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Conservatives Spar over Economics of Immigration Reform

Tuesday, 7 May 2013 | 12:20 AM ET
Economics of Immigration Reform
The Heritage Foundation is out with its long-awaited study on the economic impact of immigration reform. Robert Rector, Heritage Foundation and Doug Holtz-Eakin, American Action forum president, discuss. Dean Garfield, Information Technology Industry Council, weighs in.

The Heritage Foundation's new study on immigration reform is prompting a fiery debate among conservatives over the Senate's bipartisan immigration bill.

Co-author of the Heritage study Robert Rector and American Action Forum's Douglas Holtz-Eakin faced-off on the economics behind the immigration bill on CNBC's "The Kudlow Report" Monday night.

"With amnesty what you're doing is taking ten million illegal immigrants with an average education of 10th-grade and giving them access to 80 different programs, Social Security, Medicare and Obamacare," Rector said." "The net cost of that is that you're going to increase government spending by about nine trillion dollars."

(Read More: Battle over U.S. immigration bill starts in Congress)

The study states immigrants will only pay back about three trillion dollars in taxes, costing taxpayers $6.3 trillion in government benefits over a period of five decades.

"You find that not only do these kids not pay back the $6.3 trillion deficit that their parents left, they themselves will also be in deficit," Rector said. "They will receive more in benefits than they pay in taxes."

But outspoken conservatives disagree with Heritage's argument, saying comprehensive immigration reform is exactly what the country needs to boost economic growth.

"It's a study that is biased against finding any kind of success, and there's a lot left out," said Douglas Holtz-Eakin, President of the conservative think tank American Action Forum.

American Action Forum published its own study on the economic benefits of immigration reform stating comprehensive reform could boost GDP by 0.9% and reduce the federal deficit by more than $2.5 trillion over a decade.

"You've got a comprehensive bill that's under consideration," Holtz-Eakin said. "It has border security, employer verification, agriculture programs, H1-B's, temporary worker programs, a change in core-visa system toward merit-based. You throw all of that out and analyze strictly on the merits of one narrow provision where you assume 100% take-up and no economic progress, it doesn't seem like a fair reading of the bill."

Heritage President and former South Carolina Senator Jim DeMint said on CNBC last week he is in favor of lawful immigration reform but the Senate Gang of Eight's immigration proposal will only "make the problem worse."

(Watch: DeMint on the Fight for Immigration Reform)

"The division is between real immigration, lawful immigration, and those who came here unlawfully, amnesty," DeMint said. "Lawful immigration is good for our economy. This amnesty bill is going to give legal status to those who generally are not going to add to our economy. Actually, it's going to be a huge cost to the American taxpayer."

The Senate Judiciary Committee is expected to begin consideration of the 844-page bipartisan bill on Thursday.

--By CNBC Associate Producer Elizabeth Schulze. Follow her on Twitter: @ESchulze9



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  • Lawrence Kudlow is a CNBC senior contributor. Previously, Kudlow was anchor of CNBC's prime-time program "The Kudlow Report"