Documented Flaws

The immigration bill's disturbing fine print

by John B. Judis | May 30, 2013

photo credit: Alex Wong/Getty Images News

After years of fits and starts, immigration reform finally looks as if it’s about to pass. The latest proposal is backed not only by the usual upscale Democrats and Chamber of Commerce Republicans, but also by Tea Party favorite Marco Rubio, pro-labor Democrat Sherrod Brown, and the AFL-CIO. Conservative Republicans favor reform because they realize the party can’t ignore the growing Hispanic vote. And the unions are hopeful of recruiting new members and accommodating a growing constituency within their ranks.

Many observers think this is exactly how politics is supposed to work. But bipartisanship in Washington has its own unfortunate tendencies, namely a bias toward the interests of the rich and powerful. We saw this in financial reform, and now we’re seeing it again with immigration. To their credit, the Obama administration and the Senate negotiators have tried to fashion a bill that addresses the plight of eleven million undocumented immigrants while protecting citizens from undue job competition. But the proposal still puts the onus of sacrifice primarily on undocumented immigrants and low-income citizens, while exempting businesses and the wealthy. The bill reaffirms political scientist E. E. Schattschneider’s adage that American pluralism invariably “sings with an upper-class accent.”

Just look at the tortuous way the bill deals with immigrants’ access to the Affordable Care Act. The bill denies health insurance coverage to the eleven million undocumented workers, who will become “registered provisional immigrants” (RPIs), and to over 100,000 guest agricultural workers (who will get “blue cards” rather than “green cards”). Only after immigrants become permanent residents, which in the case of the eleven million undocumented will take a minimum of ten years and as long as 15 years, will they become eligible for Obamacare.

This is obviously bad health policy. Low-skilled immigrants who work in physically strenuous and polluted settings will be denied preventive coverage and treatment for chronic diseases, and if they acquire serious illnesses—tuberculosis, cirrhosis of the liver, and several cancers are common among immigrant farm workers—they will have to go to sequester-squeezed emergency rooms.

But it’s also bad economics. It creates an incentive for employers to hire the new immigrants over citizens or green-card holders and to provide neither with health insurance. Under the Affordable Care Act, employers with fewer than 50 workers do not have to buy health insurance for their employees, but businesses with 50 or more workers—which employ about three-quarters of American workers—either have to provide insurance or pay a fine for those workers who buy insurance through the exchanges the act creates. The fine is ordinarily $2,000 but can run as high as $3,000.

Businesses with 50 or more employees that choose to pay a fine rather than provide insurance will not have to pay fines for the RPIs or blue-card holders because they are not eligible for the exchanges. So employers will be able to save from $2,000 to $3,000 a year by hiring a new immigrant over an American citizen. For salaries that hover between $15,000 and $25,000, as they do in many immigrant-heavy industries, that’s no small savings. Even an advocate for low-income immigrants sees the language as a potential problem: “We don’t want them to hire immigrants over citizens because of that loophole,” says Sonal Ambegaokar, who analyzes health policy for the National Immigration Law Center. “We want a level playing field.”

The bill’s denial of coverage doesn’t only give immigrants an advantage over citizens when it comes to new hires. It also gives larger businesses that employ immigrants a reason to drop insurance altogether. If they offer insurance to one employee, they need to offer it to all employees, including immigrants. But if they deny it to everyone, they’ll only pay fines for workers who are citizens.

This all could have been avoided if Obamacare had just insured undocumented immigrants in the first place. But in the fall of 2009, the administration, facing charges from Republicans that the health care bill secretly funded “illegal immigrants,” urged Senate Democrats to bar the undocumented from coverage. The administration, fearful of political trouble, reflexively carried this over to its own immigration-reform proposals. “The point was to get immigration done,” one White House official told me.

Among the Senate’s Gang of Eight, Rubio was particularly insistent on denying coverage to new immigrants, and according to those familiar with the negotiations, New York Senator Chuck Schumer and other Democrats went along in order to avoid charges of reckless spending. And none of the other players complained. The AFL-CIO, which you would expect to be particularly attentive to such issues, never brought it up in its negotiations over the bill. The right-leaning Investor’s Business Daily ran a short story about the loophole, but for the most part, conservatives, preoccupied with denying coverage to the undocumented, have ignored how the provision also disadvantages citizens.

Immigration reform could have been fairer:It could have improved wages and benefits for both immigrants and citizens.

 

Defenders of the bill cite the arduous negotiations between the AFL-CIO and the Chamber of Commerce over non-agricultural guest workers. The AFL-CIO won important concessions on wages and working conditions, but these will apply, at first, to only 185,000 guest workers over four years, not to the eleven million undocumented workers or the guest farm workers who will continue to compete with American citizens on wages as well as benefits.

Some might downplay the Obamacare loophole by arguing that RPIs and farm workers take jobs that American citizens aren’t willing to do in the first place. A story in National Journal was headlined, “Left and Right Agree: Immigrants Don’t Take American Jobs.” When a Judiciary Committee witness warned that the bill could affect native jobs and wages, particularly among African Americans, South Carolina Senator Lindsey Graham, one of the Gang of Eight, responded that “there are certain parts of this economy [where] you’re not going to find an American worker.”

But this argument is wrong. As a Center for Immigration Studies report has shown, most jobs thought to be filled only by immigrants are, in fact, filled by a majority of native-born Americans. That includes 64 percent of grounds-maintenance workers, 66 percent of construction laborers, 73 percent of janitors, 51 percent of maids and housekeepers, and 63 percent of butchers and meat processors. Even on farms, the native-born constitute at least a third of the workforce. What seems to have misled people like Graham is that many of the workers in these occupations are Hispanic—Graham has reported finding only “Hispanics” at some South Carolina workplaces—but Hispanic citizens make up a growing percentage of the American working class, and they too could lose employer health insurance because of immigration reform’s Obamacare loophole.

Immigration reform could have been fairer: It could have been coupled with a dramatic increase in the minimum wage for all workers or could have required employers to provide health insurance. These measures would have improved wages and benefits for both new immigrants and citizens. Instead, businesses will be able to use a surplus of potential employees to keep their costs down, while America’s professionals will continue to get nannies and landscapers at a sharp discount. Undocumented workers, on the other hand, will be denied the benefits that, as taxpayers, they fund. (As proposed, they would even have to pay a penalty for not having insurance.) Many guest workers will be denied a clear path to citizenship. And America’s lower-class workers, who still suffer double-digit unemployment, will have more competition for jobs.

Still, passing the immigration-reform bill is better than doing nothing: It will allow the eleven million undocumented workers to live in the open. That’s no small achievement. The bill also will provide important protections for the smaller group of guest workers covered by the negotiations between the AFL-CIO and the Chamber of Commerce. These protections could eventually serve as a model for all immigrants. But the bill still puts an undue burden on Americans at the lowest rung of the social and economic ladders, most of whom don’t vote and don’t have strong advocates on K Street.

When Jimmy Carter signed a bill effectively denying the right to abortion to women who couldn’t pay for one, he said, “There are many things in life that are not fair.” But the problem here, and with this bill, isn’t life. It’s Washington, and the way it works.

John B. Judis is a senior editor at The New Republic.

Source URL: http://www.newrepublic.com//article/113295/immigration-bill-denies-obamacare-undocumented-workers