FACT CHECK: Would Ending DACA Cost The Economy $460 Billion?

Emily Larsen | Fact Check Reporter

Former Virginia Governor Terry McAuliffe said Sunday that ending the Deferred Action for Childhood Arrivals (DACA) program would cost the economy $460 billion.

“You mentioned the moral issue. But there’s an economic issue here. If we don’t protect these 800,000 Dreamers, it will cost the U.S. economy $460 billion over the next decade,” said McAuliffe on CNN’s “State of the Union.”

Sen. Dick DurbinRep. Beto O’RourkeRep. Pramila Jayapal and several other Democratic members of Congress have repeated the claim over the last several months.

Verdict: Unsubstantiated

The $460 billion number evaluates the economic impact if all DACA recipients left the workforce, but experts say it’s likely many DACA recipients would remain in the U.S. and work illegally. Another estimate finds a lower economic impact.

Fact Check:

The Trump administration rescinded the DACA program in September, but gave Congress a six-month window to pass a legislative solution. DACA protects almost 800,000 younger illegal immigrants brought to the U.S. as children from immediate deportation and grants them work permits.

The $460 billion figure comes from an estimate by the liberal Center for American Progress (CAP). It found that removing all DACA recipients from the workforce would result in a loss of $460 billion in U.S. gross domestic product (GDP) over the next decade.

Another estimate from the libertarian Cato Institute says the economic impact of immediately deporting DACA recipients would reduce economic growth by $280 billion over the next decade. Ike Brannon, an author of the Cato study, told The Daily Caller News Foundation that his estimate is conservative and that CAP’s estimate is not outlandish.

CAP draws data from two other publications it produced: a report that estimates the economic impact of a policy of mass deportation and a survey that estimates the number of employed DACA recipients.

Its $460 billion figure assumes all DACA recipients would be taken out of the workforce entirely if the program expires, but a CAP survey found that about half were already employed before getting protected status.

The Cato study notes that it’s more realistic to expect DACA recipients who lose status to “predominantly remain in the United States and pursue employment illegally, at wages 10 to 20 percent less than they earned legally” rather than exit the workforce completely or be deported. In that case, Cato estimates an economic impact of $60 to $100 billion over 10 years.

CAP argues that mass deportation of DACA recipients is likely because the government has more identifying information for them when compared to other illegal immigrants. But Department of Homeland Security Secretary Kirstjen Nielsen told CBS News that DACA recipients would not be a priority for deportation if the program expires.

“If you are a DACA that’s compliant with your registration, meaning you haven’t committed a crime, and you in fact are registered, you’re not [a] priority of enforcement for ICE should the program end,” said Nielsen.

Robert Warren, senior visiting fellow at the Center for Migration Studies, told TheDCNF that he agrees it’s unlikely all DACA recipients will leave the country.

Critics of the estimates argue it’s misleading to say DACA recipients leaving the workforce would be a “cost” to the economy. They say the estimates make it sound like the economic outlook for most other people would be worse. Steven Camarota, director of research at the Center for Immigration Studies, says the economic loss would be absorbed by the DACA recipients, not other individuals.

“What matters in terms of the well-being of the population is not aggregate size of the economy, but the per capita income,” Camarota told TheDCNF. “If all that mattered was aggregate size, then Bangladesh, we’d say, is richer than New Zealand because it does have a larger economy than New Zealand. But we know that what matters is the per capita income. And they’re not trying to estimate what happens to the per capita income of everybody else.”

Alex Nowrasteh, an immigration policy analyst at the Cato Institute, says Camarota’s argument is odd because the Cato estimate doesn’t make any assumptions about per capita GDP. He noted two studies that showed that immigration slightly increases American wages and diminishing immigration lowers wage growth for native workers.

“A more thorough review of the economic effects of removing DACA would include how it lowers the wages and productivity of American workers,” Nowrasteh told TheDCNF in an email.

The left-leaning Brookings Institution estimated that it would cost the U.S. government $10 billion to deport all DACA recipients, while the annual budget for Immigration and Customs Enforcement is about $5 billion per year.

“This issue has been studied by right- and left-leaning organizations, both of which have found that ending DACA would be a dramatic net loss to our economy in the hundreds of billions of dollars,” O’Rourke told TheDCNF in an email.

McAuliffe, Durbin and Jayapal did not respond to requests for comment.

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Emily Larsen

Fact Check Reporter