[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




                  U.S. GOVERNMENT PRINTING OFFICE

81-635                    WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001




                       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.]


    [GRAPHIC] [TIFF OMITTED] 81635.001
    
    [GRAPHIC] [TIFF OMITTED] 81635.002
    
    [GRAPHIC] [TIFF OMITTED] 81635.003
    
    [GRAPHIC] [TIFF OMITTED] 81635.004
    
    [GRAPHIC] [TIFF OMITTED] 81635.005
    
    [GRAPHIC] [TIFF OMITTED] 81635.006
    
    [GRAPHIC] [TIFF OMITTED] 81635.007
    
    [GRAPHIC] [TIFF OMITTED] 81635.008
    
    [GRAPHIC] [TIFF OMITTED] 81635.009
    
    [GRAPHIC] [TIFF OMITTED] 81635.010
    
    [GRAPHIC] [TIFF OMITTED] 81635.011
    
    [GRAPHIC] [TIFF OMITTED] 81635.012
    
    [GRAPHIC] [TIFF OMITTED] 81635.013
    
    [GRAPHIC] [TIFF OMITTED] 81635.014
    
    [GRAPHIC] [TIFF OMITTED] 81635.015
    
    [GRAPHIC] [TIFF OMITTED] 81635.016
    
    [GRAPHIC] [TIFF OMITTED] 81635.017
    
    [GRAPHIC] [TIFF OMITTED] 81635.018
    
    [GRAPHIC] [TIFF OMITTED] 81635.021
    
    [GRAPHIC] [TIFF OMITTED] 81635.022
    
    [GRAPHIC] [TIFF OMITTED] 81635.023
    
    [GRAPHIC] [TIFF OMITTED] 81635.024
    
    [GRAPHIC] [TIFF OMITTED] 81635.025
    
    [GRAPHIC] [TIFF OMITTED] 81635.026
    
    [GRAPHIC] [TIFF OMITTED] 81635.027
    
    [GRAPHIC] [TIFF OMITTED] 81635.028
    
    [GRAPHIC] [TIFF OMITTED] 81635.019
    
    [GRAPHIC] [TIFF OMITTED] 81635.020
    
    [GRAPHIC] [TIFF OMITTED] 81635.029
    
    [GRAPHIC] [TIFF OMITTED] 81635.030
    
    [GRAPHIC] [TIFF OMITTED] 81635.031
    
    [GRAPHIC] [TIFF OMITTED] 81635.032
    
    [GRAPHIC] [TIFF OMITTED] 81635.033
    
    [GRAPHIC] [TIFF OMITTED] 81635.034
    
    [GRAPHIC] [TIFF OMITTED] 81635.035
    
    [GRAPHIC] [TIFF OMITTED] 81635.036
    
    [GRAPHIC] [TIFF OMITTED] 81635.037
    
    [GRAPHIC] [TIFF OMITTED] 81635.038
    
    [GRAPHIC] [TIFF OMITTED] 81635.039
    
    [GRAPHIC] [TIFF OMITTED] 81635.040
    
    [GRAPHIC] [TIFF OMITTED] 81635.041
    
    [GRAPHIC] [TIFF OMITTED] 81635.042
    
    [GRAPHIC] [TIFF OMITTED] 81635.043
    
    [GRAPHIC] [TIFF OMITTED] 81635.044
    
    [GRAPHIC] [TIFF OMITTED] 81635.045
    
    [GRAPHIC] [TIFF OMITTED] 81635.046
    
    [GRAPHIC] [TIFF OMITTED] 81635.047
    
    [GRAPHIC] [TIFF OMITTED] 81635.048
    
    [GRAPHIC] [TIFF OMITTED] 81635.049
    
    [GRAPHIC] [TIFF OMITTED] 81635.050
    
    [GRAPHIC] [TIFF OMITTED] 81635.051
    
    [GRAPHIC] [TIFF OMITTED] 81635.052
    
    [GRAPHIC] [TIFF OMITTED] 81635.053
    
    [GRAPHIC] [TIFF OMITTED] 81635.054
    
    [GRAPHIC] [TIFF OMITTED] 81635.055
    
    [GRAPHIC] [TIFF OMITTED] 81635.056
    
    [GRAPHIC] [TIFF OMITTED] 81635.057
    
    [GRAPHIC] [TIFF OMITTED] 81635.058
    
    [GRAPHIC] [TIFF OMITTED] 81635.059
    
    [GRAPHIC] [TIFF OMITTED] 81635.060
    
    [GRAPHIC] [TIFF OMITTED] 81635.061
    
    [GRAPHIC] [TIFF OMITTED] 81635.062
    
    [GRAPHIC] [TIFF OMITTED] 81635.063
    
    [GRAPHIC] [TIFF OMITTED] 81635.064
    
    [GRAPHIC] [TIFF OMITTED] 81635.065
    
    [GRAPHIC] [TIFF OMITTED] 81635.066
    
    [GRAPHIC] [TIFF OMITTED] 81635.067
    
    [GRAPHIC] [TIFF OMITTED] 81635.068
    
    [GRAPHIC] [TIFF OMITTED] 81635.069
    
    [GRAPHIC] [TIFF OMITTED] 81635.070
    
    [GRAPHIC] [TIFF OMITTED] 81635.071
    
    [GRAPHIC] [TIFF OMITTED] 81635.072
    
    [GRAPHIC] [TIFF OMITTED] 81635.073
    
    [GRAPHIC] [TIFF OMITTED] 81635.074
    
    [GRAPHIC] [TIFF OMITTED] 81635.075
    
    [GRAPHIC] [TIFF OMITTED] 81635.076
    
    [GRAPHIC] [TIFF OMITTED] 81635.077
    
    [GRAPHIC] [TIFF OMITTED] 81635.078
    
    [GRAPHIC] [TIFF OMITTED] 81635.079
    
    [GRAPHIC] [TIFF OMITTED] 81635.080
    
    [GRAPHIC] [TIFF OMITTED] 81635.081
    
    [GRAPHIC] [TIFF OMITTED] 81635.082
    
    [GRAPHIC] [TIFF OMITTED] 81635.083
    
    [GRAPHIC] [TIFF OMITTED] 81635.084
    
    [GRAPHIC] [TIFF OMITTED] 81635.085
    
    [GRAPHIC] [TIFF OMITTED] 81635.086
    
    [GRAPHIC] [TIFF OMITTED] 81635.087
    
    [GRAPHIC] [TIFF OMITTED] 81635.088
    
    [GRAPHIC] [TIFF OMITTED] 81635.089
    
    [GRAPHIC] [TIFF OMITTED] 81635.090
    
    [GRAPHIC] [TIFF OMITTED] 81635.091
    
    [GRAPHIC] [TIFF OMITTED] 81635.092
    
    [GRAPHIC] [TIFF OMITTED] 81635.093
    
    [GRAPHIC] [TIFF OMITTED] 81635.094
    
    [GRAPHIC] [TIFF OMITTED] 81635.095
    
    [GRAPHIC] [TIFF OMITTED] 81635.096
    
    [GRAPHIC] [TIFF OMITTED] 81635.097
    
    [GRAPHIC] [TIFF OMITTED] 81635.098
    
    [GRAPHIC] [TIFF OMITTED] 81635.099
    
    [GRAPHIC] [TIFF OMITTED] 81635.100
    
    [GRAPHIC] [TIFF OMITTED] 81635.101
    
    [GRAPHIC] [TIFF OMITTED] 81635.102
    
    [GRAPHIC] [TIFF OMITTED] 81635.103
    
    [GRAPHIC] [TIFF OMITTED] 81635.104
    
    [GRAPHIC] [TIFF OMITTED] 81635.105
    
    [GRAPHIC] [TIFF OMITTED] 81635.106
    
    [GRAPHIC] [TIFF OMITTED] 81635.107
    
    [GRAPHIC] [TIFF OMITTED] 81635.108
    
    [GRAPHIC] [TIFF OMITTED] 81635.109
    
    [GRAPHIC] [TIFF OMITTED] 81635.110
    
    [GRAPHIC] [TIFF OMITTED] 81635.111
    
    [GRAPHIC] [TIFF OMITTED] 81635.112
    
    [GRAPHIC] [TIFF OMITTED] 81635.113
    
    [GRAPHIC] [TIFF OMITTED] 81635.114
    
    [GRAPHIC] [TIFF OMITTED] 81635.115
    
    [GRAPHIC] [TIFF OMITTED] 81635.116
    
    [GRAPHIC] [TIFF OMITTED] 81635.117
    
    [GRAPHIC] [TIFF OMITTED] 81635.118
    
    [GRAPHIC] [TIFF OMITTED] 81635.119
    
    [GRAPHIC] [TIFF OMITTED] 81635.120
    
    [GRAPHIC] [TIFF OMITTED] 81635.121
    
    [GRAPHIC] [TIFF OMITTED] 81635.122
    
    [GRAPHIC] [TIFF OMITTED] 81635.123
    
    [GRAPHIC] [TIFF OMITTED] 81635.124
    
    [GRAPHIC] [TIFF OMITTED] 81635.125
    
    [GRAPHIC] [TIFF OMITTED] 81635.126
    
                                 
