The Fiscal Cost of Resettling Refugees in the United States

Report by Matthew O’Brien and Spencer Raley | February 5, 2018

Executive Summary

At the end of 2016, the United Nations estimates that a record-setting 65.3 million people had been forcibly displaced from their homes due to conflict or persecution. Many of those people will seek refuge in the developed countries of the West, including the United States. Reflecting America’s long tradition of providing refuge to the oppressed, we have admitted over 3.5 million people since 1980 and 96,900 refugees just in the last year in 2016.

As the nation considers what levels of immigration we can fiscally and environmentally sustain, it is important to understand the costs of resettling both refugees (people seeking refugee status abroad) and political asylum seekers (those applying for refugee status from within the United States).

According to a new study released by FAIR, the annual cost to U.S. taxpayers is $1.8 billion and over five years, that financial burden skyrockets to $8.8 billion.

Those figures are only estimates because refugees will access welfare and other government assistance at different rates and the number of refugees entering the U.S also changes from year-to-year.

Using the most recent admissions figures, data on federal and state public assistance programs, and information from the Office of Refugee Resettlement (ORR), our analysis found:

• The cost per refugee to American taxpayers just under $79,600 in the first five years after a refugee is resettled in the U.S.;
• In 2016, the State Department spent nearly $545 million to process and resettle refugees, including $140,389,177 on transportation costs;
• Of the $1.8 billion in resettlement costs, $867 million was spent on welfare alone;
• In their first five years, approximately 54 percent of all refugees will hold jobs that pay less than $11 an hour;
• $71 million will be spent to educate refugees and asylum-seekers, a majority of which will be paid by state and local governments.
• Over five years, an estimated 15.7 percent of all refugees will need housing assistance, which is roughly $7,600 per household in 2014 dollars.

It is important to note that this analysis does not address the costs associated with any incurred national security and law enforcement costs associated with some refugees who pose a threat. The total price of additional vetting and screening expenditures, law enforcement and criminal justice costs, and federal homeland security assistance to state and local agencies is hard to quantify.

Introduction

At present, the United Nations estimates that there are approximately 65.3 million people who have been forcibly displaced from their homes by conflict or persecution¹. Many of those people will seek refuge in the developed countries of the West, including the United States.

America has a long tradition of providing refuge to the oppressed. We admit both refugees (people seeking refugee status abroad) and political asylees (people requesting refugee status from within the United States).² And doing so is consistent with our history and our values. But the way in which we integrate refugees/political asylees into our society has changed drastically over the years.

The largest groups of refugees arrived in United States the aftermath of World War II.³ Significant numbers of anti-communist dissidents sought political asylum during the Cold War.⁴ However, the admission of WWII refugees, and Cold War asylees, took place in an overall context of very low immigration.⁵ And, until the 1980’s most refugee assistance was provided through private networks of charitable ethnic and religious groups that provided both financial assistance and help in assimilating to the American way of life.⁶ Many Americans contributed generously to those groups but their contributions were voluntary. Under the current model, taxpayers are involuntarily bankrolling the significant costs that resettling refugees and asylees imposes on the citizens of the United States.

Since 1980, the United States has admitted over 3.5 million people seeking refuge.⁷ We continue to admit refugees at a rate of roughly 50,000 to 100,000 refugees per year⁸ and 20,000-50,000 political asylees per year.⁹ Most of this cohort arrives here without financial resources and possessing few marketable job skills. And the American taxpayer is being asked to feed, clothe and shelter them, in addition to funding job training programs.¹⁰

Most refugee/asylee resettlement expenditures come in the form of cash assistance, welfare programs and other social services. Federal welfare programs that refugees and asylees can access include the following:

• Temporary Assistance for Needy Families (TANF) formerly known as AFDC
• Medicaid
• Food Stamps
• Public Housing
• Supplemental Security Income (SSI)
• Social Security Disability Insurance
• Child Care and Development Fund
• Job Opportunities for Low Income Individuals (JOLI)
• Low-Income Home Energy Assistance Program (LIHEAP)
• Postsecondary Education Loans and Grants
• Refugee Assistance Programs
• Earned Income Tax Credit and Additional Child Tax Credit¹¹

State and local welfare programs that refugees and asylees can apply for include but are not limited to:

• Housing assistance
• English as a Second Language programs
• Special education programs
• Job training and employment search assistance
• Social services programs
• Immigration assistance programs (aiding asylees in filing green card applications, citizenship applications, and petitions for relatives to immigrate to the U.S.)¹²

Eligibility for some of these programs expires seven years after an individual is admitted to the United States as a refugee or asylee. However, many welfare programs are available for as long as a refugee/asylee resides in the United States.¹³

Additionally, the U.S. incurs significant expenses before refugees even get here: vetting applicants for refugee status, processing immigration applications and transporting approved applicants to the United States. Asylum seekers may cost taxpayers even more, considering they are present in the United States when they apply for protection. Because of this, they are entitled, as a matter of law, to a hearing on their asylum claim before U.S. Citizenship and Immigration Services, an additional hearing before the U.S. Immigration Court if the government intends to deny their claim, and an appeal to the Board of Immigration Appeals.

Funding all of these programs places a heavy burden on the public treasury. Below is FAIR’s estimate of the calculable cost, per refugee/asylee, for their first five years in the United States.

NB: Both refugees and political asylees are admitted to the United States based on the definition of refugee found at 8 U.S.C. § 1101(a). The major difference between the two statuses is that applicants for refugee status are abroad, applicants for political asylum are at the U.S. border or within the United States. Hereinafter, for the sake of convenience, FAIR uses the term “refugee” to refer to both traditional refugees and political asylees (unless otherwise specified).

Methodology

When calculating refugee costs, it is important to understand that the usage of various federal assistance and benefit programs is far from static. Welfare usage by refugees typically decreases the longer they reside in the country. However, even after five years, the rate at which refugees use public assistance programs is still much higher than the overall national average. The Office of Refugee Resettlement (ORR) releases up to five years’ worth data on the use of welfare programs by refugees in their annual report to Congress. To find a consistent annual rate, we calculate the average rate of usage based on the available data during that allotted five-year period.

In addition to varying welfare usage rates, the number of refugees entering the U.S also changes from year-to-year. We base our calculations on the most recent admissions data. As such, if the United States decides to increase the total number refugees it admits on an annual basis, these costs will increase. Unanticipated surges in the number of individuals admitted as refugees commonly occur in response to geopolitical events.

After determining how many refugees are likely to use a welfare benefit, we then multiply this number by the annual average benefit to find the mean yearly cost to U.S taxpayers. We conservatively estimate that amount of public assistance received by refugees each year is roughly equal to the overall national average.

In contrast to welfare expenses, the majority of specifically budgeted federal costs associated with refugees occurs during the initial resettlement phase. This includes costs such as transportation, processing, reception, placement, and programs designed to help entrants find employment and welfare benefits. For simplicity, we break these costs up and include them in the annual cost over five years.

Unless otherwise noted, we draw all statistics relating to the overall number of refugees utilizing specific welfare programs from ORR’s latest Annual Report to Congress, compiled at the end of fiscal year 2015.¹⁴ The total number of refugees and asylees is also derived from the ORR’s latest figures.