Policy Analysis No. 732

Building a Wall around the Welfare State, Instead of the Country

Economists generally believe that immigration increases the size of the economy, improves productivity, and is an economic boon for almost all parties. Moreover, historically, immigration has been a net positive for the federal budget, improving the long-run fiscal condition of the United States. Changes to federal laws, many of which are proposed in the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, could further improve the fiscal impact of future immigration.

Critics of immigration reform worry about immigrants disproportionately consuming public benefits. Instead, they should support legal changes to immigrant welfare eligibility. Eliminating immigrant welfare eligibility for Temporary Aid to Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP or food stamps), Supplemental Security Income (SSI), Medicaid, and other programs would, in the words of the Cato Institute’s late Chairman Emeritus William Niskanen, “build a wall around the welfare state, not around the country.” Doing so would reduce immigrant welfare dependency and could increase the pace of intergenerational mobility among immigrants. Such measures would also be constitutional. This policy analysis shows how to implement those reforms.

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Alex Nowrasteh is the immigration policy analyst at the Cato Institute’s Center for Global Liberty and Prosperity. Sophie Cole is a former legal associate at the Cato Institute.

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