Obama also defended his record on Hispanic-related issues, in particular on increasing access to a college education and on appointments. The appointments of U.S. Dept. of Labor Sec. Hilda Solis (the first Hispanic woman to serve on the Cabinet) and Supreme Court Justice Sonia Sotomayor were both referenced multiple times in Obama’s speech.

Calling immigrants “[j]ob creators who came here to seek opportunity and now seek to share opportunity,” Obama argued that the current U.S. immigration system tolerates those who break the rules — undocumented immigrants and businesses that employ them — while punishing legal immigrants.

He defended himself on what Hispanic leaders say is a broken campaign pledge, “La Promesa,” to get comprehensive immigration reform on the congressional agenda. Obama said he supported the DREAM Act — a bill providing a path to citizenship to undocumented youth provided they go to college or serve in the military — and was disappointed when Senate Republicans voted against it in 2010.

“Many of the folks who walked away had previously been sponsors [of the DREAM Act],” Obama pointed out, referring to Republican U.S. senators like Lindsey Graham (S.C.) and Richard Lugar (Ind.) who worked with Democrats on immigration legislation in the past but now refuse to support legalization efforts because they say immigration has been politicized by the White House.

However, when Obama stated that he could not use the power of the executive branch alone to prevent people who qualify for the DREAM Act from being deported, the crowd broke into loud cries of “Yes you can! Yes you can.” Many have taken a recent memofrom Immigration and Customs Enforcement director John Morton urging prosecutorial discretion on immigration cases to be a sign that the administration was seeking immigration reform without going through Congress.

But Obama appeared to reject executive-driven immigration reform, telling the chanting conference attendees that he had to follow the laws as written by Congress.

“Feel free to keep the heat on me, and keep the heat on Democrats, but here’s the thing to remember: The Democrats and your president are with you. Remember who it is that we need to move in order to change the laws,” he said.

Earlier in the speech Obama also said he supported putting laid-off construction workers to work building infrastructure and schools, adding that the burden was on Congress to produce such legislation so that he could sign it. He also spent a portion of the speech discussing ongoing deficit talks, restating his belief that new revenue should accompany meaningful spending cuts.

“Don’t all immigrants deserve the respect and relief that the Dreamers will get?” Velazquez, chairwoman of the Congressional Hispanic Caucus, said. “Definitely. And we won’t stop until we get comprehensive immigration reform.”

At a pro-reform meeting today, Menendez announced he will unveil a comprehensive reform bill, which the lawmakers said they hope to pass as soon as possible. (Prospects for passing a bill, of course, remain bleak, particularly with the current anti-immigrant fervor.) The three politicians said they will meet with President Obama tomorrow to discuss immigration issues.

“We need the president to speak loudly that when Bob Menendez introduces that bill, he will stand behind that bill,” Gutierrez said.

Gutierrez said he plans to ask Obama to freeze non-criminal deportations — particularly of parents of U.S. citizen children — until comprehensive immigration reform passes. This could provide security from deportation for a large number of illegal immigrants: There are 4 billion U.S.-born children of illegal immigrants, according to the latest estimates.

The DREAM act, which should go up for a vote as part of the defense bill next week, is “a step in the right direction,” Velazquez said. First, though, it needs to pass. “We need Republicans to stand up and say ‘yes’ to the DREAM Act next week and allow a vote,” Gutierrez said.

Advocates of comprehensive immigration reform were once wary of supporting the DREAM Act as a standalone measure because it could scare off future votes for comprehensive immigration reform. Mary Giovagnoli, director of Immigration Policy Center, told TWI recently that it is no longer clear how the DREAM Act’s passage would impact comprehensive reform efforts.

“We don’t have a good measure anymore of what will happen once we get something discreet like the DREAM Act passed,” she said. “But when the sky doesn’t fall in and if people still get re-elected after supporting DREAM, it may show members of Congress that leaning into the immigration issue and voting for comprehensive immigration reform could help them politically.”

Never mind that just last month, Graham expressed his interest in passing immigration reform this year. The question now is whether Graham is willing to budge on the issue. And now it appears that some of Graham’s conservative GOP colleagues would very much like him to.

Dave Weigel reports:

Right after his not-so-secretly preferred U.S. Senate candidate Marco Rubio comes out against Arizona’s new immigration reform law, Jeb Bush lends his name to an under-the-radar conservative campaign for federal immigration reform this year. On Thursday, Bush will headline a “nationwide strategy call with key business and Evangelical leaders to share convictions around the need for immigration reform this year,” according to Conservatives for Comprehensive Immigration Reform.

If more Republicans come out in favor of immigration reform, it’ll be interesting to see if Graham is willing to get back to work on the issue — after all, he’s one of two senators crafting the immigration reform bill — or at least to drop his opposition and allow climate legislation to proceed.

Immigration reform has never been at the top of the president’s agenda, although he’s said he supports it, but today he made clear that health care reform comes first. (Meanwhile, some immigration restrictionists are using the immigration debate to argue against health care reform, saying we’d just be paying to provide services to a bunch of illegal immigrants.)

Putting the immigration debate off until next year could put the whole effort at risk, though, given that it’s a hot-button issue — particularly in border states — and that 2010 is an election year.

As Sen. Mel Martinez (R-Fla.) said in June — before he announced on Friday that he would resign from the Senate — “This is the kind of issue that in an election year becomes very, very difficult.”

In the meantime, Obama and Secretary of Homeland Security Janet Napolitano have been expanding controversial programs to allow local police to enforce federal immigration laws and preparing for the deportation of tens of thousands more illegal immigrants next year.

Joel Millman at The Wall Street Journal reports today on a major shift away from the traditional crossings of seasonal laborers, who may have once paid a small sum to a “coyote” to help them cross the border, towards a Mexican gang-driven trade that’s led to a proliferation of “drop-houses” in the United States, particularly in Arizona, where border enforcement in the desert has been less successful than in California and Texas. There are reportedly about a thousand such “drop houses” in Arizona now.

Gang members hold immigrants hostage at these houses until either the immigrants or their future employers pay up. In one recent case, The Journal reports, “the men were being shaken down for as much as $5,000 apiece, a ransom above the $1,000 that each had agreed to pay before being spirited across the border.”

So far, the Department of Homeland Security has been addressing border violence as largely a law enforcement problem. The growing impact on immigrants, however, could create more pressure on the Obama administration to legalize the border crossings of some foreign workers as part of a broader plan for comprehensive immigration reform that immigrants’ rights groups and even labor unions have been advocating.

President Barack Obama (WDCpix)

Last week, a senior aide to President Obama told The New York Times that the White House plans to support a comprehensive immigration reform bill that would offer a path to legalization for undocumented workers. But will Obama be willing to invest the political capital needed to pass such a bill during an economic crisis – when anti-immigrant sentiment is generally at its peak? After all, President George W. Bush couldn’t get Congress to pass a comprehensive immigration reform bill during his presidency even during an economic bubble; he faced too much opposition from within his own party.

Illustration by: Matt Mahurin

This time, advocates for comprehensive immigration reform that includes legalization for some undocumented workers – what restrictionists derisively call “amnesty” – are making the case that it isn’t just about being sympathetic towards foreign workers. It’s about improving the American economy, and raising wages and conditions for legal U.S. workers, they say — and it’s won support from the U.S. labor movement on a reform package. And though these calculations are always heavily debated, it does appear that this time, the advocates for immigrants have the data on their side.

Yesterday, the Immigration Policy Center (the research arm of the American Immigration Law Foundation) released a new report , “The Economics of Immigration Reform: What Legalizing Undocumented Immigrants Would Mean for the U.S. Economy.” The report is chock full of facts and figures showing that legalizing undocumented workers would “improve wages and working conditions for all workers, and increase tax revenues for cash-strapped federal, state and local governments.” Comprehensive immigration reform legislation would “pay for itself through the increased tax revenue it generates,” and newly legalized workers would be better positioned to move into higher paying jobs, pay higher taxes, and spend more on goods and services – all of which would serve as an economic stimulus to the economy.

The logic is simple. Legal workers earn on average 15 percent more than their illegal counterparts doing the same job, concludes a report done for the Department of Labor. Raising immigrants’ wages means they pay more in taxes, and have more money to spend in the economy. It also reduces the downward pressure on wages that’s long been exerted by the underground economy, where employers can skirt minimum wage and safety laws — which is why labor unions now support legalization, too.

Other studies of undocumented workers suggest similar gains. The Fiscal Policy Institute, for example, studying the construction industry in New York City, found that nearly one in four workers were working “off the books.” As a result, the federal government lost about $272 million in 2005 because employers didn’t pay Social Security, Medicare, workers’ compensation, unemployment insurance, and disability insurance, and another $70 million lost in personal income taxes. Although most studies have found that more than half of undocumented immigrants work on the books and pay federal and state income, social security and Medicare taxes, about half of them don’t. Legalization would collect taxes from everyone.

The impact on the cost of government services, however, is more controversial, with immigration restrictionists citing the heavy burdens that new immigrants place on social services systems. Still, most studies show that immigration ultimately leads to an overall increase in government revenue.

A study by the nonpartisan Congressional Budget Office, estimated that the cost of the immigration reform bill proposed in 2006 would have been more than offset by the benefits. Legalization would have generated $66 billion over ten years from income and payroll taxes, which would have more than paid for the $54 billion in spending on refundable tax credits, Medicaid, Medicare, Social Security and food stamps that the groups estimated the government would spend on newly eligible immigrants and their families.

Restrictionist groups, meanwhile, often cite an older study, from 1997, by the National Academy of Sciences that found that immigrants with no more than a high school education would initially cost the government more than they add in revenue. “If we’re talking about people in the [United States] illegally, we’re talking about people largely without more than a high school education,” said Steven Camarota, Director of Research for the restrictionist Center for Immigration Studies. The NAS study, he said, finds that an immigrant who comes to the United States without a high school education creates a net fiscal drain in his lifetime of $89,000, meaning he used that much more in services than he paid in taxes. If he has a high school education, the drain was lower, around $39,000. Those with more than a high school education, on the other hand, had a positive fiscal effect. According to a Pew Hispanic Center study released today, about 25 percent of undocumented immigrants fall into that category.

Nevertheless, a closer look at the National Academy of Sciences’ study shows a different picture. The study itself emphasizes the importance of taking a long-range view of immigration, rather than a one-year snapshot. Taking into account all of the various effects of immigration on the economy, including the effect on wages, demand, taxes and social services, the NAS actually found that immigration yields a gain in the overall economy – “on the order of $1 billion to $10 billion a year. Although this gain may be modest relative to the size of the U.S. economy, it remains a significant positive gain in absolute terms.”

That’s because over time, legal immigrants tend to work hard, get an education and advance themselves and their families economically. And that has a positive ripple effect throughout the economy.

“The U.S. economy is not a fixed pie,” said Dan Siciliano, Executive Director of the Program in Law, Economics and Business at Stanford Law School. “It is a dynamic economy that grows and shrinks depending on what’s going on.” Much of what drives growth has to do with the middle class, said Siciliano, who participated in a conference call of experts arranged by the Immigration Policy Center in conjunction with the release of its new report.

A path to legalization for undocumented workers also serves as a path to enter the middle class. “This is critical,” he said.

The problem with the current economy is the overall uncertainty, which decreases investment. “These problems are exaggerated and made worse if you’re undocumented,” said Siciliano. “Enfranchised consumers who are part of the above-ground economy are better consumers. You’re more willing to buy a home if you have certainty about your ability to stay in a community,” explained Siciliano. Immigrants are also more likely to invest in their own education and advancement, and that of their children, if they know they can stay and work where they are.

In addition to the fixed-pie perspective, opponents of legalization often assume that if the government does not legalize their status, immigrants will leave.

“What you sometimes hear is a kind of wishful thinking,” said David Kallick, a senior fellow at the Fiscal Policy Institute who also participated in the IPC conference call. “If undocumented immigrants just vanished, wouldn’t that mean there would be jobs freed up for US workers? But people don’t just vanish.” What’s more, if they did, it would “cause tremendous disruption in US businesses” which would “lead to fewer jobs to go around,” he said. “Mass deportation would be terrible for the economy. And it’s not real. It’s not going to happen.”

Not that mass deportation would be economical, either: the left-leaning Center for American Progress has found that deporting all undocumented immigrants in the U.S. would cost $41 billion a year.

Heavy spending on border enforcement alone also hasn’t kept people out. Even though spending on immigration enforcement more than tripled between 1993 and 2006, so has the number of undocumented immigrants in this country, notes the Immigration Policy Center in its report.

Administration officials say that ultimately, any comprehensive immigration reform package President Obama supports would include not only a path to legalization, but improved enforcement at the border and development of an improved national computer database that would allow employers to check the work eligibility of new job applicants. (The current system, called E-Verify, is not widely used and has been criticized as unreliable and inefficient.)

Still, Republican opponents of legalization, such as Rep. Steve King (R-Iowa), have vowed to fight any such bill, arguing that this is no time to increase competition for legal U.S. workers for scarce jobs. “In our current economic crisis, Americans cannot afford to lose more jobs to illegal workers,” King told the New York Times. “American workers are depending on President Obama to protect their jobs from those in America illegally.”

That labor unions, which have in the past expressed the same concerns, are now coming around to the immigration advocates’ side suggests a major shift in perspective about the potential impact of immigration reform on U.S. workers during a recession. We need an immigration system that is part of a national economic recovery program,” said Esther Lopez, Director of Civil Rights for the United Food and Commercial Workers’ Union.

Gerald Jaynes, a professor of Economics and African-American Studies at Yale, has also come around to supporting immigration reform, after years of resisting due to concern about the impact on low-wage workers.

“Several years ago I was convinced that immigration significantly lowered native wages and employment,” he said at the IPC conference, but added that “subsequently, my statistical analyses forced me to conclude otherwise.” (Here is Jaynes’ testimony to Congress on the subject in 2007.) Although undocumented immigration has a slightly negative effect on native-born low-wage workers, he said, “the effects are relatively small, and in any event secondary to other causes of less educated workers’ dismal employment and wage experiences.” And because the work of immigrants often complements that of U.S.-born workers, “immigration can actually create jobs.”

Immigration reform that includes a path to legalization for undocumented workers, then, “is likely to improve conditions” of the overall workforce, he said, echoing one of the major themes that immigrants’ advocates are using to promote a reform package expected to be introduced this year. “One of the major problems for native workers of low education and skills is that they are competing against undocumented workers who employers are taking advantage of,” said Jaynes. “So to eliminate exploitation for the undocumented in effect eliminates or minimizes exploitation in American labor markets for all of the participants.”