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Member Questions of the Week of August 23, 2010

Elaine Rigsby of Tulsa, OK asks: “I would like to know the truth about illegal immigration and what it costs our country. Do illegals pay taxes and receive healthcare benefits?”
OUR ANSWER: As Heritage research fellow Robert Rector testified before the House Subcommittee on Immigration, low-skill immigrant households receive more in benefits than they pay in taxes. Specifically, in FY 2004, the average low-skill immigrant household received more than $30,000 in direct benefits, means-tested benefits, education and population-based services — but paid just $10,573 in taxes. Illegal immigrant households comprised 40 percent of those low-skill immigrant households. State and local governments are particularly hard-hit by the costs of illegal immigration. According to this Solutions for America report, in 2007, illegal immigrants cost the state of California between $9 billion and $38 billion in public services. Amnesty would only make the problem worse: A bill to legalize 12 million illegal immigrants would cost taxpayers up to $90 billion a year.

Charles Smith of Austin, TX asks: “Congress has avoided so many of the country’s problems for so long that we now face huge risks to our freedoms on many fronts. I’m most concerned about what we do with the unfunded liabilities of the Medicare, Medicaid and Social Security programs. How should we solve the solvency of these huge programs, so to speak?”
OUR ANSWER: Medicare, Medicaid and Social Security are truly liabilities. Without reforms, these entitlement programs will more than double the historical average of federal spending from 20 percent of the economy to nearly 50 percent in just two generations, according to this Solutions for America report. We would have to take out the equivalent of a mortgage of $63 trillion to cover the future debt costs of these entitlements — and each persons share of that hidden mortgage now exceeds $200,000. We propose a series of solutions. Above all, Congress must set firm and enforceable budget caps for these programs. The legislature should also establish a new Medicare “defined contribution” system and a system of voluntary personal accounts within Social Security. In addition, automatic enrollment, which automatically enrolls workers in employer-sponsored retirement savings, should be expanded. The need for reform is urgent if we are to avoid the fate of Greece or even Britain and surmount the moral challenge entitlements pose. As the report states, “It is simply wrong to make unsustainable promises to todays adults by shackling our children and grandchildren with crippling debt or heavy taxes.”

Erik Johnson of Nashotah, WI asks: “Can you list a breakdown or chart on what the U.S. federal government spends our money?”
OUR ANSWER: Check out our user-friendly Budget Chart Book to learn about the federal budget through pictures. The book includes charts that depict federal spending, federal revenue, debt and deficits, and entitlements. As the charts make clear, we are in desperate need of a reform of the budget process. That budget process reform should include a number of elements, including: statutory spending caps, realistic and honest budget scoring, tools for accountability, tools for spending restraints and pork and grant reform.

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