Trump Is Coming for Green Card Holders

(Bloomberg Opinion) -- You can now safely dismiss any supporters of Donald Trump who tell you that the president’s crusade against immigration is only directed at the illegal variety. In a recent proposed rule change, Trump would bar legal immigrants who use a variety of government benefits from obtaining green cards or renewing their visas. The rule, if passed, and if it holds up in court, would translate into a huge reduction in legal immigration to the U.S. — all without requiring any act of Congress.

In order to get a green card or many types of visas, immigrants now have to show that they are “not likely to become a public charge,” according to a law that has been on the books since 1882. Since 1999, a public charge has been defined as someone who is primarily dependent on cash assistance, such as the Temporary Assistance to Needy Families program. Of course, the government doesn’t know who will eventually need welfare, so it uses a variety of indicators to make a decision about each prospective immigrant. In recent years, only about 3 percent of applicants have been turned away under this rule. 

The new Trump policy would change that dramatically. It would expand the definition of “public charge” to include anyone who receives even a small amount of Medicaid, food stamps, housing vouchers or low-income subsidies for prescription drugs under Medicare Part D. All that would be necessary in order to be denied under the new policy would be for immigration officials to decide — based on a complex formula stipulated in the 447-page proposal — that a prospective immigrant would be likely to ever use one of these benefits. Household income, assets and other financial resources would also be taken into account.

This would dramatically reduce legal immigration to the U.S. The Migration Policy Institute estimated that 47 percent of immigrants would be vulnerable to exclusion under an earlier draft of the rule. The current rule is somewhat less stringent, and some immigrants would be able to avoid the rule by scrupulously avoiding the use of government benefits, but this would still probably represent a dramatic expansion of the number of legal immigrants excluded from or forced to leave the country.

On its surface, the new proposal looks like an effort to shift U.S. immigration toward high-skilled workers. That is a policy I have long recommended, and it has many economic and social benefits. But there are several reasons why Trump’s new rule won't accomplish this goal, and would worsen the quality of American immigration policy.

First, the proposal would probably exclude a lot of skilled immigrants. Many smart, talented people come to work in the U.S. without many financial resources. Instead of dollars in the bank, their true asset is their human capital — the talent, grit, work ethic and ambition to make good in their adopted country.

The classic example is Andrew Carnegie, the steel magnate who came to the U.S. from Scotland desperately poor at age 12, and ended up establishing the company that eventually became U.S. Steel. His is not the only such story. Andrew Grove, one of the founders of semiconductor giant Intel, started out poor after fleeing from Hungary. These stories are exceptional, but the pattern is a common one — study after study finds that immigrants have strong levels of intergenerational mobility.

Trump’s new rule would prevent many future Andrew Carnegie types from coming to America. You can’t have rags-to-riches stories if you kick out anyone who comes to the U.S. in rags. Immigrant entrepreneurs could no longer use food stamps as they struggle in shabby garages to create the company that becomes the next Google or the next Intel. Since immigrants tend to be much more entrepreneurial than the native-born, the new rule could deal a heavy blow to American economic dynamism:

Trump Is Coming for Green Card Holders

The second problem with Trump’s proposal is that complex administrative rules are a terrible way to make policy. The byzantine system under consideration by the administration will be hellish for any immigrant, even a high-skilled one, to navigate. Most would probably just stop using any sort of government assistance — a move that will please some conservatives but will have damaging effects on immigrant kids. More problematic, many prospective immigrants, including high-skilled ones, would see the new thicket of rules and simply decide not to try coming to the U.S. in the first place. This “chilling effect,” as the Migration Policy Institute calls it, could rob the country of a lot of talent.

Finally, if increasing the skill level of U.S. immigration is the goal, the policy is unnecessary. During the past few years, as mass low-skilled immigration from Latin America has dried up, the education level of the average U.S. immigrant has risen rapidly:

Trump Is Coming for Green Card Holders

So Trump’s new rule change won’t help recruit the best and the brightest for the U.S. workforce — instead, it will keep many of them out. The result will be a less dynamic, poorer country — and the dulling of the U.S.’s reputation as a place where talented people without money in the bank can come, work hard, and pull themselves up by their bootstraps.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

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