, do I wish I could tell you. I ask myself every day--usually several times a day. It's one of those questions no one knows the answer to.

But one way or another, before too long, I'm convinced we're going to get there. We have to. Because reform along these lines is the only solution--the only solution that can work in the long run. And I'm confident that before too long the American people will have the common sense to see that case and embrace the solution.

I'll predict that much and I'll close with it. The question isn't if, it's when.

Thank you very much.