Four consequences of Obama’s immigration action

Four consequences of Obama’s immigration action

The rift between Republican and Democratic characterizations of President Obama’s executive order on undocumented immigrants could hardly be wider.

The actions, which were carefully announced after the midterm elections but before the Republicans officially take over the Senate in January, are designed to bolster security at the US-Mexico border and allow a subset of undocumented immigrants to remain in the US without fear of deportation.

The executive order will only apply to undocumented parents of US citizens and DREAMers (after the Development, Relief, and Education for Alien Minors Act), undocumented youth who were brought to the US illegally by their parents. They must be non-felons and have been in the US for five years. That applies to approximately 4.4 million of the estimated 11.7 million undocumented immigrants in the US.

An executive order that affects this many people is certain to have a long list of consequences for the immigration debate as it begins again in 2015. Here are four of them.

1. Poison Pill for Republican Goodwill?

One of the more frequently-heard Republican responses to President Obama’s actions is that they destroyed any chances for a bipartisan immigration reform bill next year. Whether this is true or not remains to be seen, but the line is more likely an attempt to shrink the President’s political capital when it does come time to negotiate reforms.

The “prosecutorial discretion,” as the White House describes the action, to temporarily allow certain undocumented workers to remain in the US without being deported, is more of an affront to Republicans simply because the President circumnavigated them, rather than because of the action itself. Either way, the action is only a stop-gap measure and will need to be addressed again.

The heart of the immigration debate, and the two parties’ common ground, largely remains untouched. Any major negotiation legislation requires areas of agreement to get off the ground followed by deal-making and cunning to get the rest of the way. The deals that would be made are still far off, but the common ground of enhancing border security, visas for highly-educated workers, and some sort of qualified path to citizenship remains.

The biggest tangible threat that the President’s executive actions pose is the cost in political capital. For a relatively tame action (in the scheme of the larger policy question), President Obama had been forced to endure a week’s worth of negative sound bites – such as being called “King Obama.” Already in a weakened position after the Democrats’ election loss, the political capital incurred for this executive order may prove better used during negotiations over legislation.

2. Is a Court Challenge Likely?

Republicans have insisted that President Obama overstepped his executive authority. But they will probably not back up their Sunday talk show rhetoric with legal challenges if for no other reason that it would destroy any remaining chances of passing an immigration law.

A lawsuit would cloud the air since the uncertainty of a judge’s decision could radically re-frame the negotiations. Many Republicans, especially the four members of the Gang of Eight pushing for immigration reform, are likely to exert their influence within the party to stop any such derailing lawsuit.

This does not guarantee a lawsuit will not occur because the Republican Party is beginning to have trouble controlling the activists in the party, but it does not seem like the party’s preferred next step.

3. Increase in the Labor Force, GDP

Last year’s comprehensive immigration bill, which eventually died in Congress, gave an indication of the true economic impact of actions like President Obama’s. Of course, this set of executive orders will be on a smaller scale – since it affects just under half of undocumented immigrants and only a subset of the issues in the bill.

The non-partisan Congressional Budget Office projected that last year’s bill would have a modestly positive impact on the US economy. If President Obama’s actions have one-quarter of the effect as the bill, they would add approximately 0.8% to GDP  and have a negligible effect on the average wage by 2023. The federal deficit would be projected to fall by $50 billion over the next decade.

Most undocumented workers are already working, but legal status would change their role in the economy. Without fear of deportation, these workers would not have to settle for poor working conditions and below-minimum wage pay. Above board paychecks will increase tax revenue and bolster Social Security, but also increase costs for industries that rely on heavily on undocumented immigrant labor like agriculture and construction.

These are just two industries, however. The increased wages from this population will increase consumer demand and benefit the US economy on a broad scale.

4. Momentum for Reform Advocates

The President’s announcement may have a limited impact – it certainly not as expansive as a bipartisan bill would be and will only have temporary impact – but it has already been a major momentum boost for immigration reform advocates.

For one thing, many of the reform advocates are so engaged because the prospect of deportation has or could affect their friends or family. But it is also a legitimizing win for their cause. The new-found energy will help organize support for further reforms, including a path to citizenship for undocumented immigrants.

As much as President Obama’s actions have enthused immigration advocates and their allies, it may not help the Democrats in the next election. Even though the overriding narrative of the 2012 presidential election was that Mitt Romney lost the election due to low support from Hispanic voters, New York Times analysis debunks this myth. Since most Hispanic votes, which make up about 10% of the US total, are in non-competitive states like California and Texas, Republicans could still win by targeting other groups in battleground states like Florida and Ohio.

Even though the 2016 presidential election is under two years from now, there is quite a bit of immigration debate to come before then. The result will hinge on whether these executive orders turn out to give momentum to the immigration advocates or the more hostile portion of the Republican Party.

Categories: North America, Politics

About Author

Alex Christensen

Alex is an Editor at Global Risk Insights, who also currently works in investment research. His work on political risk and economic policy has appeared in many forums, including Business Insider, Seeking Alpha, & The Emerging Market Investors Association. He holds a Master’s in Economics from the London School of Economics and BA from Washington University in St. Louis.