On the latest Facing the Future, I was joined by President of the American Action Forum and former Congressional Budget Office Director, Dr. Doug Holtz-Eakin, Concord Coalition Executive Director, Bob Bixby, and Concord’s Policy Director, Tori Gorman. We discussed how legal immigration reform fits into the long-term economic growth conversation, as well as how the pandemic has impacted the economy and the nation's fiscal health.
[Note: Portions of this week's Facing the Future can be seen in the video clip posted below.]
In 2019, The Concord Coalition commissioned a series of papers on five topics with the idea of putting forth a fiscally-responsible economic growth agenda at a time when projected long-term economic growth was waning and the nation’s fiscal picture was worsening every year.
Little has changed with that long-term trajectory, but much has changed in the near term, as the country battles COVID-19 and the economy struggles to rebound from the effects of the pandemic. With millions suffering now and the long-term picture no better, Concord is revisiting its agenda to determine how it should be adapted to our new reality.
The month of October will feature discussions on each of the five key topics, continuing with immigration this week. You can read the 2019 policy paper on pro-growth, legal immigration reform by clicking here.
Bixby provided background as to why immigration was included as a topic of focus in a fiscally-responsible economic growth agenda.
“The growth in the labor force, which is a key component of economic growth, has slowed dramatically over the last several years,” Bixby said. “An immigration paper was important to us because one of the ways you can deal with the slowdown in the workforce is by increasing legal immigration.”
Holtz-Eakin added, “If you look at the fertility rates of our native-born population they’re exceedingly low, indeed, they’re so low that in the absence of immigration, the U.S. would have a population decline … and that would lead to a smaller economy.”
“U.S. immigration policy has historically been built on the principles of family unification, asylee and refugee status, these are all noble principles, there’s nothing wrong with that,” Holtz-Eakin said. “What we propose is to add onto, or make more important, economic criteria.”
Holtz-Eakin further explained the point-based system proposed in the paper that helps meet workforce and economic needs, building upon the foundations of the current legal immigration system.
He also addressed the oft-touted concerns when the idea of increased immigration is discussed, that immigrants will fill jobs that native-born Americans would otherwise occupy and that such an influx would also help to suppress wages.
“That really relies on a couple misconceptions,” Holtz-Eakin said.
The first is the "fixed-pie misconception," implying that there are only ever a certain number of jobs available throughout the economy. Holtz-Eakin said that is not the way the economy works: “We have grown as a country by allowing for increased population and employing those people by-and-large successfully for over 200 years.”
The second misconception is the notion that somehow, when we bring someone into the United States, we are suddenly putting that person in competition with our existing workforce. Holtz-Eakin said, “Sorry, we’re already in competition with the entire labor force all around the world, it’s a global economy, labor skills compete regardless of their location.”
There has also been significant research on the potential negative consequences of increased immigration, he said. In some cases, you can find such evidence, but you have to look pretty hard to find it.
“By and large, it’s just not there,” Holtz-Eakin added. “Immigration helps the U.S., and it doesn’t do the damage that people think.”
The ongoing pandemic and economic fallout does not dramatically change Holtz-Eakin’s perspective on his proposal.
“The idea of legal immigration reform, that’s something that you should think about not as being right for 2020 and 2021, it should be right for 2025, 2030, 2035,” he said. “Current conditions play a lot less into how I think about this than what we need in the long-term.”
In the latter-half of the program, the conversation shifted to the pandemic’s impact on the economy now and into the future.
“The pandemic downturn is an extraordinary event,” Holtz-Eakin said. “We saw the economy contract by about nine percent in the second quarter of 2020; in the worst year of The Great Depression, 1932, it contracted by 12 percent.”
But he added that this downturn has been unlike others, not driven by loss of income or financial panic, it has been driven by a sharp drop in household, consumer spending because people were afraid to go out. The bounceback has been relatively rapid, but that pace is unlikely to continue.
“The interesting thing about the pandemic so far is that it has not really changed the long-term growth rates that people anticipate,” Holtz-Eakin said. “And it hasn’t really changed the budgetary outlook … to a remarkable degree, what Congress did was spend an enormous amount of money very quickly, and then it goes away.”
We go back to baseline revenue and spending projections but those projections simply jump off from a much higher level of debt, he added.
“The fiscal outlook is unsustainably bad … the ratio of debt-to-GDP is rising, and we need to be able to change that trajectory,” Holtz-Eakin said. “That task remains … and it will be harder because we will have properly incurred a lot more debt fighting the pandemic recession.”
Hear more on Facing the Future. I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Play Music or with an RSS feed. Follow Facing the Future on Facebook and watch videos from past episodes on The Concord Coalition YouTube channel.