Tag: border

Senator Cruz’s Border Bill Cannot Pay for the Wall

Senator Ted Cruz (R-TX) recently introduced the Ensuring Lawful Collection of Hidden Assets to Provide Order Act, also known as the “El Chapo Act,” to fund President Trump’s proposed border wall.  The media reports that Cruz’s bill is similar to one introduced by Representative Jim Sensenbrenner (R-WI) in February.  Cruz’s bill would apportion some money seized from drug lords like El Chapo to the construction of a border wall. 

There are several problems with this idea.

First, cash seizures cannot pay for the border wall.  The inspector general at the Department of Justice found that the DEA, ATF, and FBI only seized assets and cash worth $5.36 billion from 2007 through 2016.  A raid in Mexico in 2007 yielded $205 million in seized cash.  The agencies spent those funds, gave them to local or state law enforcement, or returned some of them to victims.  As my colleague David Bier and I wrote, building and maintaining a border wall over the next decade will cost about $44 to $99 billion.  If 100 percent of the seized funds from 2007 to 2016 went toward border wall construction, then 126 to 310 miles of it would have been built by now along the roughly 2000 mile long border.  That amounts to an average of 14 to 35 miles a year. 

Even if the federal government seized all $14 billion from El Chapo (it won’t), that would at most cover a third of the decade-long cost of the border wall and likely no more than a seventh.         

Second, just because money seized from Mexican drug dealers is funneled to paying for the wall doesn’t mean that Mexico would be paying for the wall.  That money was going to be seized anyway by the federal government and mainly spent by U.S. law enforcement agencies.  By redirecting the flow toward the construction of a border wall, this bill will make those U.S. law enforcement agencies pay for it in foregone revenue.  A redirection of revenue that was already coming in cannot be a new stream of revenue to pay for a border wall.  At best, it is an accounting trick to make it look like Mexico is paying for the wall.  I am not endorsing the government’s seizure of drug money, the War on Drugs, or even the current budgets of other U.S. law enforcement agencies – I am merely pointing out that other U.S. agencies will be foregoing these funds.  I doubt that Congress or the Trump administration will let their revenues shrink, so taxpayers will likely plug any spending gap caused by the redirection of funds toward a border wall.

Third, much of the disagreement over the cost of the border wall concerns the cost of eminent domain.  Most of the land that the government will need to seize through eminent domain to build the border wall is in Texas where most of the land along the border is privately owned – which is one reason why 61 percent of Texas adults oppose the border wall.   

Fourth, the stock of illegal immigrants is at its lowest point in a decade and annual cross-border apprehensions are at or near a 17-year low.  Even if a border wall was a cheap and effective way to stop illegal immigration, the sustained collapse in cross-border apprehensions makes it a silly expenditure.  It’s like a perfectly healthy person putting their formerly broken-but-now-healed arm in a cast 9 years after the injury healed.

In essence, Cruz’s bill would redirect seized drug money in order to fund further seizures of private property along the border and to pay for an expensive wall that is unnecessary.

The Myth of Border Insecurity

Many Americans feel that the United States government is not in control of the border and that the lack of control is a deliberate government policy. Nothing could be further from the truth. The government has greatly expanded the scale and scope of immigration enforcement on the southern border in recent decades. 

The government built fencing on the southwest border and increased the mileage from zero in 1990 to 653 today (Figure 1). Some of that fencing is porous and much of it is made to deter vehicles, but it is located in some of the previously most heavily trafficked areas. The effect was that unlawful immigrants were forced to cross in new, more dangerous areas. President-elect Donald Trump said he wants a 1,000-mile wall at the border, which means he’s already most of the way there.

Figure 1

Border Fencing

 

Source: Congressional Research Service.

Have Terrorists Illegally Crossed the Border?

Yesterday, Cato published my policy analysis entitled “Terrorism and Immigration: A Risk Analysis” where I, among other things, attempt to quantify the terrorist threat from immigrants by visa category. 

One of the best questions I received about it came from Daniel Griswold, the Senior Research Fellow and Co-Director of the Program on the American Economy and Globalization at the Mercatus Center. Full disclosure: Dan used to run Cato’s immigration and trade department and he’s been a mentor to me. Dan asked me how many of the ten illegal immigrant terrorists I identified crossed the Mexican border?

I didn’t have a good answer for Dan yesterday but now I do. 

Of the ten terrorists who entered the country illegally, three did so across the border with Mexico. Shain Duka, Britan Duka, and Eljvir Duka are ethnic Albanians from Macedonia who illegally crossed the border with Mexico as children with their parents in 1984. They were three conspirators in the incompetently planned Fort Dix plot that was foiled by the FBI in 2007, long after they became adults. They became terrorists at some point after immigrating here illegally. Nobody was killed in their failed attack.

Gazi Ibrahim Abu Mezer, Ahmed Ressam, and Ahmed Ajaj entered illegally or tried to do so along the Canadian border. Ajaj participated in the 1993 World Trade Center bombing, so I counted him as responsible for one murder in a terrorist attack. Abdel Hakim Tizegha and Abdelghani Meskini both entered illegally as stowaways on a ship from Algeria. Shahawar Matin Siraj and Patrick Abraham entered as illegal immigrants but it’s unclear where or how they did so.

Based on this history, it’s fair to say that the risk of terrorists crossing the Southwest border illegally is minuscule.

What the Overstay Rate Tells Us about Border Security

There are two ways to become an illegal immigrant in the United States.  The first is to enter illegally, usually across the Southwest border.  Those folks are sometimes called EWIs, short for entered without inspection.  The second way to become an illegal immigrant is to enter legally and then lose legal status, often by overstaying a temporary visa.  

The majority of new illegal immigrants were EWIs until recently.  A recent paper by Robert Warren and Donald Kerwin at the Center for Migration Studies found that overstays accounted for 58 percent of new illegal immigrants in 2012, a rapid increase over the course of a decade (Chart 1).

Chart 1

Overstays as a Percent of all Illegal Entries

 

Source: Warren and Kerwin.

 

At an immigration hearing last week, several witnesses emphasized that continued illegal immigrant entries along the Southwest border and a rising percentage of overstays mean that America’s immigration system is insecure.  In contrast, the higher overstay rate is evidence of fewer illegal immigrants crossing the border as EWIs. 

In calculating the percent of new illegal immigrants who are overstays, the number of EWIs is in the denominator added to the number of overstays.  The number of overstays is the numerator.  The falling number of illegal immigrants crossing the Southwest border without inspection shrinks the denominator on its own, thus boosting the overstay rate.  The surge in the overstay rate is not a lack of security at points of entry and exit but caused by a yuuuuge fall in illegal immigrants crossing the border. 

As evidence for that, I kept Warren and Kerwin’s estimates of the overstay population unchanged but held constant at 2000 levels the number of illegal immigrants entering without inspection.  In other words, I didn’t change the flows in the overstay population but just froze the number of illegal immigrants entering without inspection at the higher 2000 number.  Doing that lowers the 2012 overstay rate to 24 percent – less than half of the rate it actually was and lower than at any point during the entire 30 year period in their paper.

Warren and Kerwin admit that their overstay rate results are sensitive to their estimates of EWIs and how many overstays actually stay long enough to become illegal immigrants.  Small changes in those numbers can shift their findings dramatically.  However, the relationship between the number of CBP apprehensions and the overstay rate supports my simple point (Chart 2).  As the number of apprehensions fell because fewer immigrants attempted to enter the United States, overstays provided a greater percentage of new illegal immigrants.

DACA Did Not Cause the Surge in Unaccompanied Children

In June, 2012 the Obama Administration announced that it had authored a memo deferring the deportation of unauthorized immigrant childhood arrivals in the United States, a program known as deferred action for childhood arrivals (DACA).  The memo directed then Secretary of the Department of Homeland Security to practice prosecutorial discretion toward a small number of unauthorized immigrants who fulfilled a specific set of characteristics.  In essence, some unauthorized immigrants who had come to the United States as children were able to legally stay and work–at least temporarily. 

Did DACA Cause the UAC Surge?

Some politicians contend that DACA is primarily responsible for the surge in unaccompanied child (UAC) migrants across the border in recent years.  A recent House Appropriations Committee one-pager stated that, “The dire situation on our Southern border has been exacerbated by the President’s current immigration policies.”  Proponents of this theory argue that DACA sent a message to Central Americans that if they came as children then the U.S. government would legalize them, thus giving a large incentive for them to come in the first place.  Few facts of the unaccompanied children (UAC) surge are consistent with the theory that DACA caused the surge.

First, the surge in UAC began long before the June 15, 2012 announcement of DACA.  It is true that DACA had been discussed in late May 2012 but the surge was underway by that time.  From October 2011 through March 2012, there was a 93 percent increase in UAC apprehensions over the same period in Fiscal Year 2011.  Texas Governor Rick Perry warned President Obama about the rapid increase in UAC at the border in early May 2012 – more than a full month before DACA was announced.  In early June 2012, Mexico was detaining twice as many Central American children as in 2011.  The surge in unaccompanied children (UAC) began before DACA was announced.

Second, the children coming now are not legally able to apply for DACA.  A recipient of DACA has to have resided in the United States continuously from June 15, 2007 to June 15, 2012, a requirement that excludes the unaccompanied children coming now.   

Third, if DACA was such an incentive for UAC to come from Central America, why are so few Nicaraguan children coming?  They would benefit in the same way as unaccompanied children from El Salvdaor, Honduras, and Guatemala.  The lack of Nicaraguans points to other causes of the surge.

The timing, legal exclusion of the UAC from DACA, and lack of Nicaraguans indicate that DACA was not a primary cause of the surge.  Of the 404 UAC interviewed by the United Nations High Commissioner for Refugees since 2011, only 9 mentioned that U.S. laws influenced their decision to come to the United States.  Other American laws could have influenced the unaccompanied children to come but DACA is not the main culprit.           

Details on DACA

The DACA beneficiaries, at the time of the memo, would have to fulfill all of these requirements to have their deportations deferred:

  • Under the age of 31,
  • Arrived to the United States before reaching their 16th birthday,
  • Entered the United States without inspection or overstayed a visa prior to June 15, 2012,
  • Continuously resided in the United States from June 15, 2007 to the time of the memo,
  • Physically present in the United States on June 15, 2012, as well as at the time of requesting deferred action from United States Citizenship and Immigration Services (USCIS),
  • Been in school at the time of application, or have already graduated or obtained a certificate of completion from high school, or have obtained a general education development (GED) certificate, or are an honorably discharged veteran of the U.S. Coast Guard or the U.S. Armed Forces
  • Not been convicted of a felony, significant misdemeanor, or three or more other misdemeanors, and do not otherwise pose a threat to national security or public safety.

Beneficiaries of DACA were also allowed to apply for employment authorization according to the Code of Federal Regulations.  There is a debate amongst legal scholars over whether the administration’s grant of deferred action was legal.  Those who argue that DACA was illegal contend that the President overstepped his constitutional authority to defer the deportation of some unauthorized immigrants.  Those who argue that DACA was legal point to the general power of the Secretary of the Department of Homeland Security to defer enforcement action.  They argue that the Supreme Court has ruled that decisions to initiate or terminate enforcement proceedings fall within the authority of the Executive – an enforcement power used since the early 1970s.  Here is more of their argument.  This disagreement has not been settled.     

By the end of September, 2013, 580,000 requests for DACA were accepted by the U.S. government and 514,800, or 89 percent, were approved.  Seventy-six percent of the requests came from Mexicans.  Twenty-nine percent of the requests were filed from California, 16 percent from Texas, and 6 percent from Illinois.

Family Reunification and Other Explanations for the Border Surge of Unaccompanied Children

There are two main issues surrounding the increase in the migration of unaccompanied children (UAC) and asylum seekers in recent years that have recently reached crisis proportions.  The first is the treatment of those children who are apprehended by Border Patrol and how American policy is reacting to the surge. 

The second is explaining why UACs are coming.  Below I will lay out three different theories that attempt to explain the surge in UACs.  Each theory has some merit and I present evidence in support and opposition to each one.  

First Explanation: Family Reunification

Immigration by stages and family reunification could explain part of the UAC border surge.  Stage migration works like this:  First, the single breadwinner of the family immigrates to find work in the United States.  After getting established, finding employment, and figuring out how to function in his new country, the initial immigrant then sends for the rest of his family.  Sometimes the initial immigrant’s spouse will come alone while leaving the children in the care of extended family.  Often times, after the second parent is working, they will then have the funds to send for the children to join them in the United States. 

This pattern of family separation through stage immigration and eventual reunification is a desperate strategy undertaken by poor people who don’t have any other options.  Regardless, it explains part of the surge in unaccompanied children who are joining their unlawful immigrant parents and families who previously arrived in the United States.

Smuggling prices for unauthorized immigrants from Central America are higher than for unauthorized Mexican immigrants.  Mexicans pay about $4000 to be smuggled to the United States by land and $9000 to be smuggled in by sea.  Guatemalans pay about $7000.  But since Guatemalans are so much poorer than Mexicans, on average, it can take many more years for them to save for the trip, often meaning that both parents are more likely to come to the United States first to work and send money back to Guatemala to finance the sending of their children.  As a result, many of the children would come alone. 

The price of human smuggling has risen substantially due to increased U.S. border enforcement.  The higher price of migrating and the relative poverty of Central American migrants mean that families are more likely to be separated during the migration process, explaining part of the surge in UACs from Central America.  Ironically, increased border enforcement and crackdowns on human smugglers have probably caused more family separation and eventual reunification – partly explaining the scale of the current UAC migration.

Is Trade Policy Obsolete?

That is one of the conclusions in my new paper, “Made on Earth: How Global Economic Integration Renders Trade Policy Obsolete.”

For hundreds of years, trade policy has been premised on the assumptions that exports are good, imports are bad, and the interests of domestic producers are tantamount to the “national interest.” Though that mercantilist worldview has never been accurate, its persistence as a pillar of trade policy into the 21st century is especially confounding given the emergence and proliferation of disaggregated production processes, transnational supply chains, and cross-border investment. Those trends have blurred any meaningful distinctions between “our” producers and “their” producers and speak to a long chain of interdependent economic interests between product conception and consumption.

Still, trade policy places the interests of domestic producers above all else even though the definition of a domestic producer is elusive and even though actions on behalf of producers often harm interests along the product continuum, which include engineers, designers, financiers, processors, assemblers, marketers, shippers, retailers, consumers, and others.

In 2008, foreign nameplate automobile producers, employing American workers, paying American taxes, and supporting American businesses, communities, and charities, accounted for almost half of all U.S. light vehicle production. The largest “U.S.” steel producer, Arcelor-Mittal, is a majority-Indian-owned company with headquarters in Luxembourg and Hong Kong. The largest “German” producer, Thyssen-Krupp, is completing a $3.7 billion green-field investment in steel production facilities in Alabama, which will create an estimated 2,700 jobs in that state.

So, who are “we”? And who are “they”?

Are these foreign-named or –headquartered companies not “our” producers because some of the profits they earn are repatriated or invested in operations outside the United States? If so, then shouldn’t we consider U.S. Steel Corporation, which earned 25 percent of its revenue last year on steel produced in Slovakia and Serbia, and General Motors, which has had success producing and selling cars in China, to be “their” producers? Why should U.S. Steel, General Motors, and the unions that organize workers at those companies dictate the parameters of U.S. trade policy, while Toyota, Thyssen and their non-union workers have no input? Why should trade policy reflect a bias in favor of producers—or worse, particular producers—at all? That bias hurts other interests—both foreign-based and domestic—in the supply chain.

Global commerce isn’t a competition between “us” and “them.” It is instead a competition between entities that defy national identification because of cross-border investment or because the final good or service comprises value added from many different countries. This reality demands openness in both directions, which flies in the face of conventional trade policy wisdom, which seeks to maximize access for domestic producers abroad while minimizing access for foreign producers at home.

It is only for simplicity’s sake that a container full of iPods shipped from China and unloaded in Seattle registers as imports from China. But the fact is that only a few dollars of the $150 cost to produce an iPod is Chinese value-added. The rest is mostly value attributable to Japanese, Korean, Singaporean, Taiwanese, and American components and labor. Then iPods retail for about $300 and most of the mark-up accrues to Apple, which uses the profits to support innovation and higher paying jobs in the United States.

From a trade policy perspective, each iPod imported from China adds $150 to our bilateral deficit in “high tech” goods. It is regarded as a problem to solve. The temptation is to restrict.

But from a commercial perspective, each imported iPod supports U.S. economic activity up the value chain. Without access to lower-cost labor abroad—if rudimentary component manufacturing and assembly operations were required to take place in the United States—ideas hatched in American labs would be far less likely to make it beyond the white board. Much higher costs would make it far more difficult to create these ubiquitous devices that have, in turn, spawned new ideas and industries.

Essentially, the factory floor has broken through its walls and today spans borders and oceans, making Chinese and American labor complementary in this and many other industries. Yet, despite all of this integration, despite the reliance of producers in the United States and abroad on imported raw materials, components, and capital equipment, trade policy still pretends that access to the domestic market is a favor to grant or a privilege to revoke. Trade policy is officially ignorant of commercial reality.

Openness to trade in both directions is an imperative in the 21st century. Policies that do not try to channel incentives for the benefit of specific groups but rather provide the greatest opportunities for citizens to participate most effectively in our increasingly integrated global economy are the ones that will maximize economic growth and national welfare. People in other countries should be thought of more as customers, suppliers, and potential collaborators instead of competitive threats.

In the 21st century, instead of serving the exclusive interests of domestic producers, trade policy should be about welcoming investment and attracting and cultivating the human capital necessary to make the United States the location of choice for the world’s highest value economic activities.