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CHERTOFF'S PREDICTION ON AUGUST 11, 2007:
On August 8th, Secretary of Homeland Security Michael Chertoff, and Commerce Secretary Carlos M. Gutierrez, explained at a Conference of State Legislatures in Boston, that Congress's failure to pass immigration reform will hurt the American economy. Although this article was written last year, it details the government's awareness of how an immigration crackdown, and how measures like the 'No Match' law, will negatively impact the economy. It is well known that LA is the city that is most deeply dependent on unauthorized workers, and is therefore the most economically vulnerable. He characterizes the effect enforcement measures will have on businesses as a "thunderstorm" to "tsunami". "There will be some unhappy consequences for the economy out of doing this," he said in an interview with The Times.


Immigration May Hurt Economy
Los Angeles Times
Nicole Gaouette
August 11, 2007

Homeland Security Secretary Michael Chertoff predicted painful economic fallout from the array of immigration enforcement measures the administration unveiled Friday in an attempt to choke off the jobs "magnet" that draws illegal immigrants.

The changes, which would stiffen work-site enforcement, add border agents and increase penalties for rogue employers, could cause havoc in immigrant-dependent industries like agriculture, hospitality and healthcare, Chertoff acknowledged. "There will be some unhappy consequences for the economy out of doing this," he said in an interview with The Times.

Chertoff said he had little sympathy for businesses that hire illegal workers, saying they should have seen the crackdown coming after the Senate failed to pass immigration reform. "We have been crystal clear about what the consequences would be," he said.

The announcement of the multi-agency initiative -- made by Chertoff and Commerce Secretary Carlos M. Gutierrez -- was the Bush administration's first extensive explanation of how it plans to ramp up the fight against illegal immigration. In a statement, President Bush called the measures "important" and promised "to take every possible step" to strengthen the nation's "broken immigration system."

The enforcement approach is aimed partly at placating conservative Republicans who are angry about the administration's failure to enforce existing immigration laws and the president's support for a plan that would have allowed illegal immigrants to become citizens.

But it also could create a political climate that might lead to the comprehensive changes the administration has sought, including a guest worker program and some accommodation for the estimated 12 million illegal immigrants in the United States. Chertoff said the provisions, some of which take effect in 30 days, could push corporate America to apply more pressure on Congress to reconsider broad reforms.

"I'm not a lawmaker, but I presume, at some point, somebody's going to take a look and say, 'We've got to find a way to address this problem,' and that's probably going to require some legal changes," he said. But he stressed that "this is not an effort to punish Congress."

Gutierrez framed the issue more starkly: "We do not have the workers our economy needs to keep growing each year. The demographics simply are not on our side. Ultimately, Congress will have to pass comprehensive immigration reform."

Business groups, unions, immigrant advocates and religious organizations protested the provisions. But longtime opponents of comprehensive reform greeted the news happily.

"This is exactly what the American people were saying. . . when they said, 'Why don't we start out by enforcing existing laws and prove that Washington will do the right thing?' " said Rep. Brian P. Bilbray (R-Solano Beach). "Once we reinstate confidence in the government, then we can come back and talk about the other stuff."

Bilbray compared ending the nation's economic dependency on illegal immigration to weaning an addict off drugs. "If there's some pain, it's not because we didn't have amnesty. It's because we didn't enforce the law 20 years ago when we should have," he said. Others expressed skepticism about the Department of Homeland Security's ability to enforce the measures, pointing out that the department cannot even come up with the number of high-skilled visa-holders in the country. "The agency that can't count is now going to go on this enforcement gig," said Rep. Zoe Lofgren (D-San Jose), chairwoman of the House immigration subcommittee. "We'll see how they do."

Business groups predicted the effect would be broadly felt.

"It's going to be awful; the harvest is going to be awful," said Laura Foote Reiff, co-chairwoman of the Business Immigration Group, predicting the effect on agriculture, where more than half of the 2.5 million workers are believed to be illegal. "People will feel it when they go grocery shopping, when they read in the newspaper that we're importing our meat from China."

Many of the measures the administration highlighted Friday are already underway, including a dramatic increase in criminal prosecutions of employers with illegal workers. Immigration officials have made 742 such arrests in the first 10 months of this fiscal year.

Some measures are in the early planning stages. A couple are a few months from launching, including a requirement that federal contractors use E-Verify, an electronic system to confirm that their employees are legal.

Others had been under consideration for some time, including a move to force businesses to fire workers with discrepancies in their Social Security data or face civil fines. Because many illegal immigrants work under fake Social Security numbers or use those of citizens, it is considered a relatively easy way to identify them. But the regulation taking effect in 30 days has companies intensely concerned, in part because the error rate in Social Security data for U.S. citizens has been estimated as high as 11%.

"We're giving employers a clear choice," Chertoff said. "If you take the steps we lay out, you'll have a safe harbor. If you don't, you're putting yourself at risk."

He characterized the effect of the Social Security rule on most businesses as a "thunderstorm."

"There will only be a tsunami if I have a business where I have 80% of my employees I fear are illegal," Chertoff said. "If I'm basically confident my workforce is legal, it's going to be a little thunderstorm. But for some it will expose patterns and practices that may be illegal."

Chertoff brushed aside concerns that the rule could drive businesses to hire employees off the books. "An employer who does that is making a deliberate decision to compound their legal difficulties by committing tax crimes as well as immigration crimes," he said.

Administration officials began meeting to discuss these steps in June, immediately after the Senate failed to overhaul the nation's immigration laws. The White House presided over sessions that included the Departments of State, Labor, Commerce, Homeland Security and Education. Officials from Treasury and the Social Security Administration also took part.

Chertoff said the administration held off on implementing these measures in the hope that a legislative overhaul would provide a tougher arsenal. "We looked at these programs late last year, early this year, and we thought, 'You know, this is kind of a half-measure. Wouldn't it be better to get the full measure and the sharpest, newest tools if Congress passes them and gives it to us?' " he said.

While some of the new measures would add to the Department of Homeland Security's enforcement personnel, Chertoff said that it would not have the agents to track down every employer who breaks the law. Instead, he argued that high-impact, high-visibility enforcement would act as a deterrent.

Chertoff suggested that once the provisions had been in force for a while, Congress would see immigration reform in a different light.

"Everybody who criticized comprehensive immigration reform for being too complex, maybe now they're going to realize it's complex because there are a lot of interconnected pieces to this and when you try to deal with only one corner of it, you wind up with a huge impact on something else," he said.

"I would still like to believe Congress is capable of doing big things and not just producing bumper-sticker solutions to problems. I haven't given up yet."