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THE FISCAL COSTS OF THE PRESIDENT’S 

EXECUTIVE ACTIONS ON IMMIGRATION 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY 

AND THE

SUBCOMMITTEE ON HEALTH CARE, 

BENEFITS AND ADMINISTRATIVE RULES 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MARCH 17, 2015 

Serial No. 114–14 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 
(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

JASON CHAFFETZ, Utah, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

CYNTHIA M. LUMMIS, Wyoming 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK MULVANEY, South Carolina 

KEN BUCK, Colorado 

MARK WALKER, North Carolina 

ROD BLUM, Iowa 

JODY B. HICE, Georgia 

STEVE RUSSELL, Oklahoma 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

WILL HURD, Texas 

GARY J. PALMER, Alabama 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MATT CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

BRENDA L. LAWRENCE, Michigan 

TED LIEU, California 

BONNIE WATSON COLEMAN, New Jersey 

STACEY E. PLASKETT, Virgin Islands 

MARK DeSAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

PETER WELCH, Vermont 

MICHELLE LUJAN GRISHAM, New Mexico 

SEAN MCLAUGHLIN, Staff Director 

DAVID RAPALLO, Minority Staff Director 

ART ARTHUR, Staff Director, Sub Committee on National Security 

MELISSA BEAUMONT, Clerk 
(III) 

SUBCOMMITTEE ON NATIONAL SECURITY

RON DESANTIS Florida, Chairman 

JOHN L. MICA, Florida 

JOHN J. DUNCAN, JR. Tennessee 

JODY B. HICE, Georgia 

STEVE RUSSELL, Oklahoma, Vice Chair 

WILL HURD, Texas 

STEPHEN F. LYNCH, Massachusetts, 

Ranking Member 

ROBIN L. KELLY, Illinois 

BRENDA L. LAWRENCE, Michigan 

TED LIEU, California 

SUBCOMMITTEE ON HEALTH CARE, BENEFITS AND ADMINISTRATIVE RULES

JIM JORDAN, Ohio, Chairman 

TIM WALBERG, Michigan 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

CYNTHIA M. LUMMIS, Wyoming 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK MULVANEY, South Carolina, Vice 

Chair 

MARK WALKER, North Carolina 

JODY B. HICE, Georgia 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

MATT CARTWRIGHT, Pennsylvania, 

Ranking Member 

ELEANOR HOLMES NORTON, District of 

Columbia 

BONNIE WATSON COLEMAN, New Jersey 

MARK DESAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

JIM COOPER, Tennessee 

MICHELLE LUJAN GRISHAM, New Mexico 

Vacancy 

(V) 

C O N T E N T S 

Page 

Hearing held on March 17, 2015 ............................................................................ 1 

WITNESSES 

Mr. Robert Rector, Senior Research Fellow, Domestic Policy Studies, DeVos 

Center for Religion and Civil Society, The Heritage Foundation 

Oral Statement ................................................................................................. 4 

Written Statement ............................................................................................ 7 

Steven A. Camarota, Ph.D., Director of Research, Center for Immigration 

Studies 

Oral Statement ................................................................................................. 20 

Written Statement ............................................................................................ 22 

Ms. Eileen J. O’Connor, Esq., Partner, Pillsbury Winthrop Shaw Pittman 

LLP 

Oral Statement ................................................................................................. 32 

Written Statement ............................................................................................ 34 

Ms. Avideh Moussavian, Economic Justice Policy Attorney, National Immigration Law Center 

Oral Statement ................................................................................................. 41 

Written Statement ............................................................................................ 43 

APPENDIX 

March 16, 2015 GAO Report, ‘‘Improper Payments,’’ submitted by Rep. 

DeSantis ................................................................................................................ 72 

(1) 

THE FISCAL COSTS OF THE PRESIDENT’S 

EXECUTIVE ACTIONS ON IMMIGRATION 

Tuesday, March 17, 2015, 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIONAL SECURITY JOINT WITH THE

SUBCOMMITTEE ON HEALTH CARE, BENEFITS AND

ADMINISTRATIVE RULES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, DC. 

The subcommittee met, pursuant to notice, at 2:15 p.m. in room 

2154, Rayburn House Office Building, the Honorable Ron DeSantis 

[chairman of the subcommittee on National Security], presiding. 

Present: Representatives DeSantis, Jordan, Mica, Gosar, Meadows, Mulvaney, Walker, Hice, Carter, Walberg, Cartwright, Norton, 

Lynch, Lawrence, Lieu, Watson Coleman, and DeSaulnier. 

Mr. DESANTIS. The Subcommittee on National Security and the 

Subcommittee on Health Benefits and Administrative Rules will 

come to order. 

Without objection, the Chair is authorized to declare a recess at 

any time. 

On November 20, 2014, President Obama announced a series of 

executive actions regarding illegal immigration. These actions 

grant benefits to non-citizens who are unlawfully present in the 

United States, including work permits and Social Security numbers. 

Twenty-six States among others have challenged the legality and 

constitutionality of these actions. In fact, a Federal district court 

has recently issued a preliminary injunction halting implementation of these executive actions. Time will tell whether the President’s actions will hold up in court. 

Enacting major policy changes by executive fiat deprives the 

American people of their right to influence important policy debates. With this in mind, the fiscal cost associated with the President’s actions need to be examined as the American people will be 

required to pay the tab for what the President did. 

Unfortunately, but not surprisingly, the Obama Administration 

has not released any numbers on how much these executive actions 

will cost American taxpayers, nor is there any evidence that the 

Obama Administration sought advice from other government agencies or departments, let alone State and local governments, about 

the consequences of these actions. 

IRS Commissioner John Koskinen recently testified before this 

committee that the White House did not consult with him when 

putting together its immigration plan. This is noteworthy because 
2 

illegal immigrants granted Social Security numbers will be able to 

claim the refundable earned income tax credit. 

They will be able to file retroactively amended returns for the 

prior 3 years for work performed illegally in the United States. 

This means that illegal immigrants benefiting from the President’s 

action will be able to claim as much as, and perhaps more than, 

$24,000 in refunds even though the work performed was not lawful 

to begin with. 

And course the work permits issued to illegal immigrants under 

the President’s Executive Orders will give the amnestied illegal 

worker a hiring preference over an American worker due to being 

exempt from ObamaCare’s Employer Mandate. 

Furthermore, it is an open question if the non-citizen is granted 

legal status will be tax consumes or tax contributors. That is, will 

they consume more in benefits than they pay in taxes. To answer 

that question among others, we have a panel of distinguished experts today to discuss the possible cost of the President’s executive 

actions. 

The White House, Federal agencies, Congress, State and local 

governments need to understand the cost of these actions should 

they go forward. The American taxpayer should not have to bear 

the burden of paying for an illegal program. 

Mr. DESANTIS. I ask unanimous consent that our colleague and 

fellow Government Oversight and Reform Committee member, Mr. 

Gosar, be allowed to fully participate in today’s hearing. Without 

objection, so ordered. 

I now recognize Mr. Cartwright, the Ranking Member of the 

Benefits Subcommittee, for his opening Statement. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

I thank you for convening this afternoon’s hearing on the potential cost of the Administration’s executive actions on immigration. 

There are indeed costs to immigration, costs that really cannot 

be boiled down to a pissy sound bite. Certainly, there is much disagreement on what to do about the 11 million undocumented immigrants in the United States. 

I think we can all agree that the cost of doing nothing is too 

much to bear. That is why I supported and will continue to support 

comprehensive immigration reform that includes a tough but fair 

path to citizenship. I believe illegal conduct must be punished with 

heavy fees and fines and dangerous, undocumented persons need 

to be deported. 

A plan like that would bring undocumented immigrants out of 

the shadows and transform them into taxpaying individuals, paying their fair share into our health care system and our Social Security systems. 

In the last Congress, the Senate passed a bipartisan bill that 

would have helped fix our broken immigration system while also 

spurring economic growth in my northeastern Pennsylvania, where 

my district is, and also across the Country. 

In fact, according to a White House report, the bipartisan Senate 

immigration bill would have spurred Pennsylvania’s economy and 

created approximately 15,780 new jobs and generated $64 million 

for Pennsylvania. That was a bill that was supported by the U.S. 

Chamber of Commerce and the American Farm Bureau. 
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Following the House Republican leadership’s failure to act on 

that bipartisan Senate immigration bill, the Administration took 

executive action, as you all know, late last year. Anticipated economic benefits are significant. 

For example, the White House Council on Economic Advisors has 

conservatively estimated that the executive actions on immigration 

would raise the level of GDP by 0.5 percent after 10 years, which 

is equivalent to an additional $100 billion in real GDP in 2024 in 

today’s dollars. It would cut Federal deficits by $30 billion in 10 

years. It would expand the Country’s labor force by 200,000 people 

and raise average wages for U.S.-born workers. 

Without immigration reform, our current immigration laws impose huge fiscal and economic costs. A recent report from the 

American Action Forum, a conservative leaning policy institute 

headed by Douglas Holtz-Eakin, concluded the 20 year cost of apprehending and removing all undocumented immigrants, while securing the borders, would cost taxpayers between $815 billion and 

$1.2 trillion. That is trillion with a T. 

They also found ‘‘The labor force would shrink by 6.4 percent or 

11 million workers and as a result, in 20 years, the U.S. GDP 

would be 5.7 percent or $1.6 trillion lower than it would be without 

fully enforcing current law.’’ This conservative-leaning group’s 

analysis is useful and it is a reminder that all immigration reform 

policies have a price tag attached to them. It is up to us in Congress to appropriately weigh those costs and other factors when we 

are crafting laws. 

I think why you are seeing so many Republicans and Democrats, 

not to mention scores of labor, business and advocacy groups, come 

down on the side of supporting a comprehensive approach to immigration reform, is that it strikes the right balance. 

It secures our borders, it strengthens our economy, it brings millions of undocumented immigrants out of the shadows and into taxpaying individuals, paying their fair share into our health care and 

Social Security systems, which everyone knows could use shoring 

up all the time. 

A comprehensive solution is what we need, something that will 

advance our Country’s values and will honor our history as a Nation of immigrants. 

Again, I thank the Chair and I look forward to our witnesses’ testimony today. 

I yield back. 

Mr. DESANTIS. The gentleman yields back. 

The Chair now recognizes the Chairman of the Benefits Subcommittee, Mr. Jordan, for 5 minutes. 

Mr. JORDAN. I thank the chairman for this hearing and our esteemed witnesses who are here today. 

I will be very brief. 

The title of the hearing is The Fiscal Cost of the President’s executive actions on Immigration. I like to view it as the unfairness of 

the President’s executive actions. 

In this hearing room, as the Chairman pointed out in his opening 

Statement, the colleague to my left, Mr. Mulvaney, asked the IRS 

Commissioner ‘‘Can illegal non-citizens get tax refunds? Can they 
4 

go back the previous 3 years and get those? Yes, they can.’’ How 

is that fair to taxpayers? How is that fair to citizens? 

How is it fair to seniors that illegal non-citizens can participate 

in our Social Security system? Most importantly, how is it fair to 

legal immigrants who did everything the right way but now 

through the President’s Executive Order, illegal, non-citizens move 

to the front of the line and take away resources from people who 

are doing it the right way and did it the right way when they came 

here? 

Also, in this very hearing room, 4 weeks ago, we had two Secretaries of State who came and said because of the President’s action, 

because of the documents illegal, non-citizens are now going to 

have access to, namely Social Security cards, Social Security numbers and a driver’s license. The real potential for 5 million people 

participating in our election process around the Country has increased dramatically, so much so that our Secretary of State sent 

a letter to the White House, a letter to the Ohio delegation and 

came here and testified. 

For all those reasons, the cost and unfairness, those are huge 

concerns and that is why this hearing is appropriate and why I am 

glad the chairman has convened it. I look forward to hearing from 

our witnesses. 

With that, I yield back. 

Mr. DESANTIS. The gentleman yields back. 

I will hold the record open for five legislative days for any member who would like to submit a written Statement. 

We will now recognize our witnesses. I am pleased to welcome: 

Mr. Robert Rector, Senior Research Fellow for Domestic Policy 

Studies, DeVos Center for Religion and Civil Society at The Heritage Foundation; Steven A. Camarota, Ph.D., Director of Research, 

Center for Immigration Studies; Eileen J. O’Connor, Esq., Partner, 

Pillsbury Winthrop Shaw Pittman LLP; and Ms. Avideh 

Moussavian, Economic Justice Policy Attorney at the National Immigration Law Center. Welcome to you all. 

Pursuant to committee rules, all witnesses will be sworn before 

they testify. Please rise and raise your right hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? 

[Witnesses respond in the affirmative.] 

Mr. DESANTIS. In order to allow time for questions, please limit 

your testimony to 5 minutes. Your entire written Statement will be 

made a part of the record. 

Mr. Rector, you are up for 5 minutes. 

WITNESS STATEMENTS 

STATEMENT OF ROBERT RECTOR 

Mr. RECTOR. Thank you, Mr. Chairman. I appreciate the opportunity to speak today. 

I want to talk about the fiscal cost of one part of the amnesty, 

the deferred action, for parents. 

Our estimate is that there are about 3.9 million illegal immigrants who are eligible to gain legal status through this program. 
5 

On average, these individuals have a tenth grade education. I want 

to emphasize that. Many of them have a third and fourth grade 

education. 

I am kind of a strange person. In the last decade or so, I have 

gone around and asked people in the U.S. how many people believe 

that someone with a tenth grade education pays more in taxes than 

they get in government benefits? 

Outside the confines of Congress, I have yet to find a single 

American citizen that believes that is the case. The reality is that 

when you look either at legal immigrants or U.S.-born people, individuals who do not have a high school degree, in general if you look 

at all the government benefits, Federal, State and local, that they 

get and all the taxes they pay, income tax, property tax, cigarette 

tax, lottery payments, all of those things, on average, that individual who does not have a high school degree gets $5 in government benefits for every $1 they pay in taxes. 

The illegal immigrant population in the United States gets about 

$2.50 in total benefits, Federal, State and local, minus taxes for 

every dollar paid, 250 to 1. The reason for that is the illegal immigrants do not have access to our two most expensive programs, Social Security and Medicare, and their access to the 80 different 

means tested anti-poverty programs such as Medicaid and food 

stamps is limited. 

What Obama’s executive action does is essentially removes those 

barriers. The first thing it does is it grants 3.9 million people with 

a tenth grade education a Social Security number which makes 

them eligible for Social Security and Medicare at retirement age. 

They have to work 40 quarters or 10 years but it is a minimal 

work requirement, so most of those individuals, to the extent that 

they apply and receive that amnesty, will, in fact, become eligible 

for Social Security and Medicare. 

The only question would be, how much does that cost? If you assume they, in today’s dollars, get the average Social Security and 

Medicare benefits that go to legal immigrants who are elderly with 

that same level of education, the costs that they are going to be 

getting over $20,000 a year in benefits in retirement in today’s dollars, it will actually be much more than that obviously, the total 

cost of that is $1.3 trillion. 

This is a system that is already completely bankrupt. What the 

President has done is taken nearly 4 million people with a tenth 

grade education and given them benefits into that program. 

It is true that they will pay a small amount in FICA taxes but 

in general, they are going to be getting $3 of benefits for every dollar of FICA taxes they pay. I am going to show that they actually 

really don’t ever make a net payment. 

It is said we need them to pay taxes. This group never makes 

a net payment into the U.S. Treasury. At every stage of their lives, 

they will always be drawing more out in government benefits than 

they pay in. 

How can that be? For example, this household already, because 

they have U.S.-born citizens, gets around $6,500 a year in means 

tested benefits for their kids, food stamps, Medicaid, SCHIP and so 

forth. 
6 

This action gives them access to the ACTC and EITC which are 

the two largest cash welfare programs. That is another $4,000 per 

household per year. On top of that, the action does not give them 

access to ObamaCare but I would ask anyone who supports this, 

do you think we ought to let them stay here for 30 years and never 

give them health care? 

That is not very feasible. If they got ObamaCare, that is around 

another $7,500 a year. That is close to $18,000 a year in benefits 

that they will be getting even before they get into retirement. It 

vastly exceeds the FICA and income taxes that they pay. 

It is an illusion. The way this is ordinarily done, as you talked 

about, they make $5,000 or $6,000 in Social Security or FICA taxes 

and they put in that money, but that does not do the U.S. Treasury 

any good if at the same time they put in $5,000 or $6,000 to the 

Social Security Trust Fund, they draw $20,000 out of general revenue. Is the U.S. Treasury any better for that? Absolutely not. 

The reality is this group, on the Federal level, never makes a net 

contribution. The FICA taxes they pay are more than offset by 

what they draw back. At the State and local level, they are getting 

around $18,000 to $19,000 in free public education. They never 

cover that cost. Other taxpayers have to pay for it. 

When they hit Social Security, then you have this huge loss in 

retirement of around $1.3 trillion. 

Again, the bottom line is you cannot take people with a tenth 

grade education, bring them to the United States, give them access 

to the largest and most expensive entitlement system, the largest 

and most expensive welfare system on the globe, and expect there 

will not be negative fiscal consequences. The fiscal consequences 

are extremely large and run in the trillions of dollars. 

[Prepared Statement of Mr. Rector follows:] 
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Mr. DESANTIS. Thank you. The gentleman’s time has expired. 

The Chair now recognizes Dr. Camarota for 5 minutes. 

STATEMENT OF STEVEN A. CAMAROTA 

Mr. CAMAROTA. I would like to thank both the committee and the 

subcommittee for inviting me here to talk about this very important topic. 

Let me start by stating that there is this general agreement that 

individuals, immigrant or native, legal or illegal, with modest levels of education and resulting lower incomes, are a net fiscal drain, 

paying less in taxes than they use in services. 

In contrast, more educated individuals, immigrant or native, 

earn higher wages and are a net fiscal benefit. This is not just common sense, but it is not even very controversial. 

Prior research by the Center for Immigration Studies, as well as 

the Pew Hispanic Center, indicate that about half of all legal immigrants have not graduated high school and about another quarter 

have only a high school education. 

That gives us an idea and helps us understand what the likely 

educational profile would be of those who receive the President’s 

deferred action. Given the education level of illegal immigrants 

who are likely to receive DAPA, it seems certain that allowing 

them to remain in the Country is costly to taxpayers, whether they 

have legal status or not. 

For example, in 2014, 61 percent of households headed by immigrants who had not graduated high school told the Census Bureau 

in the current population survey that they were using one of the 

Federal welfare programs, cash and non-cash. 

Again, these figures are just what they told the Census Bureau. 

There is actually under reporting. The actual rates are higher. 

Given the education level of immigrants likely to get DAPA, the 

total fiscal cost, all taxes paid minus all services used at all levels 

of government is probably something like $30 billion negative, if 

you take into account all their taxes and use of services. 

What would happen if we legalized them? If everyone who is eligible for DAPA comes forward and everyone pays all the taxes they 

should, these are big assumptions but if you just reduce it, cut 

these by 10 to 20 percent, whatever you think the compliance will 

be, the point is if everyone gets what they are entitled to and pays 

all the taxes they are supposed to, then it looks like they would pay 

about $8 billion more in taxes and you get about $9 billion more 

at the Federal level from just the earned income tax credit and the 

additional child tax credit. Those are the two main programs for 

low income workers of this kind. 

In short, amnesty will not increase both tax revenue and cost but 

this is a reminder that you cannot generate net income for public 

coffers from less educated, low income people. Having said that, it 

must be remembered that most immigrants come to America to 

work. Most immigrants, in fact, do work and even most illegal immigrants pay taxes, but less educated immigrants, as a group, do 

not pay anywhere near enough in taxes to cover their consumption 

of public services regardless of legal status. 
21 

Let me also say that the net fiscal drain that less educated immigrants create and less educated natives, for that matter, we should 

not see this as some kind of moral failing on their part. 

Instead, we should see this fiscal drain as simply reflecting the 

nature of the modern American economy that offers limited opportunities to the less educated and the existence of a well developed 

welfare State which provides assistance to low income workers. 

This last point is important. Welfare and work in America go together like love and marriage. The vast majority of households reporting they are using the welfare system, particularly the noncash programs, have a worker in them. That describes a lot of immigrant households, particularly the ones that would get DAPA. 

The existence of a welfare State remember is one of the very reasons we have an immigration system in the first place that admits 

some people but not others because we are trying to very much 

avoid the fiscal costs. 

Granting amnesty like DAPA to those in the Country illegally 

and letting them stay negates one of the very reasons we have a 

legal immigration system that selects people. 

Of course the fiscal costs, let me say in conclusion, are only one 

consideration. There are many others to think about. If we do move 

forward some kind of amnesty, if the judge lifts his order or what 

have you and people continue to advocate for it, we have to be honest with the American people and acknowledge the very real costs 

that come from allowing illegal immigrants to stay in the Country 

and not try to bamboozle them with the idea that this is going to 

be a fiscal benefit. 

Thank you. 

[Prepared Statement of Mr. Camarota follows:] 
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Mr. DESANTIS. I thank the gentleman. 

The Chair now recognizes Ms. O’Connor, for 5 minutes. 

STATEMENT OF EILEEN J. O’CONNOR 

Ms. O’CONNOR. Mr. Chairman, Ranking Member and members of 

the subcommittees, thank you very much for inviting me to be with 

you today. 

I speak on my own behalf as a private citizen and not on behalf 

of my firm or my partners or its clients. I hope to bring to you some 

of the understanding I have gained through many decades of working with the Internal Revenue laws both inside and outside of government. 

You have called this hearing to examine the fiscal costs of the 

President’s executive actions on immigration. I will address the 

likely consequences of those programs to Federal tax administration and enforcement. 

The Internal Revenue Service is charged with administering and 

enforcing the internal revenue laws. When enforcing the tax laws 

requires the involvement of a court other than the Tax Court, the 

United States’ interests are represented by the men and women of 

the United States Justice Department Tax Division. 

It was my privilege for 6 years to be the head of the Tax Division 

and that is the basis of some of my experience that I will relate 

to you today. 

As required by the Inspector General, Act, the Department of the 

Treasury has an Office of the Inspector General. It was established 

in 1989. In accordance with the Internal Revenue Service Reform 

and Restructuring Act of 1998, a new Inspector General was established, the Treasury Inspector General for Tax Administration, 

often called TIGTA. 

The Treasury Inspector General for Tax Administration, TIGTA, 

has studied the issue of refundable credits for many years and 

issued many reports. In my testimony, I summarize many of those 

reports for you. 

To understand the phenomena that we are talking about, the impact of DACA and DAPA, are under tax administration and enforcement, we need to understand two phenomena: ITINs, Individual Tax Identification Numbers, and refundable credits. 

In 1996, the Internal Revenue Service established individual tax 

identification numbers so that it could track the tax payments and 

tax returns of people who don’t have Social Security numbers because they are not Americans. 

Many people outside the United States, for example, might have 

rental property in the United States. If you do, you are taxed on 

that income but you don’t have a Social Security number because 

you are not a United States citizen. You, nonetheless, have to pay 

tax. 

To track those taxes and tax returns, the IRS established the individual tax identification number. 

It also almost immediately began giving those numbers to people 

who are in the Country illegally, working, earning income but not 

able to get a Social Security number because they were in the 

Country illegally and not authorized to work, but they were work-
33 

ing and they were earning income so they were obligated by law 

to file a tax return. 

The Internal Revenue Service does not consider its obligation to 

determine the legal immigration status of people who file tax returns. The IRS was happy to have the tax returns that are filed 

by people in the Country illegally and to have their tax payments. 

For 1997, one of the first years the IRS issued ITINs, 180,000 tax 

returns were filed using them. By the end of 2003, that number 

had blossomed to 7 million. 

Let me discuss for a moment refundable credits. Refundable 

credits are neither refunds nor credits. A refund is an amount you 

get back after you have paid it. A credit is an amount that is credited to your account because you have paid it. A refundable credit 

is neither. 

A refundable credit eliminates the Social Security taxes that people have paid. Low income people are relieved of many income tax 

burdens because the first x amount of dollars is not taxable and 

then after that, they are taxed at a very low rate. 

The Social Security system does not work that way. Social security taxes have to be paid. The earned income tax credit is a way 

to refund to people who have paid the Social Security tax, refund 

that tax to them. 

The additional child tax credit is another refundable credit. 

Again, this is an amount which represents an amount that the 

Treasury Department is going to write checks for even though the 

person to whom they are writing the check has not actually paid 

any tax at all. 

You can have a tax liability before one of these credits of $400, 

have paid in nothing, have a refundable credit of $1,000 and Uncle 

Sam will write you a check for $600. 

This is equally true of earned income tax credits and the additional child tax credit. For years and years, the Treasury Department Inspector General for Tax Administration has been warning 

the Internal Revenue Service that these refundable credit systems 

are absolutely fraught with fraud. Hundreds of billions of dollars 

are paid out annually on fraudulent refund claims. 

The Treasury Inspector General also pointed out to Senator Roth 

back in the 1990’s that the earned income tax credit was being 

given to people who were not eligible to be working in the United 

States. Congress then changed the law to make a Social Security 

number a requirement for the earned income tax credit. 

That same requirement was not extended to the additional child 

tax credit, so contrary to what my colleague on the right said a few 

moments ago, additional child tax credits, the refundable credit, 

are paid out to people who do not have Social Security numbers 

who are in the Country and working in the Country illegally. 

[Prepared Statement of Ms. O’Connor follows:] 
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Mr. DESANTIS. We have your written testimony. I see your time 

has expired, so thank you for that. 

The Chair now recognizes Ms. Moussavian for 5 minutes. 

STATEMENT OF AVIDEH MOUSSAVIAN 

Ms. MOUSSAVIAN. Thank you. 

Good afternoon, Chairman DeSantis and Chairman Jordan, 

Ranking Members Lynch and Cartwright, and members of the subcommittees. Thank you for the opportunity to appear before the 

subcommittees today. 

My name is Avideh Moussavian. I am an Economic Justice Policy 

Attorney at the National Immigration Law Center, an organization 

dedicated to ensuring that all Americans, regardless of how much 

money they have or where they were born, have the tools they need 

to achieve their full human potential. 

I am also the daughter of Iranian immigrants who are proud to 

have raised four American children and to call this Country their 

home. 

Last November, President Obama announced policy changes that 

will allow parents of Americans and people who came here in their 

childhood to apply for temporary relief from deportation and work 

authorization. 

The application process, which includes a $465 fee and an extensive criminal background check, would allow immigrants with deep 

ties to this Country to contribute more fully to our economy and 

to our communities. 

These initiatives are an important first step toward fixing parts 

of our broken immigration system. The economic benefits of these 

initiatives are profound. 

Deferred action for parents of American, DAPA, and expanded 

deferred action for childhood arrivals, DACA, will provide a natural 

economic stimulus for everyone. Both the Congressional Budget Office and the Joint Committee on Taxation estimate that DAPA and 

expanded DACA recipients would generate $18.9 billion in revenues in the next 10 years. 

Conversely, they estimated that not implementing these policies 

would severely harm the Federal budget and increase the Federal 

deficit by over $6.3 billion in that same 10 year period. Beyond 

payroll and income taxes, the Council of Economic Advisors estimates that the November 2014 deferred action initiatives will collectively increase our Nation’s gross domestic product in the next 

10 years by $90-$210 billion. 

Although immigrants who qualify for DAPA and expanded DACA 

pay taxes, they are nevertheless excluded from many economic supports. They are unable to purchase health insurance, even at full 

cost, in State or federally run health exchanges as acknowledged 

by my co-panelist. They are also excluded from programs such as 

temporary assistance for needy families, SNAP and Federal Medicaid, among others. 

As taxpayers, however, those with a Social Security number are 

subject to the same rights and responsibilities as every other taxpayer and for good reason. Our tax structure should encourage and 

facilitate all workers, regardless of their immigration status, to 

submit their taxes in a timely fashion. 
42 

It is a longstanding Federal tax principle that the same rules 

apply to all taxpayers who are working lawfully in the United 

States. This includes access to certain earned economic support like 

the earned income tax credit. 

While we may disagree on the President’s executive actions, we 

need to protect the integrity of our tax system. 

The impact that DAPA and expanded DACA will have on all of 

our communities extends beyond dollars and cents. Once DAPA 

and expanded DACA begin to take effect, millions of aspiring 

Americans redouble their investment in this Country. These actions will make our communities safer, more prosperous and better 

integrated in ways that simply cannot be calculated. 

Once implemented, these immigration initiatives will have a life 

changing impact on the parents and young immigrants eligible to 

apply. A good example is Maria from Orange County, California. 

Maria is the proud mother of five children, including a son and 

a daughter who are U.S. citizens and one child who is a recipient 

of DACA and attending college today. She came to the United 

States 19 years ago to escape domestic violence and poverty in 

Mexico. She supports her family as a waitress. 

DAPA would allow Maria and her family members, who are undocumented, to apply for deferred action and work permits. It 

would also allow them to be paid fair wages and contribute as taxpayers, while striving for greater educational and job opportunities 

to reach their full potential. 

Maria and her family, including a nephew who is a U.S. military 

veteran, are proud Americans. They are just one example of why 

the deferred action initiatives are an important opportunity for our 

Nation to make a smart, long term investment in our shared economic prosperity. 

I thank you for the opportunity to testify before you today. I look 

forward to answering any questions you may have. 

[Prepared Statement of Ms. Moussavian follows:] 
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51 
52 
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54 
55 
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Mr. DESANTIS. Thank you. 

The Chair now recognizes himself for 5 minutes. 

Mr. Rector, is it your understanding that an illegal immigrant 

who is amnestied by the President’s executive actions will be able 

to file retroactive tax returns for 3 years? 

Mr. RECTOR. That is correct. 

Mr. DESANTIS. They would be able to claim the earned income 

tax credit, the additional child tax credit for work they performed 

that was illegal when they performed it? 

Mr. RECTOR. Yes, although they don’t even really have to do that 

because in order to get those two credits, all they have to do is assert they performed the work. The IRS does not actually check that 

and if you look at the IRS’ own documents, they show that 25 percent of all EITC payments, close to $20 billion a year, are fraudulent on the basis of people claiming they did certain work they 

probably never performed at all. 

All they would have to do is assert that they performed certain 

amounts of work and they would be able to get the refundable 

EITC and ACTC. I calculate if they did it without a lot of fraud, 

it would still cost around $20 billion retroactively. 

Mr. DESANTIS. Ms. O’Connor, apart from the executive actions on 

illegal immigration, the IRS does pay out a substantial amount in 

fraudulent refundable credits generally, correct? 

Ms. O’CONNOR. Right, the program is fraught with fraud. 

Mr. DESANTIS. Of all the programs, I think this has to be one 

of the highest fraud rates across the entire Federal Government. In 

2011, TIGTA recommended the IRS require additional documentation to support claims of child tax credits in particular. Did the IRS 

implement that recommendation? 

Ms. O’CONNOR. No, the IRS says that it is not authorized to ask 

for documentation during the return processing period, that it is 

only if they select a return for examination that they can ask for 

documentation justifying the credit. 

Mr. DESANTIS. Has the IRS taken any steps to reduce the 

amount of fraud in refundable tax credits? 

Ms. O’CONNOR. As I mentioned in my testimony, every year the 

Treasury Inspector General for Tax Administration gives the Internal Revenue Service a number of recommendations. The IRS does 

follow many of them but the rate of fraud continues to increase. It 

went up 23 percent from 2013 to 2014, as a matter of fact, according to a GAO report issued just yesterday. 

Mr. DESANTIS. Do you know how much refundable credit fraud 

can be traced to individuals who are not authorized to work but 

nevertheless are working in the United States? 

Ms. O’CONNOR. I do not. 

Mr. DESANTIS. Do you, Dr. Camarota? 

Dr. CAMAROTA. Yes. In 2011, the Inspector General said $4.3 billion for the ACTC went out to people who were not authorized to 

work in the United States. They know that from auditing the 

records of people getting that money without Social Security numbers but did use an ITIN. That is how they know it. 

Mr. DESANTIS. What would be the easiest way for Congress to 

address this? If we said these refundable tax credits are on the 
57 

books but we want them to go to people who are legally working, 

what would we need to do to reduce the fraud? 

Mr. CAMAROTA. Require documentation for both the income and 

require valid Social Security numbers. It would be a common sense 

step and not keep paying them out. 

Ms. O’CONNOR. And require the Internal Revenue Service to 

verify the eligibility for the credit before they pay them out. That 

is the problem. They pay them out first without checking. 

Ms. MOUSSAVIAN. If I may add, the TIGTA report my colleague 

on the panel quoted was from 2011. Since then, the IRS has implemented very rigid changes to the individual taxpayer identification 

number program, the ITIN Program. It has resulted in a drastic reduction in the number of ITINs that are issued. 

In fact, those figures do not reflect the IRS initiative to address 

alleged allegations of fraud within the Child Tax Credit Program. 

Mr. DESANTIS. What is the basis of that? Is that your understanding, that they have reduced the fraud by a lot? 

Ms. O’CONNOR. No, not at all. Remember that it is not fraud for 

someone in the Country illegally to get the additional child tax 

credit. Congress has never made it clear, notwithstanding IRS’ 

published position that you don’t have to have a Social Security 

number to get the additional child tax credit. Congress should 

make that clear if that is its intention. 

Further, the GAO report issued yesterday says that IRS issued 

$17.7 billion in improper payments of the earned income tax credit 

just last year. That is a 23 percent increase over the year before. 

Mr. DESANTIS. That is a staggering amount of fraud. 

This could be for Dr. Camarota or Mr. Rector. Does the President’s November 2014 executive actions include a requirement that 

any candidate for ‘‘deferred action’’ have never filed for nor received 

nor been party to tax or other Federal benefits for which he or she 

was not entitled at the time? 

Mr. RECTOR. No, it does not require that. I would say on behalf 

of the earned income tax credit, we know there is a lot of fraud in 

that program because it is very rigorously audited. If you were to 

go over to the Food Stamp Program, there is a fraud rate of at least 

10 percent over there that you never hear about because they do 

not audit it as well. If you wanted to see real fraud, go to public 

housing. 

There is a massive amount of cases where individuals claim or 

hide income and in the case of the EITC, claiming income they 

don’t actually have in order to gain the benefit, or in the case of 

these other programs, working off the books and hiding the income 

in order to get benefits. It is rife within the entire welfare system, 

not just the EITC. 

Mr. DESANTIS. Thank you. My time has expired. 

The Chair will now recognize Mr. Lynch for 5 minutes. 

Mr. LYNCH. Mr. Chairman, Mr. Cartwright has a scheduling 

problem so I would like to yield my time to him and then I will 

take his time later. 

Mr. DESANTIS. Very well. 

Mr. CARTWRIGHT. Thank you, Mr. Lynch and thank you, Mr. 

Chairman. 
58 

From Mr. Rector’s testimony today, we have head many absolutely stunning numbers on the fiscal costs of the Administration’s 

deferred action programs. For example, Mr. Rector’s written testimony States, ‘‘Increase in the ITC and ACTC cash payments to 

DAPA recipients would be $7.8 billion per year.’’ 

This figure is more than ten times the estimate by the non-partisan, not Democrat, not Republican, Congressional Budget Office 

earlier this year. With all due respect, this is not the first time immigration cost analyses from The Heritage Foundation have come 

under scrutiny. 

For example, a May 2013 immigration report by Mr. Rector was 

sharply criticized by the Cato Institute. They said in that study, 

‘‘Its flawed methodology and lack of relevancy to the current immigration reform proposal relegate this study to irrelevancy.’’ 

Mr. Rector, my question is, were you aware of this criticism by 

the Cato Institute at that time? 

Mr. RECTOR. Yes, I am aware of the criticism. 

Mr. CARTWRIGHT. Why did you choose to ignore any potential 

economic benefit that would come from introducing these people to 

our work force? 

Mr. RECTOR. Would you like me to answer that? 

Mr. CARTWRIGHT. Sure. 

Mr. RECTOR. The EITC numbers that I have come directly from 

the census. The census, when we talk about illegal immigrants, 

most of them are inside the census. The census takes the family’s 

income and their demography and imputes a value for the earned 

income tax credit. 

The number I gave there, roughly $7 billion, simply takes the illegal immigrant population that is subject to DAPA and takes the 

census number and adds it together. 

Mr. CARTWRIGHT. That is relegated to irrelevancy by the Cato Institute and more than ten times the estimates by the non-partisan 

CBO. We need to talk about this later but I only have 5 minutes 

and I want to shift over to Ms. O’Connor, Mr. Rector. 

Ms. O’Connor, my impression from your written testimony was 

that in large part it is a reStatement of TIGTA reports. Would that 

be a fair Statement? 

Ms. O’CONNOR. That is correct. 

Mr. CARTWRIGHT. TIGTA is the Treasury Inspector General for 

Tax Administration, right? 

Ms. O’CONNOR. Right. 

Mr. CARTWRIGHT. What you have done is you have taken the 

points from a number of TIGTA reports on this whole question, 

right? 

Ms. O’CONNOR. Right. 

Mr. CARTWRIGHT. Since November 2004, the man’s name has 

been J. Russell George, am I correct in that? 

Ms. O’CONNOR. You are correct. 

Mr. CARTWRIGHT. That is the TIGTA that we are talking about, 

right? 

Ms. O’CONNOR. Yes. 

Mr. CARTWRIGHT. I invite your attention to page four of your 

written testimony, the first report there is a 2009 Inspector Gen-
59 

eral report. When you say Inspector General, you are talking about 

TIGTA in your report, right? 

Ms. O’CONNOR. That is right. 

Mr. CARTWRIGHT. My question is, why didn’t you mention J. Russell George’s name when you talked about that 2009 TIGTA report? 

It is not in there, is it? 

Ms. O’CONNOR. I did not mention him by name because what is 

important is the office. The first TIGTA report I mentioned was before Mr. George took office. 

Mr. CARTWRIGHT. You mentioned another 2009 report from 

TIGTA on the same page. You did not mention J. Russell George’s 

name there either, did you? 

Ms. O’CONNOR. Why would I? 

Mr. CARTWRIGHT. Then on page five, you mentioned the Inspector General report from 2011, a third report from TIGTA, and you 

do not mention J. Russell George’s name in that one either, am I 

correct in that? 

Ms. O’CONNOR. What you are missing is that I am referring to 

reports that are prepared by the Office of the Treasury Inspector 

General for Tax Administration. 

Mr. CARTWRIGHT. On page six, you mentioned a fourth report 

from TIGTA and you also mentioned a 2013 report from the Inspector General, I am asking you simply yes or no questions and I am 

entitled to a response. 

Ms. O’CONNOR. No, you are not. 

Mr. CARTWRIGHT. The fourth report on page six refers to a 2013 

IG report, also from TIGTA, and you do not mention Mr. Russell 

George’s name in that report. 

Ms. O’CONNOR. And I did not mention the name of the TIGTA 

in the first TIGTA report before Mr. George took office. 

Mr. CARTWRIGHT. On page six, the fifth report, last year in 2014, 

Inspector General mentions another set of findings and you did not 

mention J. Russell George’s name in that fifth report either, did 

you? 

Ms. O’CONNOR. And your point is? 

Mr. CARTWRIGHT. Are you aware, Ms. O’Connor, that Representative Gerry Connolly from Virginia and I have called for an ethics 

complaint against J. Russell George for his handling of other matters because of his lack of non-partisanship? Are you aware of that, 

Ms. O’Connor? 

Ms. O’CONNOR. No. 

Mr. CARTWRIGHT. I yield back, Mr. Chairman. 

Mr. DESANTIS. The gentleman yields back. 

The Chair now recognizes the Chairman of the Benefits Subcommittee, Mr. Jordan, for 5 minutes. 

Mr. JORDAN. I apologize, Mr. Chairman. 

Let me go with a couple numbers. First of all, Mr. Rector, would 

you characterize Cato as non-partisan when it comes to the immigration issue? 

Mr. RECTOR. The Cato Institute is an open borders libertarian institution. It believes in no restrictions on immigration whatsoever 

and everything they have to say on this policy flows from that. 

Mr. JORDAN. A slightly different position than Heritage takes? 

Mr. RECTOR. A little bit. 
60 

Mr. JORDAN. I like the Cato Institute, I think they do some great 

work, but on this particular issue, I am not where they are. To cite 

them as the end all, be all definitive Statement on numbers Heritage has on immigration policy, I do not think makes sense. 

Mr. JORDAN. Ms. O’Connor, you mentioned 7 million people with 

the tax identification number in your testimony. Tell me what that 

number is again because there is a dramatic increase from when 

the tax ID number was first put in place, I believe you said in the 

mid–1990’s, to where it is today? Will you elaborate on that, 

please? 

Ms. O’CONNOR. The 7 million number is a couple years old already. The Internal Revenue Service says it issues about 2.5 million additional ITINs every year. 

Mr. JORDAN. The 7 million was from what year? 

Ms. O’CONNOR. I think that was 2009. 

Mr. JORDAN. It is significantly higher today? 

Ms. O’CONNOR. Right. 

Mr. JORDAN. The 5 million who are part of the President’s latest, 

would they be reflected in the most current number, whatever that 

number is, or is that going to be 5 million additional added to that 

number? 

Ms. O’CONNOR. That is a good question since we know that many 

people who are in the Country illegally are already paying taxes 

and they use ITINs to do so. I would not imagine that the President’s action is going to increase the number of ITINs that much 

more than it increases every year anyway. 

Mr. JORDAN. Mr. Camarota, you mentioned a $4.3 billion number 

from a 2011 study. Tell me about that again? 

Mr. CAMAROTA. The Inspector General went through and looked 

at all the people in the United States who were working and filed 

an income tax return using an ITIN and gave them $4.3 billion. 

The Inspector General report is very clear that basically all these 

individuals are illegal immigrants getting the ACTC, the cash portion of the additional child tax credit. That is, they did not pay any 

Federal income tax and they gave them $4.3 billion instead. 

Mr. JORDAN. I am not sure if the Chairman asked this question 

in his time but based on what the President did in November, the 

additional $5 billion, this sort of relates to the previous question 

I asked Ms. O’Connor, what do you anticipate that number is going 

to do? Is going to go up significantly? What is going to happen? 

Mr. CAMAROTA. We would certainly expect that now that they 

have valid socials, more of them would actually work on the books. 

We think right now only about 55 percent of illegal immigrants 

work on the books but presumably that number would increase 

with legalization and valid Social Security numbers. 

The number of people getting the EITC or the ACTC, which we 

have been discussing here, would grow proportionately, depending 

on how many people come forward. Obviously if it is a lot of folks, 

it will run into the billions. 

Mr. JORDAN. You cited the Inspector General. Mr. Cartwright 

made a big deal of the Inspector General in his previous time. In 

your estimation, the reports and numbers you received from the Inspector General, are they in any way not accurate, is there some 
61 

doubt as to the validity of the reports and numbers the Inspector 

General has brought forward? 

Mr. CAMAROTA. No, these are pretty straightforward. How many 

people are filing income tax returns. 

Mr. JORDAN. It does not matter if it is Inspector Russell George 

or Santa Claus, right, as long as the numbers add up, it adds up, 

right? 

Mr. CAMAROTA. I have no reason to doubt them. 

Mr. JORDAN. The Democrats like to make a big deal on Mr. 

George, but the fact is when Mr. George discovered that targeting 

was taking place, he gave a heads up to the Treasury Department, 

he gave a heads up to the IRS, clear back before the Presidential 

election. He gave a heads up to everyone else. 

He did not give us a heads up. I would like for him to have told 

Congress that the IRS was using the terms tea party and patriot 

to identify groups and put them in this category where they never 

got their tax exempt status. 

They would like to make a big deal that they have filed some 

ethics charges against him but the truth is, Mr. George, if anyone 

has a complaint with Mr. George, it should be the Republicans because he told the White House Administration information before 

he ever told us, in fact, 6 months before. 

This whole idea that somehow these numbers are not valid or not 

accurate makes no sense to me. We can make a big deal of it if we 

want but the fact is, they targeted conservative groups. Now they 

are just giving us accurate numbers, simple mathematics, right? 

Mr. CAMAROTA. To my knowledge. 

Mr. JORDAN. Simple math and you guys are bringing information 

forward. For that, we thank you and I yield. 

Ms. MOUSSAVIAN. Congressman, if I may add, the same TIGTA 

report—— 

Mr. DESANTIS. The gentleman’s time has expired. 

The Chair asks unanimous consent to enter into the record the 

GAO report published this Monday, March 16, about improper payments for the whole government but it does include the information 

on earned income tax credits. 

Without objection, so ordered. 

Mr. DESANTIS. The Chair now recognizes a proud Bostonian on 

St. Patrick’s Day, Mr. Lynch, for 5 minutes. 

Mr. LYNCH. Thank you, Mr. Chairman. 

That is part of the reason why I arrived a bit late. We have the 

Taoiseach of Ireland in today. Maybe it is an Irish trait, but he 

spoke a bit long, so I arrived a little bit late. 

I want to thank all of the witnesses. You all have been helpful. 

While you are not in agreement, I would hope that our immigration 

policy would be data driven to some extent. The ideas that you 

have shared are certainly very helpful. 

I think the answer to this is to structure an immigration policy 

and immigration laws that maximize the longer term general benefits to our economy and to our Country while at the same time trying to mitigate and eliminate possibly some of the short term costs 

that you are describing which are more local in many respects. 

The President, with all due respect, has not had that opportunity. DAPA is a very blunt instrument as it does not allow us to, 
62 

as I said before, maximize the positive and mitigate the negative. 

It is a rather crude instrument. It is not of his choosing. 

I think the President has said on many occasions that he would 

prefer to have a comprehensive, well thought out, well structured, 

thoroughly debated, data driven immigration law introduced rather 

than using this more crude mechanism, but this is what he is left 

with. That is what the President has said on countless occasions. 

There are some longer term general benefits. I know that one of 

my issues is Social Security. The birth rate in the United States 

is not sufficient. We do not have a sufficient what they call replacement rate because new workers are not coming into the economy, 

the birth rate is so low and that fewer number of citizens will eventually carry a tremendous burden for the pensions, Social Security 

obligations and tax burden for a much larger, earlier generation. 

Immigration could help that if it were structured in a positive 

way which would address that gap. 

Ms. Moussavian, you have been very, very kind to appear before 

us and I want to ask you about the earned income tax credit and 

the Work Pays Initiative. 

At the time of the program’s expansion, Senator Chuck Grassley 

took to the Senate floor to support the earned income tax credit 

stating, ‘‘It is important to bear in mind the billions of dollars that 

have been provided in this bill to encourage struggling families to 

enter the work force or expand the number of hours they work. Too 

often, we focus on the welfare specific provisions and completely 

forget or ignore the major efforts to encourage work that are contained in the Tax Code.’’ 

Ms. Moussavian, I would like to know, is that your understanding of that provision? Is that how it works? 

Ms. MOUSSAVIAN. The earned income tax credit is a long standing tax program that is meant to incentivize work and recognize 

that work should be acknowledged, particularly for low income 

families struggling to support their children and families. 

Mr. LYNCH. In general, would you agree that the families who receive the EITC increase the number of hours they work? Is that 

how this works? 

Ms. MOUSSAVIAN. The earned income tax credit is only for people 

who are working and who are paying taxes. In that sense, it was 

intended specifically as an alternative to public safety net programs and means tested public benefits. It is entirely different in 

nature. 

It rewards work. It rewards particularly work performed by low 

income families. Over 74 percent of recipients of the earned income 

tax credit make less than $25,000 a year. In that sense, these are 

vital economic supports that are viewed as essentially an economic 

stimulus for the local communities that money gets reinjected back 

into. 

Mr. LYNCH. For that strata, that classification of low income and 

middle income families, do you believe the EITC original purpose 

is served by continuing to encourage them to work? 

Ms. MOUSSAVIAN. That is correct. 

Mr. LYNCH. We got into child tax credits. Senator Grassley also 

Stated, ‘‘This is a tax credit that particularly helps low and middle 

income families who pay for child care for the young children.’’ 
63 

Ms. Moussavian, do you agree with Senator Grassley that the tax 

credit does help with that, when affording child care for their 

young children is considered? 

Ms. MOUSSAVIAN. Yes, both the ATC and the CTC by design are 

anti-poverty programs. They have been enormously effective in lifting millions of low income families, working, tax-paying, low income families out of poverty. 

They provide essential economic support for families so that they 

do not have to make difficult choices about do I put food on the 

table for my young child, do I pay the utility bill or do I pay the 

rent. 

It allows those families to invest, again, these are parents of 

largely U.S. citizen children. Proposing any threats to change access to these important anti-poverty programs, we are hurting U.S. 

citizen kids. 

I would just add, and I apologize if I interrupted my co-panelist 

before, but I wanted to also correct. These are taxpayers and the 

ITIN program that is available to non-citizens, both unauthorized 

immigrants as well as those with status who are lawfully present. 

They make tax contributions. In fact, the same TIGTA Inspector 

General we have been citing, his 2011 report specifically said that 

in the tax year 2010, ITIN holders contributed $897 million in tax 

revenue. 

Yes, there are some ITIN holders or some immigrants who are 

receiving this tax credit, but again, to your point, it goes to provide 

those families with really vital economic support. 

Mr. LYNCH. Thank you very much. 

Thank you, Mr. Chairman, for your indulgence. I realize I went 

over. I yield back the balance of my time. 

Mr. DESANTIS. The gentleman yields back. 

The Chair now recognizes the gentleman from South Carolina, 

Mr. Mulvaney, for 5 minutes. 

Mr. MULVANEY. Thank you, Mr. Chairman. Happy St. Patrick’s 

Day to everyone. 

Thank you, Ms. O’Connor, from Mr. Mulvaney, for wearing your 

green today. 

I am sitting here talking to my friend, Mr. Jordan, trying to figure out what to talk about. 

Mr. Rector, every time I listen to you, and I have before, and you 

and I have talked about this before, the thing that stick in my craw 

is every time I listen to you, I get the feeling that you think all 

immigration is bad. 

I know that is not the message you want to convey but that is 

the message you convey, is that immigrants are bad. I have to disagree with that fundamentally. 

At the same time, Ms, Moussavian, I look at what the President 

did and I think that does not work either. What Mr. Rector wants 

to do, which is keep everybody out, does not work and what you 

are defending, what the President did, which was with the stroke 

of a pen, violate the law and give bunches of benefits to people costing billions of dollars, is also wrong. 

Instead of sitting here and trying to figure out who is right because I think neither of you is right, help me be more positive 

today on St. Patrick’s Day. Tell me what a functioning and healthy, 
64 

legal immigration system looks like. Mr. Rector, I will start with 

you and keep your answer fairly short because I want to hear from 

everyone on this. I do not want to eat up all my time. 

Mr. RECTOR. I think it has been very clear over the last decade 

or so that when you look at the fiscal consequences of immigration, 

immigrants who have a college degree pay far more in taxes. 

Mr. MULVANEY. I hear you, Mr. Rector. Again, I am not going to 

go into the details of it but I recognize the fact that the welfare 

system and the welfare State is different now than it was when my 

great grandparents came over but we did not build the Country on 

college graduates. That is just not how it worked. 

When my great grandparents came over, there were farmers who 

came because they were literally starving to death. They were not 

college graduates. They were not doctors and lawyers. They came 

over and that is how we built the Country. I do not want to get 

into it today. 

Give me one idea on how we provide for a healthy, legal immigration system going forward. 

Mr. RECTOR. Bring in people who are net taxpayers and will not 

impose additional cost on the already extraordinarily overburdened 

U.S. taxpayer. 

Mr. MULVANEY. Mr. Rector, we could do it different from that. 

Again, when my ancestors came over, we did not have much of a 

welfare State at the time. We had a little bit. They were required, 

if I know my history right, to have a sponsor who effectively posted 

a bond for them and said, Ms. O’Connor is coming over, she is my 

responsibility, she is my ward and I am guaranteeing that she will 

not be on any Federal programs for the next 15 or 20 years. That 

is the history, give or take, right? 

Ms. O’Connor, am I right about that? 

Ms. O’CONNOR. I believe so. 

Mr. MULVANEY. We could do that again now, couldn’t we? We 

could allow folks to come over and they would not be a net tax loss? 

Mr. RECTOR. Those principles are still in effect. It is still in the 

law. I have been doing this for 40 years. I have yet to see a single 

individual who has redeemed that bond because these families go 

on welfare. I understand what you just said. It is in law. It is 

never, ever enforced. 

Mr. MULVANEY. If we could look at something we could agree on, 

enforcing the current immigration law might do great steps toward 

improving things? 

Mr. RECTOR. Again, you have to simply acknowledge that if you 

bring in people that have very low education levels, there is a fiscal 

cost. If you want to do that, I am just going to tell you what the 

fiscal cost is. 

Mr. MULVANEY. Ms. O’Connor, do you want to check in on this? 

Give me some ideas on how to fix the legal immigration system in 

the Country? 

Ms. O’CONNOR. Enforce it. 

Mr. MULVANEY. That is fair. You think the laws we have now are 

adequate? 

Ms. O’CONNOR. I have not studied immigration law to a large extent. I am, however, a first generation American, so I have some 

personal experience with immigration and naturalization. 
65 

The problem I see from a tax perspective is what is being called 

amnesty bonuses. We have open borders and a welfare system. 

That relinquishes our sovereignty. That is wrong. 

Mr. MULVANEY. I agree. I think that is the difficulty, Ms. 

Moussavian, with what the President has just done. He has created 

a financial bonus for having come here illegally. That is what 

strikes so many of us, even those of us who are for reforming the 

legal immigration system, as being unfair. 

We are looking at folks and saying, if you came here legally, you 

do not get the 3-years backward looking earned income tax credit. 

There is an incentive to have come here illegally and that is simply 

not fair. 

Ms. O’CONNOR. Immediately repeal all refundable credits and 

take the Internal Revenue Service out of the business of welfare 

program administration. 

Mr. MULVANEY. Ms. Moussavian, I have about 20 seconds. Give 

me an idea on how to fix legal immigration? 

Ms. MOUSSAVIAN. First, I would say people who are eligible for 

DAPA and DACA are not going to be eligible for any of the Federal 

public benefits programs we are talking about. In fact, any of you 

who have met with any of our staff have seen this chart that really 

highlights all the barriers to access to programs. 

Mr. MULVANEY. I am sorry to go over my time but I am misunderstanding you because I had Mr. Koskinen in here and I asked 

him myself if some were qualified for the President’s amnesty from 

November. 

Ms. MOUSSAVIAN. The tax credit programs are not Federal public 

benefits. They are for people who are taxpayers and workers. These 

are people who are paying without any type of work authorization. 

They are contributing $13 billion. 

Mr. MULVANEY. You are consolidating. I am giving you one example of someone who is here, came here illegally, might have 

worked or not, and the President is now going to give them a Social 

Security number and they can claim 3 years of back to the EITC. 

Ms. MOUSSAVIAN. This look back provision we are talking about, 

claiming past years, it is not exclusive to the EITC, it is not exclusive to people who would be getting Social Security numbers 

through DAPA or DACA. 

Mr. DESANTIS. The gentleman’s time has expired. 

Votes have been called. We definitely have time to recognize Mr. 

Lieu and I think at that point, we will stand in recess. I do think 

this is likely to be a lengthy vote series. To the witnesses, if we are 

in recess or an hour, how is your schedule? Would you be able to 

reconvene at that time? That will be the plan. 

The Chair now recognizes the gentleman from California for 5 

minutes. 

Mr. LIEU. Thank you, Mr. Chair. 

We heard some numbers from The Heritage Foundation. There 

are other institutions that have also done economic analyses and 

I would like to put those in the record. 

Last month, the Council of Economic Advisors released its latest 

economic analysis of the executive actions. My question will be for 

Ms. Moussavian. 
66 

It is true, is it not, they estimated these actions would raise 

America’s GDP level between $100-$250 billion over the next 10 

years? 

Ms. MOUSSAVIAN. Yes, that is correct. I believe the estimates are 

between $90 billion and $210 billion, according to that study. 

Mr. LIEU. It would also reduce the Federal deficit by $30 billion 

over the next 10 years? 

Ms. MOUSSAVIAN. That is correct. 

Mr. LIEU. Let us look at it another way which is, if we were to 

eliminate these actions, we also had some analysis on that. In January, the Congressional Budget Office and the Joint Committee on 

Taxation made some estimates of what would happen if we eliminated the deferred action for parental accountability and the deferred action for childhood arrivals. 

They said that would actually increase the Federal deficit by $7.5 

billion over 10 years? 

Ms. MOUSSAVIAN. Yes, that is correct. 

Mr. LIEU. Those two institutions are non-partisan or bipartisan, 

correct? 

Ms. MOUSSAVIAN. Yes. 

Mr. LIEU. It is also my understanding the Joint Committee on 

Taxation estimated $14.9 billion may be spent on EITC but it 

would be offset by $22.3 billion in additional Social Security payroll 

taxes, isn’t that correct? 

Ms. MOUSSAVIAN. Yes, it is. 

Mr. LIEU. I am going to reserve the balance of my time to make 

a Statement. It will be directed to Mr. Rector, not so much on the 

substance of your testimony but just on the tone of it. 

I think it is easy for people like you and me who wear suits and 

ties and work in offices to cast aspersions on those with a tenth 

grade education. I certainly hope you are not saying that only those 

with college degrees or high school degrees should be eligible for 

Federal benefits. 

Let us talk about some of these folks with a tenth grade education such as Maria Isabel Jimenez. She was a farm worker, 17 

years old. She worked for 9 hours 1 day on a farm near Stockton 

in brutal heat without shade or water and then she collapsed. She 

was taken to a hospital. Her body temperature was 108.4 degrees. 

She died 2 days later. 

When I was in the California State Legislature, I had the opportunity to meet over many years, many farm workers who have had 

families die in brutal conditions and in the heat so that you and 

I can have less expensive orange juice, cheaper artichokes, and less 

expensive garlic. 

I just want to suggest that people like Maria Isabel Jimenez, 

that her net contribution in dying so that you and I can have 

cheaper grocery bills so that we can spend less, she has given far 

more to American society than you and I ever will. 

I yield back. 

Mr. DESANTIS. The gentleman yields back. 

We do have some more time. Mr. Carter is in the queue if you 

would like to go? The Chair will recognize the gentleman from 

Georgia for 5 minutes. 
67 

Mr. CARTER. Thank you, Mr. Chairman. Thank all of you for 

being here. 

Bear with me if you will, OK? Are any of you parents just by 

chance? None. OK. 

What bothers me so much here is it just seems like we are rewarding bad behavior. Would you agree with that, Mr. Rector? 

Mr. RECTOR. Absolutely. What you have here is a situation where 

you are taking close to 4 million people, granting them access to 

the most expensive government entitlement system in the world 

and my calculations are that over the course of a lifetime, the total 

benefits they will get through amnesty minus the taxes they pay 

in is around $500,000 to $600,000. It is a massive reward. 

Then we talk about oh, they will pay a fine of $1,000. There are 

hundreds of millions of people who would like to come live in the 

United States. What you are doing here is not only permitting people to stay here illegally but giving them this massive financial 

windfall because they came here and broke our laws. 

I think that sends a very bad message to our population and 

across the globe. I think it is completely unfair to the U.S. taxpayer. 

We tried it before. We gave amnesty to nearly 3 million people 

and ended up with 10–12 million more that replaced those folks. 

It seems hard to imagine that rewarding illegal activity is going to 

give you less of it in the future. 

Mr. CARTER. Ms. O’Connor? 

Ms. O’CONNOR. Similarly, by rewarding it, we are creating an incentive for more of it and we are punishing the people who have 

been waiting in line for the legal immigration because our systems 

are going to be completely overwhelmed by handling the DACA and 

DAPA applicants that those who have already been waiting in line 

for years are going to be waiting in line for more years to enter the 

Country legally. 

Mr. CARTER. You are not a parent but you have parents, Ms. 

Moussavian? 

Ms. MOUSSAVIAN. Yes, I am from a very large family. My comment is that this is recognizing work and it is work that directly 

fed into our Social Security coffers and to our Federal tax revenue, 

into billions of dollars in State and local taxes. 

Mr. CARTER. You would subscribe to the theory that as long as 

you are doing something productive, it is OK to do it illegally? 

Ms. MOUSSAVIAN. I would subscribe to the theory that the IRS’ 

mission is to enforce the Internal Revenue Code and recognize they 

want everyone to be in compliance with their tax obligations. 

By providing this important economic support to parents of U.S. 

citizens, 95 percent of the DAPA eligible population is parents of 

U.S. citizens, Americans who have parents. 

Mr. CARTER. How did they become U.S. citizens? 

Ms. MOUSSAVIAN. I am sorry? 

Mr. CARTER. How did they become U.S. citizens? 

Ms. MOUSSAVIAN. Their children. 

Mr. CARTER. I understand but how did their children become 

U.S. citizens, because they were born here? 

Ms. MOUSSAVIAN. That is correct. 
68 

Mr. CARTER. Their parents were here illegally and they were 

born here. That makes them U.S. citizens, I get that. That means 

we should reward the parents who were here illegally? 

Ms. MOUSSAVIAN. It is not rewarding them. First, with respect 

to the tax credit, it does not take away the ability of any other person with a Social Security number to make claims for those same 

tax programs. 

With respect to the parents we are talking about of DAPA eligible population, we are talking about a population that has been 

here a minimum of 5 years, that have been paying taxes, that have 

been raising our next generation of innovators, students and the 

work force. 

Mr. CARTER. Understood. If they have been here more than 5 

years illegally, that makes it OK? 

Ms. MOUSSAVIAN. Under the executive actions, the President has 

said we need comprehensive immigration reform, and that is what 

I would ask of you and your colleagues, that ultimately the long 

term solution rests with you. 

The President has said through these initiatives, this is a way 

to put some order and sense into our immigration system rather 

than put these parents of U.S. citizens at risk of deportation. We 

want to recognize they have been here for a long time, they are 

deeply embedded in our communities and our work force. They are 

vital contributors. 

That is what the President’s executive actions are about. 

Mr. CARTER. What message do you think that sends to the children of American taxpayers who have been here legally? What 

message does that send to our society? 

Ms. MOUSSAVIAN. The President is sending the message, I want 

you to be able to stay with your parents regardless. 

Mr. CARTER. The President is sending the message that it is OK 

to break the law. 

Ms. MOUSSAVIAN. No, he is saying that our immigration system 

is dysfunctional and Congress, please work together to come up 

with a long term solution. 

Mr. CARTER. Two wrongs make a right? Is that what we are saying? 

Ms. MOUSSAVIAN. I think there have been many wrongs that 

have led to this current situation that we are in. We are out of 

touch. It is all well and good to say we should follow the laws. The 

problem is the system is broken at every level. 

Mr. CARTER. For some reason, I just do not think we will agree 

on this. 

Mr. DESANTIS. The gentleman’s time has expired. 

Mr. CARTER. Thank you. Thank you for being here. 

Ms. MOUSSAVIAN. Thank you. 

Mr. DESANTIS. I really appreciate the witnesses. I think we have 

had enough people that have asked questions. My sense is that we 

probably would not have many coming back. I want to thank the 

witnesses. 

I think at the end of the day, all of you made good points. The 

problem with being here is these are debates that should be had 

in Congress before you have massive policy changes. The President, 

by unilaterally doing something he said 22 different times he did 
69 

not have the authority to do, really short circuited the American 

peoples’ ability to weigh in on this. 

We do not know what is going to happen with the courts. We do 

not know what Congress will do. We do not know a lot of these 

things right now, but I think we need to put some of these ideas 

on the table and get different views because I think taxpayers deserve to know what effect, if any, this is going to have on the public 

and their tax liabilities. 

I appreciate everyone and we will stand adjourned. This hearing 

is concluded. 

[Whereupon, at 3:25 p.m., the subcommittees were adjourned.] 

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APPENDIX 

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