    [Senate Hearing 113-44]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 113-44

                  COMPREHENSIVE IMMIGRATION REFORM LEGISLATION
    =======================================================================

                                    HEARING

                                   before the

                           COMMITTEE ON THE JUDICIARY

                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 19, 2013

                                   __________

                              Serial No. J-113-14

                                   __________

             Printed for the use of the Committee on the Judiciary

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                           COMMITTEE ON THE JUDICIARY

                      PATRICK J. LEAHY, Vermont, Chairman
    DIANNE FEINSTEIN, California         CHUCK GRASSLEY, Iowa, Ranking
    CHUCK SCHUMER, New York                  Member
    DICK DURBIN, Illinois                ORRIN G. HATCH, Utah
    SHELDON WHITEHOUSE, Rhode Island     JEFF SESSIONS, Alabama
    AMY KLOBUCHAR, Minnesota             LINDSEY GRAHAM, South Carolina
    AL FRANKEN, Minnesota                JOHN CORNYN, Texas
    CHRISTOPHER A. COONS, Delaware       MICHAEL S. LEE, Utah
    RICHARD BLUMENTHAL, Connecticut      TED CRUZ, Texas
    MAZIE HIRONO, Hawaii                 JEFF FLAKE, Arizona
                Bruce A. Cohen, Chief Counsel and Staff Director
                  Kolan Davis, Republican Chief Staff Director

                                C O N T E N T S

                                  ----------

                        STATEMENTS OF COMMITTEE MEMBERS

                                                                       Page

    Grassley, Hon. Chuck, a U.S. Senator from the State of Iowa......     3
    Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
        prepared statement...........................................   104

                                   WITNESSES

    Holtz-Eakin, Douglas, President, American Action Forum,
      Washington, DC.................................................     7
    Kirsanow, Peter, Partner, Benesch, Friedlander, Coplan & Arnott,
      and Commissioner, U.S. Commission on Civil Rights, Cleveland,
      Ohio...........................................................     5

                             QUESTIONS AND ANSWERS

    Responses of Douglas Holtz-Eakin to questions submitted by
      Senators Sessions and Lee......................................    32
    Responses of Peter Kirsanow to questions submitted by Senator Lee    42

                           SUBMISSIONS FOR THE RECORD

    Acer, Eleanor, Director, Refugee Protection Program, Washington,
      DC, statement..................................................    47
    American-Arab Anti-Discrimination Committee (ADC), Abed A. Ayoub,
      Washington, DC, statement......................................    50
    American Friends Service Committee, Philadelphia, Pennsylvania,
      statements.....................................................    54
    American Immigration Council, Washington, DC, statement..........    57
    Arab American Institute, Maya Berry, Executive Director,
      Washington, DC, statement......................................    58
    APIAHF Asian & Pacific Islander American Health Forum,
      Washington, DC, statement......................................    60
    Bennet, Michael F., a U.S. Senator from the State of Colorado,
      prepared statement.............................................    68
    Business Coalition for the Uniting American Families Act,
      Washington, DC, March 1, 2013, letter..........................    71
    Centro De Los Derechos Del Migrante, Inc. (CDM), Baltimore,
      Maryland, statement............................................    72
    Cicerani, Nikki, Imprint, www.imprintproject.org, statement......    76
    Connecticut General Assembly's Latino and Puerto Rican Affairs
      Commission, Werner Oyanadel, Acting Executive Director, and
      Isasias T. Diaz, Chairman, Hartford, Connecticut, March 18,
      2013, letter...................................................    79
    Foltin, Richard T., Director of National and Legislative Affairs,
      Government and International Affairs, American Jewish
      Committee, Washington, DC, statement...........................    80
    Franciscan Action Network, Washington, DC, statement.............    83
    HIAS, New York, New York, statement..............................    84
    Holtz-Eakin, Douglas, President, American Action Forum,
      Washington, DC, statement......................................    85
    Interfaith Worker Justice, Chicago, Illinois, statement..........    97
    Kirsanow, Peter, Partner, Benesch, Friedlander, Coplan & Arnott,
      and Commissioner, U.S. Commission on Civil Rights, Cleveland,
      Ohio, statement................................................    98
    Leyva, Blas Burboa, Translated statement.........................   106
    Leyva, Blas Burboa, statement....................................   108
    Lutheran Immigration and Refugee Service, Baltimore, Maryland,
      statement......................................................   110
    Muslim Public Affairs Council, Washington, DC, statement.........   112
    Napolitano, Janet, Secretary, U.S. Department of Homeland
      Security, Washington, DC, statement............................   113
    National Council of Jewish Women, Nancy K. Kaufman, Chief
      Exective Officer, Washington, DC, statement....................   121
    National Domestic Workers Alliance, New York, New York, statement   122
    National Immigration Forum, Washington, DC, statement............   126
    National Immigration Law Center, Washington, DC, statement.......   130
    National Coalition for Immigrant Women's Rights and We Belong
      Together, Washington, DC, statement............................   132
    Network a National Catholic Social Justice Lobby, Washington, DC,
      statement......................................................   142
    National Employment Law Project (NELP), Christine Owens,
      Executive Director, New York, New York, statement..............   143
    Office of Immigration Issues, Presbyterian Church (U.S.A.),
      Gradye Parsons, Stated Clerk of the General Assembly,
      Louisville, Kentucky, statement................................   145
    Praeli, Lorella, Director of Advocacy and Policy, United We
      Dream, Los Angeles, California, statement......................   147
    Religious Action Center of Reform Judaism, Washington, DC,
      statement......................................................   151
    Schori, Reverend Katharine Jefferts, Presiding Bishop and Primate
      of the Episcopal Church, New York, New York, statement.........   152
    Sisters of Mercy, Silver Spring, Maryland, statement.............   154
    U.S. Jesuit Conference, Washington, DC, statement................   155
    Vargas, Arturo, Executive Director, National Association of
      Latino Elected and Appointed Officials (NALEO), Washington, DC,
      statement......................................................   156

                  COMPREHENSIVE IMMIGRATION REFORM LEGISLATION

                                  ----------

                             FRIDAY, APRIL 19, 2013

                                           U.S. Senate,
                                    Committee on the Judiciary,
                                                         Washington, DC
        The Committee met, pursuant to notice, at 10:10 a.m., in
    room SH-216, Hart Senate Office Building, Hon. Patrick J.
    Leahy, Chairman of the Committee, presiding.
        Present: Senators Leahy, Feinstein, Schumer, Durbin,
    Whitehouse, Klobuchar, Franken, Coons, Hirono, Grassley, Hatch,
    Sessions, Graham, Lee, and Flake.

    OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM
                          THE STATE OF VERMONT

        Chairman Leahy. If the Committee could come to order,
    please. I apologize for the delay.
        As you know, there is a great deal going on in
    Massachusetts. I hope everybody can well understand why
    Secretary Napolitano will not be here, and we will reschedule
    her testimony.
        Also, I was just talking--and I hope Senator Feinstein will
    not mind me mentioning this, but she was saying, and I totally
    agree, how proud we are of the way law enforcement has
    responded. I am distressed to hear of an officer being killed
    and another critically wounded, just as we are about all the
    people who were injured or killed from the Marathon. I see at
    least one person who runs marathons in the audience, and
    others, as my daughter and youngest son do. So what should have
    been a joyous, joyous occasion, as most marathons are for
    spectators and participants, was otherwise.
        But I do want to thank Mr. Holtz-Eakin and Mr. Kirsanow for
    being here, and we will go forward.
        The bipartisan proposal we have establishes a path to
    citizenship for the 11 million undocumented immigrants in this
    country. It addresses the lengthy backlogs in our current
    immigration system--backlogs that have kept families apart
    really for decades. It grants a faster track to the
    ``dreamers'' brought to this country as children through no
    fault of their own and to agricultural workers who are an
    essential part of our communities and work so hard to provide
    our Nation's food supply. It makes important changes to the
    visas used by dairy farmers and the tourism industry and by
    immigrant investors who are making investments in our
    communities. It addresses the needs of our law enforcement
    community, which requires the help of immigrants who witness
    crime or are victims of domestic violence, some of whom are now
    afraid to come forward because of their status. It improves the
    treatment of refugees and asylum seekers so that the United
    States will remain the beacon to the world, as it was to my
    maternal grandparents and my paternal great-grandparents.
        And I appreciate the fact that we have four members of this
    Committee who have worked with others in forming a bipartisan
    consensus, and I thank Senator Schumer and Senator Durbin and
    Senator Graham and Senator Flake for that--and, of course,
    Senator Feinstein, who has taught me more about immigration
    than I ever would have learned otherwise.
        The bill includes what some are calling ``triggers'' that I
    am concerned could long delay green cards for those who we want
    to make full and contributing participants in our society. I do
    not want people to move out of the shadows but then be stuck in
    some underclass. Just as we should not fault ``dreamers'' who
    were brought here as children, we should not make people's
    fates and future status depend on border enforcement conditions
    over which they have no control. And I am disappointed that we
    are not treating all families equally. I believe that we have
    to end the discrimination that gay and lesbian families face in
    our immigration system. I am also concerned about changes to
    the visa system for siblings and the lack of clarity about how
    the new point-based visa system will work in practice. These
    are all things we can discuss in the markup. And I cannot help
    but question whether spending billions more on a fence between
    the United States and Mexico is really the best use of our
    taxpayer dollars.
        But I do know that each one of us could write what we want
    and each one of us may have a different bill. We have a bill
    that is a product of compromise, very difficult concessions by
    all involved. I mentioned Senators Schumer, Durbin, Graham, and
    Flake, but also Senator Feinstein and Senator McCain, Senator
    Menendez, Senator Rubio, Senator Bennet, who all worked on
    this.
        So now we are bringing it to the public. This immigration
    hearing is the fourth we have had this year, and we will hold
    hearings on Monday. We will find the time for Secretary
    Napolitano to come before the Committee. I have already
    discussed that with Senator Grassley. And so I hope these will
    give the public an opportunity to learn about it.
        Certainly every one of us, unless we want to say we do not
    know how to read, every one of us will have plenty of time to
    analyze this bill before we actually start marking it up in
    May.
        But just remember, immigration has been an ongoing source
    of renewal of our spirit, our creativity, but also our economic
    strength. From the young students brought to this country by
    their loving parents seeking a better life, to the hard-working
    men and women who play vital roles supporting our farmers,
    innovating for our technology companies, or creating businesses
    of their own, our Nation continues to benefit from immigrants,
    as it did when my wife's parents came here. We need to uphold
    the fundamental values of family, hard work, and fairness.
        In Vermont, immigration has promoted cultural richness
    through refugee resettlement and student exchange, economic
    development through the EB-5 Regional Center program, and
    tourism and trade with our friends in that wonderful country of
    Canada. Foreign agricultural workers support Vermont's farmers
    and growers, many of whom have become a part of farm families
    that are woven into the fabric of Vermont's agricultural
    community, as they have in the agricultural community of so
    many other States.
        Now, the dysfunction in the system affects all of us. Now
    is the time to fix it. This is our opportunity to do it. We can
    act deliberately, but we have to act. We can talk about it, but
    eventually we have to vote. Millions of people--millions of
    Americans--are depending upon us.
        Senator Grassley.

    STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR FROM THE STATE
                                OF IOWA

        Senator Grassley. On this side, Mr. Chairman, we understand
    why the Secretary cannot be here, and we feel that she is doing
    exactly what she should be doing. And we will have an
    opportunity, when things settle down, to question her.
        And we also appreciate the opportunity to talk about
    immigration, particularly in light of all that is happening in
    Massachusetts right now and over the last week. I know that the
    people of Boston and Watertown are in everybody's thoughts this
    morning. We are here trying to understand why these events have
    occurred. It is hard to understand that there are people in
    this world that want to do Americans harm, so this hearing is
    an opportunity to refocus on the issues at hand and the
    importance of remaining vigilant and secure in our homeland.
        We appreciate that exactly 30 years ago today, April 19,
    1983, this Committee held a hearing to discuss the Immigration
    Reform and Control Act. Senator Simpson, the author of that
    bill, opened the meeting by presenting the bill and stating its
    purpose: ``Its purpose, a very simple one: to control illegal
    immigration in the United States and to control legal
    immigration without limiting immediate family reunification.''
        But he further stated: ``The first duty of a sovereign
    nation is to control its borders. We do not do that.'' And I
    suppose that is still the situation today.
        The bill we debated that day would provide legalization of
    millions of people already in the United States. On that day,
    Senator Simpson stated further: ``We are attempting to assure
    that this is a one-time-only program.'' The bill we are
    considering today, according to the bipartisan group of eight
    Senators who crafted it, will ``ensure that this is a
    successful permanent reform to our immigration system that will
    not be revisited.''
        Now, 30 years have passed, and we are saying the same
    thing, facing the same problems. We are proposing the same
    remedies and asking the American people to trust that we will
    get serious about enforcing our immigration laws.
        So let me be clear. I have to applaud, like other people
    have, the group of eight Senators for their commitment to
    reforming our broken immigration system. Time will tell if this
    bill solves that problem the way that their statement did to
    ensure that this is a successful permanent reform to our
    immigration system so that we will not have to revisit it. So I
    quoted that twice now.
        Throughout the debate of S. 744, the Border Security,
    Economic Opportunity, and Immigration Modernization Act, I will
    be asking whether this bill avoids the same mistakes and truly
    fixes our immigration system for the generation to come,
    because we thought when that bill passed in 1986 that is what
    we did. We did everything in good faith, shutting off the
    magnet to bring people to this country by making it illegal to
    hire illegal undocumented people for the first time. But we did
    not look far enough ahead, and we did not do it right, as we
    all know now.
        I have made it clear that this bill needs to go through the
    Committee process, and it will. I have argued that this bill
    must be open to amendments during consideration in Committee
    and on the floor, and we have been told that it will be. Every
    Member of the Senate must have an opportunity to read, analyze,
    and improve the bill, and the schedule will permit that.
        Unfortunately, I think that we are kind of off to a rough
    start from the standpoint that the majority is rushing to read
    and analyze the bill. It is just under 900 pages and tackles
    some very important issues. There are some new concepts. Most
    members and staff on the Committee have not read the bill in
    its entirety before this hearing. Certainly we should be
    afforded enough time to understand and debate the bill, and we
    have been assured that we will.
        In 1983, before the Judiciary Committee met on that day,
    the Subcommittee on Immigration held four hearings before it
    reported the bill to the full Committee. This year before--the
    year before that, the Committee held 16 hearings and five
    consultations. Prior to the May 1982 markup of the same bill,
    the Committee had 100 hours of hearings and 300 witnesses.
        We have experts that need to be heard on this bill. We need
    to hear from people who live and work along the border. We need
    to understand how changes in our visa program will affect
    businesses and American workers. We need to know how new
    concepts will be put into practice. And, most importantly, we
    need to hear from the Congressional Budget Office about the
    impact the bill will have on the taxpayers.
        This is not something to be rushed. We have to get it
    right, like we thought we got it right in 1986; otherwise, the
    goals of the bipartisan group to solve the problem once and for
    all will not be met.
        And given the events of this week, it is important for us
    to understand the gaps and loopholes in our immigration system.
    While we do not yet know the immigration status of people who
    have terrorized the communities in Massachusetts, when we find
    out, it will help shed light on the weaknesses of our system.
    How can individuals evade authorities and plan such attacks on
    our soil? How can we beef up security checks on people who wish
    to enter the United States? How do we ensure that people who
    wish to do us harm are not eligible for benefits under the
    immigration laws, including this new bill before us?
        We have a long road ahead of us to pass legislation to
    reform our immigration system. We cannot tolerate anything less
    than a transparent and deliberative process to improve the
    bill, because we thought we were doing that exactly that way in
    1986, but we screwed up, and we cannot afford to screw up
    again.
        Thank you.
        Chairman Leahy. And with that, which is why we are going to
    make sure we will not even be voting on this until sometime
    next month, and we will have it open, and like all our
    deliberations, it will be streamed on our website. And I
    understand from our IT people that there are an awful lot of
    people watching.
        We will begin with Mr. Kirsanow, who is a partner at the
    Cleveland, Ohio, law firm of Benesch, Friedlander, Coplan &
    Arnoff. Please go ahead. Is your microphone on?

      STATEMENT OF PETER KIRSANOW, PARTNER, BENESCH, FRIEDLANDER,
      COPLAN & ARNOFF, AND COMMISSIONER, U.S. COMMISSION ON CIVIL
                        RIGHTS, CLEVELAND, OHIO

        Mr. Kirsanow. Thank you, Mr. Chairman, Senator Grassley,
    members of the Committee. As you indicated, I am a member of
    the U.S. Commission on Civil Rights and a partner in the labor
    and employment practice group of Benesch, Friedlander. I am
    here in my personal capacity.
        The U.S. Commission on Civil Rights was established
    pursuant to the 1957 Civil Rights Act to, among other things,
    examine matters related to denials of equal protection and race
    discrimination. And because immigration often implicates
    matters pertaining to national origin and discrimination, the
    Commission over the years has regularly conducted hearings on
    aspects of immigration, including illegal immigration. The most
    recent such hearing occurred dealing with the specific issue of
    the effect of illegal immigration on the wage and employment
    levels of low-skilled Americans, specifically black Americans,
    and the evidence adduced at that hearing showed that illegal
    immigration has a disproportionately negative effect on the
    employment and wage levels of low-skilled Americans,
    specifically black American.
        Now, it is important----
        Senator Sessions. Mr. Chairman, we are still having a
    little hard time hearing. If you can get that a little closer.
        Mr. Kirsanow. Yes.
        Senator Sessions. I appreciate it.
        Mr. Kirsanow. It is important to remember or keep in mind
    that the witnesses at the hearing were experts on immigration
    who spanned the ideological spectrum. Despite differences as to
    policy, every single witness agreed that illegal immigration
    had a demonstrably negative effect on employment opportunities
    and wage levels of low-skilled Americans, specifically black
    Americans. And the evidence as to why this impacts black
    Americans is quite basic.
        Black Americans, specifically black males, are
    disproportionately concentrated in the low-skill labor market,
    disproportionately more likely to have only a high school
    diploma; likewise, illegal immigrants, disproportionately
    concentrated in the low-skill labor market, disproportionately
    likely to have low levels of educational achievement; and these
    two groups compete against one another in the low-skill labor
    market. That competition is often most fierce in those areas of
    the economy where blacks have historically been highly
    concentrated. And blacks frequently lose out on that
    competition, crowded out by illegal immigrants who employers
    for various reasons prefer, as shown by Professor Vernon Briggs
    of the Cornell School of Industrial Labor Relations, not
    because black Americans or low-skilled Americans are unwilling
    to work; it is that they are unwilling to work at sometimes the
    cut-rate wages and substandard benefits tendered to illegal
    immigrants--a cohort unlikely, highly unlikely to complain to
    the Wage and Hour Division of the Department of Labor, the
    EEOC, or OSHA.
        Much of the competition is concentrated in major
    metropolitan areas such as New York, Los Angeles, Chicago, but
    also in rural areas now, and in Southeast States such as
    Georgia, North Carolina, and Virginia.
        The impact of illegal immigration on low-skilled workers is
    especially severe in today's stagnant economy. When the
    Commission conducted its investigation originally, the
    unemployment rate for blacks without a high school diploma was
    12 percent. Today it is more than double, to 24.6 percent.
        Now, that clearly shows that we have an oversupply of low-
    skilled labor relative to demand, and that bodes ill for all
    workers in such class, particularly black Americans, because
    research shows that 40 percent of the 18-point percentage
    decline in the employment rates of black males is attributable
    to illegal immigration. That is hundreds of thousands of blacks
    without jobs. It translates to hundreds of thousands who cannot
    pay taxes, who do not support their families on their own dime.
        The evidence also indicated that, in addition to depressing
    employment levels, illegal immigration drove down wage levels.
    Studies by the Federal Reserve Bank of Atlanta, for example,
    showed that illegal immigration and the spike in illegal
    immigration was attributable to the nearly $960 per year
    decrease in the wage levels of documented Georgians. In the
    leisure and hospitality industries, it was $1,520.
        Now, for doctors and lawyers, $960 may not be a whole lot,
    but as President Obama observed in the extension of the payroll
    tax cut, $80 per month is significant for most families. It
    goes toward groceries, rent, gasoline.
        Recent history shows that grant of lawful status further
    increases the influx of illegal immigrants, further forcing out
    low-skilled laborers and thereby depressing the wage and
    employment levels of those Americans.
        In addition to that, that necessarily inexorably leads to
    more Americans depending upon the Government for subsistence.
    It swells the ranks of black unemployed and drives down the
    wages of those blacks who do have jobs.
        It is respectfully submitted, Mr. Chairman, that, before
    the Federal Government grants lawful status, due deliberation
    be given to the effect of that grant on the wage and employment
    levels of low-skilled Americans, because the evidence before
    the Commission is that grant of such status is not without
    profound and substantial costs to the American worker.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Kirsanow appears as a
    submission for the record.]
        Chairman Leahy. Thank you.
        As with all witnesses, your full statement will be made
    part of the record.
        Mr. Holtz-Eakin is the president of the American Action
    Forum. He was formerly the Director of the Congressional Budget
    Office under George W. Bush from 2003 to 2005. I believe that
    is when we first met, back at that time.
        Mr. Holtz-Eakin. That is correct, Chairman.
        Chairman Leahy. It is good to have you here. Please go
    ahead, sir.

     STATEMENT OF DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION
                         FORUM, WASHINGTON, DC

        Mr. Holtz-Eakin. Thank you, Chairman Leahy, Ranking Member
    Grassley, and members of the Committee. It is a privilege to be
    here today. I have submitted a written statement for the
    record. Let me briefly make three points, and then I look
    forward to answering your questions.
        The first point is simply that the immigration reform bill
    before you has many aspects. There are important security
    considerations. There are sectoral economic impacts. There are
    legal issues which have to be resolved. But at its core,
    immigration reform represents an economic policy opportunity.
    It is an opportunity for the United States to dictate the
    evolution of its future population, and as I emphasize in my
    testimony, in the absence of immigration, low fertility rates
    mean that the U.S. population declines, and that the future
    growth of the U.S. is dictated by immigration choices.
        It will dictate the labor force participation and the
    effort exerted in our economy. It will have strong influences
    on entrepreneurship and small business creation. The evidence
    is that new immigrants to the United States both work more,
    their labor force participation rates are higher, and have
    small businesses at a higher rate. As a result, it will
    increase the productivity growth in the U.S. economy, the
    fundamental building block of higher standards of living, and
    generate larger economic growth numbers than we have seen in
    recent years.
        I have done some estimates that for benchmark reforms
    suggest you could have as much as nearly a full percentage
    point faster growth over 10 years, and associated with that
    would be something that I think every member of this Committee
    would be quite pleased to see, and that is, less budgetary
    pressure, faster growth reduces, using CBO rules of thumb,
    deficits by about $2.5 trillion over 10 years. And that is
    clearly a benefit that we ought to think about when we think
    about immigration reform and not rely on those efforts which
    ignore economic growth.
        I think that the U.S. is out of step with its economic
    competitors in that it does not use immigration policy as a
    tool of economic policy. Under 10 percent of immigration into
    the U.S. is for economic purposes. This bill makes important
    changes to the visa system, basing them more on economic
    considerations, and represents a step toward using a policy mix
    that is closer to other industrialized countries.
        A legitimate concern in all of this is what will happen to
    the Federal budget. It is a concern that I have been close to
    for a long, long time. And I think a good way to think about
    the budgetary implications is to start with the last piece of
    comprehensive immigration reform legislation that Congress
    looked at in 2007. The CBO did have the opportunity at that
    time to put out a score. That score indicated that if you
    looked at the balance between spending and revenues, it would
    over 10 years increase deficits by about $18 billion. And $18
    billion does not sound like a lot now in the context of
    trillion dollar deficits year after year. But I think that
    there are two things to remember about that $18 billion.
        Since that time, many of the things that were policy
    objectives--border security, an E-Verify system, and other
    pieces of the immigration infrastructure--there has been
    spending on that. About half of what the CBO expected would be
    needed has happened, so those comparable policy objectives now
    may be cheaper and generate less in the way of spending.
        The second thing that has happened has been that CBO did
    not use dynamic scoring. It did not take into account the
    potential economic growth effects, and that would change the
    impacts entirely.
        The last piece of what has happened, and something I am
    sure we will have a chance to talk about, is since that score,
    the Congress has passed and the President signed the Affordable
    Care Act, a large new entitlement program in the United States.
    And my reading of this legislation is there is a bipartisan
    commitment that those who would become registered provisional
    immigrants, those who are here legally and enter the RPI
    program, would not be eligible for benefits, certainly not for
    10 years, probably realistically not for 15, and so there will
    not be a budgetary impact over that horizon.
        Over the longer term, I think there is something that the
    Congress should keep an eye on in terms of the budgetary
    outlook, and I would be happy to discuss with you the impact of
    this bill in that regard. But as I said before, I think the
    primary objective should be to make sure that, when the many
    policy objectives are put on the table, economics does not get
    lost in the shuffle. This is a central tool of economic policy.
    This is an opportunity for us to improve on our growth record,
    which has not been good, and I look forward to the chance to
    answer the questions you might have about that.
        Thank you.
        [The prepared statement of Mr. Holtz-Eakin appears as a
    submission for the record.]
        Chairman Leahy. Well, thank you very much. You know, on the
    economics, when we hear about low-wage people may be hurt by
    this, my experience is that you have places where there is a
    large number of immigrants or undocumented that companies will
    show up and say, ``Here, we are going to pay you a flat rate
    for work for the day. You cannot complain about it. You are not
    going to get any benefits. We are also not going to do any
    withholding to the Government.'' Doesn't that pretty well
    undercut hiring somebody, even somebody at minimum wage, by
    doing it illegally?
        Mr. Holtz-Eakin. I think the impact of immigration on low-
    skill employment and wages is a really important issue, and I
    am glad it was raised in the opening statements. Let me
    separate it into two pieces.
        The first is illegal immigrants in the United States. There
    I think if you look at the bill, there are two features that
    are important to think about.
        One, it would put those workers on a level legal playing
    field with U.S. workers, same workplace protections, same wage
    laws, thus changing that dynamic considerably.
        Second is this is intended to cutoff future illegal
    immigration. Border security, E-Verify, entry-exit visa
    triggers are all designed to do that. So, you know, that
    changes whatever you may think the prevailing wisdom is on
    that.
        The other thing is for immigration in general. Mr.
    Chairman, I want to just make sure that people understand. The
    evidence is not as it was characterized. I mean, there is good
    reason to believe that immigration raises the wages of American
    workers, that they are complements to American workers, and I
    would emphasize two things:
        Number one, if we are worried about the ability of low-
    skill Americans to earn a wage, we should fix the low-skill
    problem. That is the problem. It is not immigration. It is low
    skills. And if you think the competition begins when someone
    arrives in the United States, you are mistaken. We are
    competing with those workers now wherever they may be.
        Chairman Leahy. You know, it is interesting. In your
    testimony you mention that ``immigration policy is economic
    policy.''
        Mr. Holtz-Eakin. Yes.
        Chairman Leahy. You talked about the entrepreneurial vigor.
    I cannot help but think, because I visited these companies, I
    know the founders, most of them, and 25 percent of our highest-
    growth companies between 1990 and 2005, including Intel,
    Google, Yahoo, eBay, employ hundreds of thousands of people
    here in the United States, usually at pretty good wages, they
    were begun by immigrants. In fact, 40 percent of the companies
    in the 2010 Fortune 500 were started by immigrants or their
    children. Isn't that something we should be thinking about?
        Mr. Holtz-Eakin. I would hope so. The evidence is quite
    clear on the capacity of immigration to bring entrepreneurship
    and businesses to the U.S.
        Chairman Leahy. In the time I have got remaining here,
    would you--you released this analysis that concluded that
    immigration reform, like the proposal here, could boost the
    American economy by as much as 1 percentage point every year
    over the coming decade and reduce the deficit by as much as
    $2.5 trillion. Obviously, every one of us who wrestle with
    budgets and deficits kind of perks up--grabs our attention. Do
    you want to elaborate on that a little bit?
        Mr. Holtz-Eakin. I guess I would say a couple things.
        First, arriving at that estimate is a matter of arithmetic,
    not particular ingenuity. Economic growth comes from growth in
    people and their productivity, and immigration controls both
    the size of the labor force and, since immigrants tend to work
    more and participate at higher rates than the native-born, you
    get labor force growth. As you have mentioned, we often get
    small businesses and entrepreneurs, which raises the
    productivity of those workers, and there are benefits to faster
    overall economic growth in spreading innovation through the
    income and thus raising productivity further.
        My estimates simply look at increases in immigration and
    follow the research literature and rules of thumb for the
    impacts on GDP and on the budget. It is not magic. It is just
    arithmetic.
        I will say that it is important to recognize I did not
    tailor that estimate to 2013, 2014, 2015. This bill looks like
    it will take some time to pass and implement, and that is fair.
    So you want to think of that as once you get up and running,
    what will the next 10 years look like?
        Chairman Leahy. In fact, in your testimony you referenced
    immigration legislation considered back in 2007. Many of us
    were here at that time. Some were concerned by the cost. But
    you say, ``It is not 2007 anymore. It is important to consider
    what has happened since then to get a sense of how the relevant
    budgetary effects . . . may have changed.''
        Can you elaborate on that, sir?
        Mr. Holtz-Eakin. As I said, I think the key spending
    aspects have changed in two ways. On the discretionary side,
    many of the policy objectives of that legislation--border
    security, e-verification--there has been expenditure on those
    systems, and so not all of the spending needs to be done, so it
    should be relatively cheaper. And on the mandatory spending
    side, as I mentioned, the key change has been the passage of
    the Affordable Care Act. The drafters of the legislation in
    front of us have, it looks to me, taken great bipartisan care
    to ensure that for the next 10 to 15 years that does not
    impinge on the budgetary costs of this legislation.
        Chairman Leahy. Thank you very much.
        Senator Grassley.
        Senator Grassley. Yes, thanks to both of you as witnesses.
        The first question to both of you: Since we have a very
    generous immigration system, even though it has problems, I
    have always argued that we must enhance and expand legal
    avenues for people who wish to live and work here. This bill
    makes many changes in those legal programs and increases work
    permits and green cards. So my question to both of you is: Do
    either of you have an estimate on how the legal immigration
    levels will increase if we pass this bill?
        Mr. Kirsanow. Well, I do not have an estimate myself, but I
    will say this: Responding to something Doug said--and I respect
    his opinion on these issues--there is a significant problem
    with respect to regularization. Whether or not the Senate wants
    to do so or not, it is not going to help the employment levels
    of Americans currently. I think E-Verify is a good idea,
    outstanding. Making sure that all workers are subject to the
    same legal requirements, outstanding idea.
        The problem then is when you regularize 11 million people,
    the tiny advantage that current Americans have in such
    competition evaporates. If everyone is subject to the same set
    of rules, then formerly illegal immigrants will be on the same
    playing field. It is not going to advantage low-skilled workers
    who are currently here.
        We have a labor participation rate in this country that is
    at historic lows, only 62 percent. In the black community, in
    certain demographics, one out of two men is working. And
    despite what some may say that illegal immigration or
    immigration period does not have any impact, I will resort back
    to one of my other incarnations as a member of the National
    Labor Relations Board and three decades of practicing labor
    law. It is palpable, the competition that is driven out by
    illegal immigration. You talk to minority contractors,
    businessmen, and they will tell you, ``We cannot compete.'' And
    if these individuals are now regularized in one fell swoop, the
    small advantage disappears.
        Senator Grassley. Do you have any number for me, Mr. Holtz-
    Eakin?
        Mr. Holtz-Eakin. Not a precise number. We have read the
    bill as carefully as we can under the time constraints, and it
    looks to be somewhere around 250,000, maybe north of that
    depending on some of the expansions. But I would be happy to
    get back to you with a more precise estimate as we become more
    comfortable with it.
        Senator Grassley. I am going to ask you, Mr. Holtz-Eakin, a
    question that deals with dynamic scoring, your use of it. I
    know you believe in it. I believe in it. But CBO only scores
    static scoring.
        Mr. Holtz-Eakin. Yes.
        Senator Grassley. And we also had a vote on the budget bill
    where 48 Democrats in the Senate voted against dynamic scoring.
    So your projection regarding the economic benefits of
    immigration reform are based on that scoring. As former CBO
    Director, do CBO scores include dynamic economic impact for
    policy changes? And would they use dynamic scoring in the case
    of elaborating on this bill?
        Mr. Holtz-Eakin. It is good to have this topic of
    discussion with you again, Senator. I have lots of scars from
    the previous incarnations. No, CBO does not. I have been yelled
    at many times over that. My point is simply that when you get a
    CBO score, which will not include those effects, recognize it
    is incomplete in that regard and know that there are benefits
    being uncounted in the impact of the legislation.
        Senator Grassley. If dynamic scoring should be used to
    measure economic benefits of immigration reform, surely also
    measure dynamic economic benefits of lower rates of taxation as
    well? You would surely agree with that.
        Mr. Holtz-Eakin. I do, sir.
        Senator Grassley. But I am trying to point out here that
    you cannot have it both ways. Maybe they are going to show that
    this is very positive from the standpoint of the economy, if
    you use dynamic scoring. But if you use static scoring, it is
    not going to come out so well.
        I have a question for the other witness. You said this in
    your statement, so it is just a case of elaboration: ``The
    obvious question is whether there are sufficient jobs in the
    low-skilled labor market for both African-Americans and illegal
    immigrants. The answer is no.''
        Mr. Kirsanow. And that is exactly right. As I indicated
    just previously, when we have a labor participation rate that
    has historic lows, we have an abundant supply of low-skilled
    labor waiting for jobs. And it appears as if what we will do by
    regularizing a significant cohort, millions of individuals, is
    leapfrogging those individuals. We have got millions upon
    millions of Americans, not just black Americans but millions
    upon millions who do not have a job right now. And I think it
    is a good idea to reform the immigration system, but due regard
    must be given to the fact that we have an overabundance of
    people who are not working today.
        And if you take a look at the various U-rates--U-3, U-C
    employment population ratios--we are at rates we have not seen
    in 80 years, 75 years. It is astonishing. If we have a
    regularization of a greater pool of individuals who compete on
    a one-by-one basis with Americans here today, those individuals
    are not going to be seeing a job. They do not have the
    resources, skill sets to compete on the same level.
        Senator Grassley. Since my time is up, I would just simply
    make a statement about E-Verify, because I am the author of E-
    Verify, and they said they put my provisions in this bill. I
    have not checked that closely yet. But I think it takes--it
    gives 5 years to put it into effect, and I hope that somebody
    on the panel will be able to say if that is soon enough or if
    it can be done sooner.
        Chairman Leahy. Thank you. I am glad to see so many here,
    and we are going to, as I tried to do, keep on schedule.
        I will yield now to Senator Feinstein. I have to take a
    phone call out back, but I will also hand her the gavel, and I
    should be back in just a few minutes.
        Senator Feinstein [presiding]. Thank you very much, Mr.
    Chairman. I want to use my time to briefly speak about the part
    of the bill that I had something to do with.
        First of all, I want to congratulate Senator Schumer and
    others that worked on crafting the big bill. But I want to
    point out to everyone--and this is the first time I have had a
    chance to do this--that agriculture in this Nation is a huge
    industry, and it is in the main served by undocumented
    immigrants, people who become very skilled at the work that
    they do do.
        One of the things that has happened is that agriculture has
    been inclined to--a lot of it has gone outside of the country.
    Some of it has had to curtail their activities because they
    have not been able to attract an American work force.
        I want particularly to thank Senator Hatch and his staffer,
    Matt Sandgren, who worked on this; along with Senator Rubio and
    his staffer, Enrique Gonzales, who was super; and Senator
    Bennet, who sat through a great many of these negotiating
    sessions. We negotiated with literally a multiplicity of farm
    organizations represented by specific groups as well as the
    Farm Workers Union.
        The employers wanted wage specificity, and they wanted out
    of a BLS statistical gathering, which they believe skewed
    wages. The farm workers wanted decent wages and also worker
    protections. I believe we have achieved both.
        The program has what is called a ``blue card program'' for
    workers that are in this country, have been working ag for a
    period of time, will be committed to continue to work ag, will
    pay a fine, will get a blue card, and that will lead to a green
    card.
        Second, it creates two additional visa programs. It does
    away with H-2A, creates a new contract program, and also an at-
    will portable visa program. They have a cap on visas of 112,000
    visas a year for both programs, 300,000 over 3 years.
        The jurisdiction of the program is placed under the
    Department of Agriculture. Secretary of Agriculture--we
    discussed it with him--he is willing and he will make available
    his Farm Service Agencies, which exist in every county of our
    Nation, to aid farmers as they do the necessary filings, and
    also farm workers as well.
        I believe it is a good solution. My understanding is that
    both sides have held press conferences to indicate their
    support. There are a couple of edits that we need to make in
    the bill, Senator Schumer, but, by and large, it is a good,
    strong program. I believe it will result in a consistent supply
    of agricultural workers for our farmers.
        So I thank you and yield the floor and recognize Senator
    Hatch.
        Senator Hatch. Well, thank you, Senator Feinstein.
        I am appreciative of both of you and your testimony here
    today. The area of high-skilled immigration is very important
    to me. I want to support this bill if I can. I have some
    questions about it, but let me just make a couple of points
    here.
        As you might know, for several years I have served as
    Chairman of the Senate Republican High-Tech Task Force, and in
    January, Senators Klobuchar, Rubio, and Coons and I introduced
    the Immigration Innovation Act of 2013, commonly referred to as
    the ``I-squared bill.''
        To date, I-squared has a total of 26 bipartisan cosponsors,
    five of whom are on the Judiciary Committee. It has been
    endorsed by countless companies and organizations. And if you
    have not already, I hope you will take a look at that bill.
        The I-squared Act addresses the immediate short-term need
    to provide American employers with greater access to high-
    skilled workers. It also addresses a long-term need to invest
    in America's STEM education. This two-step approach will enable
    our country to thrive and help us to compete in today's global
    economy.
        I took a careful look at the high-skilled visa provisions
    of the recently introduced comprehensive bill to see how they
    compared with the I-squared bill. And I want to list for you
    some of the areas that I think need to change in these
    provisions.
        Most people do not realize that this bill requires the
    Government to micromanage compliant American companies and how
    they and their customers choose to interact in the marketplace.
    Unlike I-squared, this bill creates burdensome displacement and
    pre-recruitment obligations. Thus, these provisions inhibit
    companies from effectively operating in a global economy where
    employee mobility is really critical.
        In the introduced comprehensive immigration bill, an
    increase in the H-1B cap is only allowed for the following, not
    current, fiscal year and may only be raised after satisfying a
    complex formula. Therefore, the proposed market adjustment
    mechanism will not effectively respond to real-time needs.
        The proposed STEM education and training language would
    fund federally prescribed priorities instead of directing grant
    money to the States. The States should have the capability to
    set and pursue their individual STEM education needs.
        On a related matter, though, I am very pleased to have
    worked with Senators Feinstein, Rubio, and Bennet in crafting
    the new agriculture visa program in this bill. And throughout
    the negotiations, I cannot tell you how many times I heard
    complaints about the existing H-2A visa category and why we
    needed to craft a new guest worker program to meet the demands
    of the agriculture industry.
        The existing program is underutilized due to how arduous
    and bureaucratic the agricultural employers find the visa
    program, and that is why in this bill we sunset the H-2A
    program.
        And I tell you all this because, as the H-1B and L-1
    provisions currently stand, the bill could be rendered
    unworkable for many U.S. employers, and these visa categories
    could follow the same fate as the soon-to-sunset H-2A program.
        Let me just ask you, Mr. Holtz-Eakin, you have recently
    written that immigration reform can have positive effects on
    economic growth, as you have testified here today, possibly
    raising per capita gross domestic product by over $1,500. Of
    course, many effects of fresh waves of legal immigrants would
    be felt in decades to come and not necessarily in the immediate
    term. But we could also see near-term effects. Legal workers
    pay into the Social Security Trust Funds and eventually collect
    benefits. Of course, if they become disabled, they also collect
    disability insurance from a program with a trust fund which
    will be exhausted by 2016.
        Have you personally thought about what might be near-term
    and longer-term effects on the Social Security programs if
    there were to be a significant increase in legal immigration?
        Mr. Holtz-Eakin. Well, I have thought about that a little
    bit. I think timing is important. I certainly think that, you
    know, concerns about current high levels of unemployment and
    the absence of inflows into the trust fund that come with that
    are legitimate.
        It does not look to me that this bill would have
    significant impacts for anything under 5 years, mostly 10,
    before we see significant inflows. And so I would hope--and I
    am sure you share this--that we are not looking at over 7.5
    percent unemployment 5 years from now and, God forbid, a U-6
    unemployment at 14 percent.
        So if you think of this as entering into an economy that is
    working much better, we will see inflows of immigrants who will
    pay taxes up front that will help fund current retirees and who
    will ultimately qualify for benefits, and there the issue, I
    think, is about the future of the Social Security system. And
    that is a question about Social Security reform, not really
    about immigration reform. I think we do need Social Security
    reform.
        Senator Hatch. Well, I thank you for your work in this area
    and appreciate both of you being here today.
        Senator Feinstein. Thank you very much, Senator Hatch.
        Senator Schumer.
        Senator Schumer. Well, thank you, Senator Feinstein. First,
    let me thank you and Senator Hatch for your great work on
    agriculture. I would also want to thank Chairman Leahy for
    having this hearing. His leadership on the issue of immigration
    has been amazing, and those of us in our little group cannot
    thank him enough for considering our bill and agreeing to mark
    up the bill in the Judiciary Committee.
        I would also note, before I get started with my friend
    Senator Hatch, about 85, 90 percent of what is in his bill is
    in our bill. It is very friendly to high-tech. I know he will
    want to make some changes, but overall it is very positive from
    the high-tech point of view.
        Senator Hatch. I would like you to really look that over.
        Senator Schumer. I will. I will.
        Senator Hatch. Because it deserves more consideration.
        Senator Schumer. You bet.
        OK. Before I get to the bill, I would like to ask that all
    of us not jump to conclusions regarding the events in Boston or
    try to conflate those events with this legislation. In general,
    we are a safer country when law enforcement knows who is here,
    has their fingerprints, photos, et cetera, has conducted
    background checks, and no longer needs to look at needles
    through haystacks.
        In addition, both the refugee program and the asylum
    program have been significantly strengthened in the past 5
    years such that we are much more careful about screening people
    and determining who should and should not be coming into the
    country. And if there are any changes that our homeland
    security experts tell us need to be made, I am committed to
    making them as Chairman of the Immigration Subcommittee and
    would work with others on this Committee to happen.
        And, finally, 2 days ago, as you may recall, there were
    widespread erroneous reports of arrests being made. This just
    emphasizes how important it is to allow the actual facts to
    come out before jumping to any conclusions about Boston.
        Now, on the bill, I believe this is the most balanced piece
    of immigration legislation that has ever been produced. The
    American people and all of our colleagues should read this bill
    over the next few weeks, and they will have ample time to look
    at every page and every paragraph before we go to markup in
    Committee.
        What they will find is a bill that secures our borders,
    combats visa overstays, cracks down on employers who hire
    unauthorized workers, unleashes the potential of our legal
    immigration to create robust economic growth, provides a
    tremendous jolt to our business and leisure travel industries--
    and I want to thank Senator Hirono for her help with that--and
    deals with the status of undocumented individuals in a tough,
    fair, and practical way.
        So I believe one of the words that most signifies this bill
    is ``balance.'' That is why we were able to get eight people of
    very diverse views to agree to a bill, and I think the American
    people will find it the same.
        Now, for questions. First, to Peter Kirsanow, I know you
    are for deporting all the 11 million who are here illegally for
    the reasons you stated. But assume that cannot happen, which
    you do not assume but most people do, even those who are not
    happy about illegal immigration. Isn't it better to have those
    who are here illegally able to work legally because they will
    be able--they will then be paid a higher wage and wage rates
    for everybody else will go up? In my neighborhood, in
    Brooklyn--and I think this is true throughout America--as I
    ride my bicycle through Brooklyn early in the morning and I see
    on street corners people who are waiting, day laborers who are
    waiting to be picked up--and I guarantee you the construction
    workers who are picking them up are not saying, ``I will pay
    you $2 above minimum wage and give you an hour off for lunch.''
    Oh, no. They says, ``Here's 20 bucks for the day.'' And these
    folks, because they are living in the shadows and desperately
    need money, some of which they want to send home, take it.
        So my question for you is very simple: Assume we cannot
    deport the 11 million people. Isn't it better to have a system,
    as in our bill, where people can work, legally work, as opposed
    to work here illegally, which pulls down wage rates even more?
        Mr. Kirsanow. Thanks, Senator Schumer. Two things.
        First, I do not think I testified at all that I am in favor
    of deporting 11 million people. Whether it is 11 million, 10
    million, or 40 million, I do not think we even know how many
    are here. But I am not in favor of deporting them. I am an
    immigrant son. I support immigration. I am fully in favor of
    immigration.
        I am here to tell you today that even if you regularize and
    legalize across the board everyone who works, they are going to
    be subject to the same standards, Fair Labor Standards Act,
    EEO, and everything else. The construction workers you are
    talking about are still going to exist. We are still going to
    have a sizable cohort of individuals who are going to take
    advantage of people regardless of----
        Senator Schumer. Isn't it harder for them to take advantage
    if they are legalized than if they are illegal? That is very
    logical.
        Mr. Kirsanow. Yes, Senator, on the margins. But, you know,
    I live in this world.
        Senator Schumer. OK.
        Mr. Kirsanow. I do this kind of work. I see it on a regular
    basis, and I think we are living in a fantasy land if we think
    that by a stroke of the pen, because we have something on
    paper, all of a sudden people are not going to take advantage
    of economic opportunities.
        Senator Schumer. Well, it is not going to be perfect, and
    people always take advantage, but even you admit that it will
    get better. You just say marginally. Some of us think a lot
    more than that.
        What do you think, Mr. Holtz-Eakin? And then I will yield
    my time.
        Mr. Holtz-Eakin. This strikes me as a question of
    enforcement. This is an issue of whether the provisions as
    written in this reform will be enforced effectively. This
    Committee, the Congress in general, has great powers of
    oversight. It has powers of the purse strings to ensure that
    enforcement takes place as written. And only those on the other
    side of this table can assure us that it will, but you have the
    authorities.
        Senator Schumer. Thank you, Madam Chair.
        Senator Feinstein. Thank you very much, Senator.
        Senator Sessions.
        Senator Sessions. Thank you, Madam Chair, and I thank the
    witnesses.
        It is one thing to read the bill. As you said, Mr. Holtz-
    Eakin, it is another thing to see it enforced. We have got laws
    today that are utterly ignored, not being followed, and I have
    no confidence that this administration, based on what we have
    seen, will ever enforce any law that makes any real difference
    in this situation. That is just the way it is. And we do have a
    big problem there, and we will have to ask, as Senator Grassley
    pointed out, are we going to be like 1986 again when there were
    promises then that we would have effective enforcement? We
    promised a number of things that have not happened, and I could
    go into them and list them.
        Mr. Holtz-Eakin, one thing I think we tend to agree on is
    that the Nation would be better served for more higher-skilled
    workers in areas where there is less competition than lower-
    skilled workers in terms of improving productivity and GDP
    growth.
        Mr. Holtz-Eakin. I certainly think that at the core, moving
    to an immigration system that rewards skills is a good piece of
    economic policy.
        Senator Sessions. One thing I would note is I understand
    your piece that you have written about the increased growth, it
    is based on the assumption there will be no immigration as
    compared to an immigration flow. Is that correct?
        Mr. Holtz-Eakin. Not quite, but I am counting on a
    substantial increase in the number and quality of immigrants.
        Senator Sessions. It appeared to me that basically--well, I
    would just say this: We are not against immigration. We are
    going to have immigration. The question is: Will it be lawful
    and will it serve the national interest? And I think Mr.
    Kirsanow would agree with that.
        Mr. Kirsanow, I think that we need to talk more about the
    issue you are raising. There are people out there hurting
    today. There are young men, particularly, and others, who need
    to be working today that cannot find work. And the jobs and the
    work they get needs to be at a decent wage. They need to have
    another particular for some sort of retirement, maybe a
    vacation, maybe a health care plan that they can operate on.
        And you are correct that we are not providing that today,
    and there is a real social danger happening in America from
    that unemployment.
        Mr. Kirsanow. Senator, I think that the question is: Qui
    bono? Who benefits? And I am not sure--I mean, I would like to
    take my own time in going through the 900-page bill. It would
    be irresponsible for me to comment on any discrete item. There
    are a lot of working parts. I think it would take me months to
    absorb even a tenth of what is going on there. This is a major
    restructuring of our country.
        I live in inner-city Cleveland. It is devastated there, not
    just from the standpoint of unemployment but the downstream
    effects of unemployment. In our hearings at the Civil Rights
    Commission, we focused on the effect of immigration on blacks
    and other low-skilled workers. It dealt with employment. But
    there was a cascade effect that went into incarceration rates,
    marriageability rates, single-family rates, and all of the
    other pathologies that flow from all of those issues.
        Senator Sessions. Well, I think you are exactly correct.
    Professor Borjas at Harvard has written about the connection
    with incarceration rates and higher unemployment rates and
    poverty. We think that is true.
        Mr. Kirsanow, let us consider this situation. A job opens
    up--well, first, let me note that in the last month, according
    to the labor statistics, 88,000 Americans only found a job;
    486,000 dropped out of the labor market; only one-fifth of
    those retired; four-fifths of those dropped out because they
    had given up.
        There is a job that opens up. It pays a decent wage for a
    low-skilled worker, and who should get that job if there is a
    choice? Would it be better for the economy and America if an
    unemployed American drawing unemployment insurance, perhaps on
    welfare or food stamps and other benefits, would it be better
    for America if the American unemployed citizen got that job
    rather than bringing in a laborer from abroad to take that job?
        Mr. Kirsanow. Senator, the question answers itself. We have
    90 million people in the civilian population that are not
    working right now that could work. And we are thinking about
    expanding the labor supply. Not to put too fine a point on it,
    but that is madness. We have too few jobs for way too many
    people.
        Senator Sessions. Colleagues, this is indisputable. We have
    more low-skilled labor than we can find jobs for today. This
    bill does not reduce the flow of low-skilled labor into
    America. It does not confront that problem. And it is the
    fundamental reason--and my Democratic colleagues complained
    when President Bush was in office; they do not do so much now--
    that the average wage of working Americans has been declining
    relative to inflation for maybe 15 or more years.
        Chairman Leahy [presiding]. OK. We----
        Senator Sessions. And I just worry about it, and I think
    this is not considered properly in this bill, which was written
    too often by big business, big agriculture interests, rather
    than the public interest.
        Chairman Leahy. I would note that I was a strong supporter
    of President George W. Bush's efforts to have comprehensive
    immigration policy.
        Senator Whitehouse.
        Senator Whitehouse. Thank you very much.
        Senator Sessions. I opposed it.
        Senator Whitehouse. Thank you, Mr. Chairman.
        This is not the first hearing we have had in the Judiciary
    Committee on immigration, and I want to refer back to a
    Subcommittee hearing that I think Senator Schumer chaired in
    2009 of the Subcommittee on Immigration, Refugees, and Border
    Security. And one of the witnesses that Chairman Schumer called
    was Dr. Alan Greenspan. I think Dr. Greenspan has mixed reviews
    among different folks as to his credibility, but certainly he
    has a considerable number of adherents, shall we put it that
    way. So for the sake of those who are his adherents, I would
    like to relate some of the testimony that he provided in that
    hearing.
        He said, ``There is little doubt that unauthorized--that
    is, illegal--immigration has made a significant contribution to
    the growth of our economy. Unauthorized immigrants serve as a
    flexible component of our work force, often a safety valve when
    demand is pressing, and among the first to be discharged when
    the economy falters. Some evidence,'' to Mr. Kirsanow's point,
    ``suggests that unskilled illegal immigrants marginally
    suppress wage levels.''
        But then he goes on to say, ``However, the estimated wage
    suppression and fiscal costs are relatively small, and
    economists generally view the overall economic benefits of this
    work force as significantly outweighing the costs.'' The
    benefits of this work force as significantly outweighing the
    costs.
        Now, he is saying that about a work force that at that
    point is in a status of being illegal, to use his word,
    ``unauthorized.'' Do you agree with that point? You are an
    economist, Mr. Holtz-Eakin. And would it be affected by
    bringing them, as Senator Schumer said, into the daylight? And
    what effect would that have?
        Mr. Holtz-Eakin. I agree with the basic point. I think that
    the impact of bringing them into the legal labor force would be
    twofold. The first is that it would, from the perspective of
    the worker, eliminate the capacity for exploitation and bad
    work conditions and the like. And from the employer standpoint,
    it would allow them to flexibly manage their labor force
    without fear of legal repercussions, which every employer would
    like to be able to do. And so I concur with the basic point.
        I guess the thing that I find frustrating about the debate
    is that there are two aspects to the economics that I think
    have just emerged as utterly clear over the past several years.
        Number one, the presence of competition that is a real
    issue for our low-skill Americans is not about immigration. It
    is about being in a global economy where there is a great
    abundance of low-skill labor and the geographic location has
    very little to do with it. So the bill does not change that.
    That is a reality, and we cannot change it.
        Senator Whitehouse. The offshoring of American jobs has as
    much to do with it as immigration.
        Mr. Holtz-Eakin. It has as much to do with a skilled worker
    or an unskilled worker being paid half the wage in another
    country and coming here and being paid twice the wage. It is
    competition regardless. And I guess for me, I would hope our
    aspirations would be greater than protecting low-skill
    Americans in perpetuity from competition they cannot avoid and
    instead building their skills. That should be the objective.
        Senator Whitehouse. So just to summarize, if Mr. Greenspan
    is correct, then even as illegal and unauthorized workers, this
    community made ``a significant contribution to the growth of
    our economy,'' and that contribution only goes up when they
    become legal and authorized. Correct?
        Mr. Holtz-Eakin. Yes.
        Senator Whitehouse. OK.
        Mr. Kirsanow, I just want to clear up one thing. I am
    looking at your Wikipedia page. Your Wikipedia page says that
    you oppose--and this is put in quotations--``those in the
    racial grievance industry who talk incessantly about the
    slightest of radical disparities, whether real or imagined.''
        Is that a quote of yours, or is that a quote of somebody
    else that is being put into that article?
        Mr. Kirsanow. Well, as we all know, Wikipedia is
    infallible, so I----
        [Laughter.]
        Senator Whitehouse. That is why I am asking you.
        Mr. Kirsanow [continuing]. Suspect that it must have been--
    no. I will tell you this: I do disagree with those who count on
    the basis of race instead of being colorblind. However, my
    testimony here----
        Senator Whitehouse. But this is not a quote of yours?
        Mr. Kirsanow. I do not recall if it is.
        Senator Whitehouse. OK.
        Mr. Kirsanow. It does not sound like me.
        Senator Whitehouse. I am sorry, Chairman. My time is up.
        Chairman Leahy. Senator Graham.
        Senator Graham. Thank you, Mr. Chairman. I appreciate the
    hearing, and I appreciate all my colleagues who have different
    views, and this is something America needs to work through. But
    let us talk about where as a Nation we are going.
        In 1983, I was a young captain in the Air Force. In 2013, I
    am, by South Carolina standards, a middle-aged Senator.
        In 2043, I will be 87, if I live that long, and if I can
    follow the Senator Thurmond model, I will have two terms left
    in the Senate, and I am going to miss most of you all.
        [Laughter.]
        Senator Graham. So I might be around, but the rest of you,
    I will talk to your families about how we are doing.
        Senator Schumer. Going to have kids, Lindsey, when you are
    about 75?
        [Laughter.]
        Senator Graham. But for those who are around in 2043, here
    is what I want you to look at. If nothing changes, by 2043
    Medicare and Medicaid, Doug, are going to take what percentage
    of GDP to fund?
        Mr. Holtz-Eakin. Oh, at current trajectories, we are going
    to be close to half.
        Senator Graham. That is 18 percent of GDP. All right? How
    much do we collect in revenue today?
        Mr. Holtz-Eakin. About--well, in----
        Senator Graham. About 16 percent.
        Mr. Holtz-Eakin. Normally, we would get to 18, if we are
    lucky.
        Senator Graham. OK. So here is the deal: In 2043, if we do
    not do something about Medicare and Medicaid, it is going to
    take all the money we collect in taxes today plus 2 percent
    just to pay for those programs. How can that be? Ten thousand
    baby boomers a day are retiring. In 1950, there were 16.5
    workers for every Social Security recipient. In 2030, there are
    going to be 2.1. I think your point, Mr. Holtz-Eakin, is that
    unless we have a massive baby boom, the numbers are going the
    wrong direction. Is that what you are telling us?
        Mr. Holtz-Eakin. Absolutely.
        Senator Graham. So how do you supplement--when I was born
    in 1955, there were 16 workers for every retiree. Today there
    is basically three. In 20 years or less, there are going to be
    two. Where does the work force come from to keep the American
    economy going? Would you agree with me, Peter, it comes from
    immigration?
        Mr. Kirsanow. To a certain extent, it comes from
    immigration. But I also think this is a matter of entitlement
    reform. We have to look at the entitlement system.
        Senator Graham. Well, it is a matter of entitlement reform.
    It is a matter of a workforce, too.
        Mr. Kirsanow. That is true, Senator.
        Senator Graham. Two people cannot do what 16 people used to
    do. It is going in the wrong direction. So you are dead right.
    We need entitlement reform. But if we also do not do
    immigration reform to access legal labor, we cannot get to
    where we want to go as a Nation in terms of economic growth.
        Displacing an American worker. Here is the one thing I
    agree with Senator Sessions about. I do not want a foreign
    worker coming in under the H-1B program, you name the program,
    low- or high-skill guest worker program, to displace an
    American worker who is willing to do the job. So in this bill,
    we have a requirement to advertise the job at a competitive
    wage, and we had a knock-down, drag-out about what that was.
        Doug, are you familiar with the agricultural industry?
        Mr. Holtz-Eakin. I am not an expert, but I do know
    something.
        Senator Graham. Well, I think Senator Feinstein is.
        Mr. Holtz-Eakin. She is.
        Senator Graham. Why is it, Peter, that most people in the
    agricultural industry are Hispanic?
        Mr. Kirsanow. I think it is because Hispanics are illegal
    immigrants, for example, are working in the agricultural
    industry at substandard wages.
        Senator Graham. OK. Let us assume that for a moment. If we
    made them all legal, they would receive the benefits of wage
    and hour laws. Do you agree with that?
        Mr. Kirsanow. Many of them would.
        Senator Graham. Do you believe there is a dynamic in
    America that no matter how much you advertise a job, there are
    certain areas of the economy you are not going to find an
    American worker?
        Mr. Kirsanow. I do not know that. I would not necessarily--
    --
        Senator Graham. Well, I can tell you I do. I can tell you I
    do, living in South Carolina. When you go to the meat packing
    plants, it is no accident that everybody in that plant is
    Hispanic. And when you go to the peach farms, it is no accident
    that everybody there is from somewhere else. I am not saying
    that people in South Carolina are lazy. I am saying that there
    are certain parts of this economy you are not going to find an
    American worker no matter what you do, no matter how much you
    advertise, unless you want to just put yourself out of
    business. And that is a reality that is uncomfortable to hear,
    but it is the God's truth.
        Having said that, in the future I want to test my
    proposition by making sure that all these jobs in agriculture,
    all these jobs in meat packing--and you go down the list of
    jobs that are really tough--they are going to be advertised at
    a higher wage than they are today, and we will see who is right
    or who is wrong.
        Mr. Holtz-Eakin, do you believe it is possible for a
    country to have a welfare program that suppresses labor
    participation because when you add up all the benefits, you
    make more not working than you do working?
        Mr. Holtz-Eakin. Absolutely.
        Senator Graham. Do you agree with that, Peter?
        Mr. Kirsanow. I absolutely do.
        Senator Graham. I think we are there.
        Thank you very much.
        Chairman Leahy. All right. Thank you.
        Incidentally, I know that a lot of Senators on both sides
    of the aisle had to rearrange schedules to be here today, and I
    want to thank all my colleagues, again, both sides of the
    aisle, for being here.
        But I would also note the two witnesses were supposed to be
    here this afternoon, and on about 20 minutes notice rearranged
    their schedule, and that means a lot to the Committee. And,
    again, one of the reasons we stream this live, as we have all
    the other hearings we have had on immigration, is so that as
    many people as possible can see it. And as the e-mail traffic
    is coming through, people are watching. Americans are concerned
    about this, even in a week when there is horrible, terrible
    tragic news that seems to be overriding everything else.
        Senator Graham. Mr. Chairman, I would note that Senator
    Cornyn had to go to Texas for that explosion. He intended to be
    here. There are demands that we all have.
        Chairman Leahy. And I understand, and there are some that
    are just inescapable, and I know Senator Cornyn is concerned
    about that. That is one of the terrible things I talked about
    that crowds us out, and if I was Senator Cornyn, I would be
    doing precisely what he is doing. I do not think anybody faults
    him on that.
        Senator Klobuchar.
        Senator Klobuchar. Thank you, Mr. Chairman.
        Dr. Holtz-Eakin, my focus here today is on the economic
    consequences of immigration reform. Senator Hatch already
    mentioned the bill that we did together, along with a number of
    other people on this Committee, called I-squared, which makes
    it easier to bring in a number of professional employees for
    jobs that are open now, but also there is, as you know, a
    number of economic studies that show how that adds more
    American jobs, that when you bring over an inventor or you
    bring over someone who has special skills, the history of this
    country is that they have invented things and come up with new
    ideas that employ literally hundreds of thousands of people,
    and that is our focus.
        So my first comment is just a question. What do you see as
    the two or three biggest benefits, the economic benefits of
    immigration reform, even beyond the issue I just raised?
        Mr. Holtz-Eakin. I think at the core, you know, the bill is
    imperfect as it is written. I think everyone would acknowledge
    that. But it makes the fundamental decision to move away from a
    system that is driven by family reunification, asylum refugee
    considerations, toward an economically based merit system. That
    is, I think, a very healthy development for a country that
    needs to have a larger population in the future, have a skilled
    labor force, compete globally. I think that is the overwhelming
    benefit of the bill.
        Inside that, I think the emphasis on some of the STEM
    provisions, making them more responsive to the economic
    conditions is a good thing. Having an agricultural title that
    provides a genuine entry-exit security system as well as
    meeting the economic conditions I think is a good thing.
        So there are a variety of economic benefits in this
    legislation that I think on balance come out ahead.
        Senator Klobuchar. As you acknowledged in the beginning of
    your testimony, we are in a global economy, and I want America
    to win.
        Mr. Holtz-Eakin. Me, too.
        Senator Klobuchar. And that is why I am so strongly behind
    this reform.
        You talked about how the U.S. is not using immigration
    policy effectively, as many as countries, to improve economic
    growth. Can you expand on that? And what countries do you see
    as doing a good job?
        Mr. Holtz-Eakin. Well, I think, you know, if you look at
    the numbers--and, again, it is in my written testimony--under
    10 percent of the core visas granted are for economic reasons
    at the moment. And given the paramount need for economic growth
    that cuts across our ability to deal with all of our policy
    challenges, in crime, in education, in entitlements, you name
    it, those will all be easier with faster economic growth. I
    think focusing more on them makes sense.
        Other countries--again, we have got charts in the written
    testimony--have a higher percentage devoted to economics. Other
    countries have made reforms recently, including competitors
    like the United Kingdom, looking to do this. And I think if you
    look at the countries that are struggling right now and likely
    to fail--Japan, no immigration, shrinking population. Look at a
    lot of Europe, same considerations. What is the exception in
    Europe? Germany, which has undertaken a vigorous use of, in
    particular, Turkish labor.
        We have to recognize the economic reality and adjust our
    policies to fit it.
        Senator Klobuchar. And I see that this is going
    simultaneously with training our own workers and having more
    and more kids going to science, engineering, technology, and
    math, which has not been going at the pace it should. And we
    cannot just do one thing without the other.
        One of the details of our I-squared bill that is included
    in the Gang of Eight proposal is providing work authorization
    to the spouses of high-skilled workers. And I also see this as
    a women's issue--not only a women's issue, but predominantly a
    women's issue--and also an economic issue, because many of
    these spouses can make great contributions to our economy.
        Can you comment on this provision?
        Mr. Holtz-Eakin. If you look at the past several decades,
    one of the overriding impacts in the U.S. has been the entry of
    women into the labor force. That has been one of the sources of
    increased growth in the United States, probably the most
    important. This adds to simply the gross flows of immigration
    by adding that second kick of both genders participating. I
    think that would be a benefit that allows us to really continue
    something we have seen for the past decades.
        Senator Klobuchar. Good. I head up the Tourism Caucus in
    the Senate. We have worked very hard to increase visa times for
    tourism visas. We have done some really good work with the
    State Department as well as finally advertising our country. In
    this bill, in the Gang of Eight proposal, is the JOLT Act that
    I worked on with Senator Schumer and others that would
    modernize and expand the Visa Waiver Program and reduce visa
    wait times even more. In 2012, international visitors added
    more than $130 billion to the U.S. economy, and I would note
    that since 9/11 we have lost 16 percent of the international
    tourism business. And for every point we have lost, it is
    167,000 jobs right in America.
        Can you talk about the economic benefit of increasing the
    number of tourists who come to visit and why this is important
    to also include this? It is not the first thing that comes to
    people's mind when they think about immigration since this is
    just tourist visas.
        Mr. Holtz-Eakin. Well, I think your question answered it.
    Post 9/11, the need to have an enhanced security regime had big
    impacts on travel and tourism, and we lost a lot of the
    economic benefits. And you can go to the destination cities and
    see the impacts.
        The question going forward is: Can we marry solid economics
    in that area with a secure entry-exit visa system? And that has
    not happened and is something that I would hope could happen.
        Senator Klobuchar. Exactly, and I think the point here is
    that other countries, including some of the ones you mentioned,
    have good security measures, as we do, for these kinds of
    tourist visas. But it is how can we do it more efficiently with
    not changing any of the security screens.
        Mr. Holtz-Eakin. Yes.
        Senator Klobuchar. All right. Thank you very much.
        Chairman Leahy. Senator Lee.
        Senator Lee. Thank you, Mr. Chairman, and thanks to both of
    our witnesses for joining us today.
        Virtually everyone agrees that our immigration system is
    broken and that it needs to be reformed. For far too long, we
    have made it comparatively easy for people to cross our borders
    and stay here illegally, and comparatively hard for those who
    seek to immigrate to our country through the established legal
    channels.
        But solving our immigration woes is not something that is
    simple or straightforward. We do not face just one big
    immigration challenge. It is a complex puzzle with dozens of
    interconnected pieces. And just like the puzzles that we all
    put together as children, some of the pieces cannot be
    incorporated until others are already in place.
        Given this unavoidable reality, it is clear that we are not
    going to be able to fix our entire immigration system
    overnight, nor could we hope to analyze and discuss even a
    small fraction of the most critical issues in one or two
    hearings before this Committee. The process of reform will have
    to be considered and implemented in stages over the course of
    many years.
        Clearly, the challenges we face are hard and will take time
    to address. So it is all the more important that we begin this
    process immediately. I applaud the efforts of my colleagues who
    have worked hard to develop the proposal that is before us
    today. Theirs has been an enormous undertaking, and I
    appreciate their dedication to making progress toward this kind
    of lasting reform that we need.
        Today I look forward to discussing a few key issues that
    are part of the enormous immigration puzzle. I have introduced
    several pieces of immigration reform legislation, at least one
    of which, the JOLT Act, which has been mentioned several times
    today, has been incorporated into this bill. But at the outset,
    I must express two primary concerns with the current bill and
    with the Committee's current path.
        First, like many Americans, I am wary of trying to do this
    all in one fell swoop. Good policy rarely flows from massive
    bills that seek to fix every problem in a single sweeping piece
    of legislation. Few legislators, and perhaps fewer citizens,
    actually understand everything in such bills, and no one can
    even pretend to comprehend all the moving pieces and likely
    outcomes and results. Such wide-ranging legislation inevitably
    produces unforeseen effects and unintended consequences.
        Especially when it comes to our immigration system. Some
    reforms are necessary prerequisites for other subsequent
    reforms. It makes little sense to make decisions about later
    stages before the essential foundations are even in place. And
    it is like trying to put the roof on a new house before raising
    the walls that will hold it up.
        In particular, this bill seeks to address the 11 million
    before other preconditions are actually satisfied, so it treats
    the 11 million as if they are a single monolithic group, all
    here for the same reasons and under the same circumstances,
    which, of course, they are not.
        Trying to resolve every issue all at once is also
    politically problematic. There is broad consensus on some
    necessary reforms, but others are highly controversial. We
    ought not hijack common sense and essential measures by linking
    them to unavoidably contentious ones.
        My second concern is with the Committee's process thus far.
    Reforms of this magnitude and importance deserve more than a
    couple of hastily scheduled hearings. This bill was not even
    made available until Wednesday morning. It totals 844 pages of
    complicated legislative text with dozens of component parts.
    Given the unusually and unnecessarily compressed schedule,
    there has been no real opportunity for Senators, staff, or
    hearing witnesses to read let alone understand and digest the
    entire substance of the bill.
        There is no way that we as a Committee could possibly be
    prepared this morning to debate more than a fraction of this
    massive bill. It would be impossible to have a meaningful
    discussion with rigorous analysis under such circumstances.
    Witnesses were asked to submit written testimony before they
    could have conceivably read the entire bill. And even with the
    help of committed Committee staff, who have worked through the
    night in preparation, none of us can honestly say that we
    understand each provision and how all the pieces fit together.
    Not even close.
        That is why I favor a sensible incremental approach.
    Republicans and Democrats share much in common and agree on a
    lot of common ground on many of the most immediate issues. On
    essential elements like border security, employment
    verification, visa reform, guest worker programs, and high-
    skilled immigration to meet America's economic needs, we are
    largely in agreement and could enact significant reforms in
    these areas. We should not delay meaningful progress in these
    areas just because we have differences in a few others.
        Still, each of these issues is complex and we should have
    robust and substantive debate over the best way to structure
    each such reform. I look forward to beginning that discussion
    today, and thank you for your participation in that.
        Thank you, Madam Chair.
        Senator Feinstein [presiding]. And I thank you, Senator
    Lee.
        Senator Franken.
        Senator Franken. Thank you, Madam Chair. I am really sorry
    that Secretary Napolitano could not be here today, but I want
    to thank her and I want to thank the Department of Homeland
    Security, the FBI, the ATF, the Boston Police Department, and
    all the professionals who are working on this tragedy in
    Boston.
        My wife and I met almost 44 years ago--it is hard to
    believe--at a freshman mixer in Copley Square. So our hearts,
    all Minnesotans' hearts, are with the people in Boston.
        Turning to the subject of our hearing, I really want to
    thank the Senators on this Committee for their work--Senator
    Schumer, Senator Graham, Senator Durbin, Senator Flake, Senator
    Feinstein, Senator Hatch.
        You know, I think that actually we need a comprehensive
    approach to this. I do not think you can do this piecemeal. I
    think everything is complex and interrelated, and that is why
    you have to do--to fix this deeply broken system, you need a
    comprehensive approach. And I think it will--we have had a
    broken system. I think it has been a drag on our economy. Mr.
    Holtz-Eakin, thank you for your testimony. And I think this is
    going to help Minnesota businesses and families alike. So I
    want to thank the Senators who have worked on this, getting us
    as far as we have gotten.
        Mr. Holtz-Eakin, one of the things that I am most pleased
    about in this bill is what it does for agriculture,
    particularly in Minnesota, our dairy industry. Minnesota is one
    of the biggest dairy producers in our Nation. Yet for years
    dairy farmers have not been able to access the work force they
    need. The H-2A program, the one program that allows farmers to
    get guest workers, is open only to seasonal workers, and you
    cannot milk cows seasonally. You could, but you would get very,
    very uncomfortable cows.
        [Laughter.]
        Senator Franken. I have been calling for this----
        Chairman Leahy. And a lot of noise.
        Senator Franken. Yes. Anyway, enough said.
        Chairman Leahy. I used to be Chairman of the Senate
    Agriculture Committee. You are bringing me back to my roots.
        Go ahead.
        Senator Franken. Well, Vermont has a very great dairy
    producing culture.
        So I have been calling for this to be fixed for years, and
    I am glad that the Gang of Eight, as they are called, felt the
    same way.
        Mr. Holtz-Eakin, your testimony touches on the issue of
    productivity. It seems to me that having access to a stable,
    dependable, legal workforce has got to be a boom for various
    parts of our agricultural industry. What do you think?
        Mr. Holtz-Eakin. Well, I think it certainly helps in
    managerial efficiencies, which are going to help overall
    productivity. I think it is important to recognize that what I
    think of as skills or other people may think of when they look
    on a piece of paper does not matter so much as how the market
    determines skills. What are the capabilities that people bring
    to the market?
        We have learned in this country, for example, that people
    who can run welders, skilled tradesmen, are in short supply.
    That might not look great on that form, but it is a highly
    skilled, valuable profession. And so the more we have in
    immigration reform that reflects the economic reality and is
    responsive to it, I think the better off our work force will be
    the higher our productivity will be.
        Senator Franken. As I said, I just believe that our broken
    system has been a drag on the economy, and Senator Graham
    illustrated it very well, the interesting demographic arguments
    that you make in your testimony. And we do have--a lot of us
    boomers are about to retire or some have retired, so I just
    wanted to underscore that point.
        I want to ask about the economic impact of treating same-
    sex couples differently under immigration laws. Two large
    companies headquartered in Minnesota, Carlson and Medtronic,
    say that current law hurts their ability to recruit and retain
    top talent. They are part of a coalition supporting the Uniting
    American Families Act, the Chairman's bill that I am proud to
    support. The bill would give committed same-sex couples the
    same immigration opportunities as other couples.
        I was recently told of another Minnesota company, a smaller
    company--it is a small business--that will likely have to shut
    down because the owners, a same-sex couple, will not be able to
    stay in the country.
        By the way, Mr. Chairman, at this point I would like to
    enter into the record a letter from the 30 companies that
    comprise this coalition. Is that all right, Mr. Chairman? Mr.
    Chairman, I would like to enter a letter from 30 companies in
    support of your bill.
        [Laughter.]
        Chairman Leahy. Under those circumstances, it is quite all
    right. And, of course, we will be delighted to have it. I know
    everybody will want to read it before the day is out. Thank
    you.
        Senator Franken. OK. Thank you.
        [The letter appears as a submission for the record.]
        Senator Franken. I just want to finish this point and maybe
    ask Mr. Holtz-Eakin to speak to it.
        Don't we miss an opportunity to strengthen our economy by
    not allowing LGBT citizens to sponsor their partners for
    residency in this country? Isn't it a matter of fairness and
    also an economic positive?
        Mr. Holtz-Eakin. From an economics point of view,
    productivity is productivity, and you want to take advantage of
    all opportunities to bring that productivity into the
    marketplace. I mean, that is pretty simple. The provisions of
    the bill, I am going to confess, I am not familiar with, and
    the magnitudes involved I could not guess at.
        Senator Franken. OK. Well, thank you. And thank you both
    for your testimony.
        Thank you, Mr. Chairman.
        Chairman Leahy. Thank you.
        Senator Flake.
        Senator Flake. Thank you, Mr. Chairman. Thanks for holding
    this hearing.
        Mr. Holtz-Eakin, when the Congress took this issue up in
    2006, the Heritage Foundation came out with a study with a kind
    of sensational headline that this would cost the taxpayers $2.6
    trillion over some period of time. That study has now been
    discounted by quite a number of organizations--the Wall Street
    Journal, the Cato Institute, and others.
        I know that you have looked at that. What are your feelings
    on a study like that that purports these kind of costs to the
    taxpayers?
        Mr. Holtz-Eakin. I will resist the temptation to turn this
    into a graduate seminar in research design, but I think the top
    line is that I have some reservations about that particular
    Heritage study. The Heritage Foundation has done a lot of good
    work, but in terms of the design of that exercise, first and
    foremost, it leaves out the things that I think are most
    important, the dynamic effects that are in my testimony and the
    study I did. Heritage certainly has the capability of doing
    that kind of analysis, and I would hope that they would bring
    something like that out if the opportunity arose.
        The second thing that I have worried about in that study is
    the basic design does not shed any light on immigration reform.
    There is nothing about that study that says what happens as a
    result of passing legislation, so it does not inform the
    decision that any Congress might face, and I would like to see
    studies designed about looking before and after reform.
        And then the last--and I will not belabor it--is simply
    that the comparisons in that study are between very low-skilled
    immigrants, sub-high school educations, and all of Americans,
    including, by implication, Bill Gates, myself, you--whatever. I
    think that is not a particularly meaningful comparison, and you
    can anticipate the outcome of that kind of a comparison without
    doing any detailed analysis. You know the answer by the way the
    study is constructed.
        Senator Flake. Right. Certain assumptions, I understand,
    were made about the number of immigrants who come in who are
    regularized, who would then take welfare benefits and whatnot.
    Can you speak to that at all?
        Mr. Holtz-Eakin. Again, it was not tied to a particular
    reform exercise, and I think you have to be very careful about
    the assumptions you make. We know that the labor force
    participation of first-generation immigrants is higher than the
    native born. If you go to the second generation, where people
    often worry about take-up of public programs, there are more
    college degrees in second-generation immigrants than in the
    native born. There are more advanced degrees, graduate degrees.
    There are higher rates of labor force participation among
    those.
        So it is not the case that program participation is higher
    than in the native-born population on the whole.
        Senator Flake. Well, thank you.
        Mr. Kirsanow, you mentioned that you believe that the
    number of illegal immigrants currently here exerted downward
    pressure on wages. Is that accurate?
        Mr. Kirsanow. That is correct.
        Senator Flake. And you say that regularizing that
    population would still have some downward pressure on wages.
        Mr. Kirsanow. That is correct.
        Senator Flake. But is it accurate to say that--I mean, the
    alternative would be to continue in the current path of
    allowing these illegal immigrants to work in the workforce,
    exerting that downward pressure, or have some plan to deport
    them somehow or take them out of the workforce. Do you see that
    as a reasonable measure to somehow remove them from the
    workforce short of some kind of reform like this?
        Mr. Kirsanow. Senator, respectfully, I do not think those
    are the alternatives. I think there are a whole host of
    alternatives. I do not think it is a question between
    deportation and regularization. There are a lot of intermediate
    steps that I think the Committee may want to take a look at.
        One of the things I do think--and, again, I have not looked
    at all 900 pages, but taking steps to ensure that it is
    difficult for rogue employers to employ illegal immigrants or
    employ anybody outside the framework of existing law would be
    very salutary. We can do that. There are a number of gradations
    we can employ far short of deportation. But if we do that, I
    think that we will get far along the process of making sure
    that everybody in America is paid the way they are supposed to
    be paid, that they are not working under substandard
    conditions.
        Senator Flake. You are aware of testimony from groups like
    a group that you used to represent, the National Association of
    Manufacturers, saying that they simply cannot find the skilled
    labor they need among our workforce now, and that the economy
    would benefit with some kind of program to allow others to come
    in.
        Do you concede any economic benefits, like Mr. Holtz-Eakin
    does, to this kind of reform?
        Mr. Kirsanow. I would yield to Doug on a number of issues
    related to economic benefits. However, there is a significant
    downward pressure on a whole host of occupational categories by
    regularization, and I think that is unequivocal. I think that
    we have had at least two hearings before the Civil Rights
    Commission where there was almost near unanimity that that is
    the case.
        Now, I do think that we should have some type of
    immigration reform, and I think deliberation must be had with
    respect to how to do that in a considered fashion so that there
    is a group of people, and especially low-skilled Americans, who
    are not thrown under the bus.
        I hear a lot of discussion about the benefit to the United
    States economy, but low-skilled Americans are a significant
    part of that economy, and I think they are being completely
    excluded from this discussion.
        Senator Flake. Thank you, Mr. Chairman.
        Chairman Leahy. Thank you, Senator Flake, and like all of
    you, I appreciate the time that the eight of you spent with me
    in the briefings before we set up these hearings. I know a lot
    of you had to juggle your schedules around to do that, but I
    thought it was a productive meeting. And I was struck by the--
    with four key Democrats and four key Republicans, I was struck
    by the complete absence of partisanship in that meeting.
        Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        I am pleased that the Gang of Eight has reached an
    agreement and produced a bill that will overhaul the current
    immigration system in ways that will provide help to millions
    of individuals and their families. And, in fact, three of the
    Gang of Eight members are members of this Committee, and I
    thank them--Senators Schumer, Durbin, and Flake. And, of
    course, Chairman Leahy, so many other members--Senators
    Feinstein, Hatch, Graham, Klobuchar--have had tremendous input
    into this bill, and we will all continue to discuss this bill
    as we go forward.
        Mr. Holtz-Eakin, there are economic considerations that are
    attended to throughout this bill. In fact, there is very much
    support for economic considerations in this bill.
        So, Mr. Chairman, I would like to spend some time and focus
    on families in my remarks, and I start by saying that family
    unity is very much a part of economic success for immigrants.
    So family unity issues, economic success, economic vitality,
    these are not either/or propositions. Those two should go
    together, in my view.
        So this bill will help some families to reunite, but for
    others, especially from Asian countries, it will dramatically
    restrict the ability of families to reunite with certain loved
    ones, which has been the basis of our immigration system since
    1965. And while I understand that compromises had to be made, I
    believe that in some areas this bill is more restrictive than
    necessary, and, of course, I will join my colleagues in
    continuing to improve this bill.
        Specifically, S. 744 eliminates the sibling category and
    restricts the adult married children category and replaces it
    with a merit-based point system. I believe that the new merit-
    based visa system could exclude many immigrant family members
    from reuniting with their U.S. citizen siblings. This is
    troubling because siblings are an integral part of family
    structure. They support and help each other find jobs, provide
    both emotional and financial support, and care for each other's
    families.
        In addition, many times a sibling may be your only family
    member. For example, I recently met a woman named Nadine whose
    brother is her only remaining family member. They are extremely
    close and have been separated for many years. I am concerned
    that cases like Nadine's will no longer have a meaningful
    opportunity to petition for their sibling.
        I would also like to see improvements to the family system
    to include LGBT families, brought up by my colleague Senator
    Franken, and the children of Filipino World War II veterans.
    And I know that we are joined at this hearing by some of our
    Filipino World War II veterans who have been separated from
    their children for decades.
        So, Mr. Chairman, I look forward to continuing discussions
    and an opportunity to improve this legislation. There have
    already been comments on improving the Visitor Visa Program,
    which I very much support, and I yield the remainder of my
    time.
        Thank you, Mr. Chairman.
        Chairman Leahy. Well, thank you, and I thank everybody who
    has been here. I think this has been a good hearing. We are in
    the process of arranging the time for Secretary Napolitano to
    be here. I think all of us realize with what is going on why
    the Secretary of Homeland Security is at Homeland Security,
    even as I have received ongoing briefings of the circumstances
    there, and should be. But I thank everybody for taking the
    time, and we will have another hearing on Monday. We are
    arranging then another day for Secretary Napolitano.
        I thank the two witnesses who came here, who rearranged
    their own schedules on very short notice. I appreciate it. That
    is what makes the Committee work.
        I would also note for the record that, as you go back over
    your notes and want to add to any of your answers, of course I
    will keep the record open for that. We are not playing a game
    of ``gotcha.'' We are just trying to have the best possible
    record.
        And, again, I thank all the Senators of both parties for
    being here.
        We stand in recess subject to the call of the Chair.
        [Whereupon, at 11:49 a.m., the Committee was adjourned.]
        [Questions and answers and submission for the record.]

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