Border Security, Economic Opportunity, and Immigration Modernization Act--Continued--

Floor Speech

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Mr. CRUZ. Madam President, I ask unanimous consent that the Senate temporarily set aside all pending amendments so that I may offer my amendment No. 1580.

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Mr. CRUZ. Madam President, the amendment I would have called up had not the majority party objected is an amendment that would have corrected one of the most egregious aspects of the Gang of 8 bill; namely, it is a penalty that is imposed on U.S. employers for hiring U.S. citizens and for hiring legal permanent residents. It is a striking result of the Gang of 8 bill as it intersects with the ObamaCare legislation.

Let me explain how it operates. Right now, for any company with 50 or more employees, if that company does not provide a sufficiently high-dollar health insurance policy for low-income workers, that company faces a fine of $3,000 per worker. Moreover, that fine is not deductible in the company's taxes, which means that as an effective matter to the company, the penalty is in the order of $5,000 per employee when you factor in the tax consequences. That is the present status quo under ObamaCare. That is the penalty that is visited upon U.S. employers for hiring U.S. citizens and for hiring legal immigrants.

What does the Gang of 8 bill do to change that? Well, the Gang of 8 bill takes some 11 million people who are here illegally and it grants them what is called RPI status--registered provisional immigrant status. I have many concerns about legalization prior to securing the border, but this concern is altogether separate from that, and it is the simple reality that anyone granted RPI status--anyone granted legalization under the Gang of 8 bill--is exempted from ObamaCare, which means that the employers who would be hiring them do not face the ObamaCare tax of $5,000 per employee, whether U.S. citizen or legal immigrant.

What does this mean in reality? Let's take an example, a simple hypothetical. Madam President, I would ask you to envision a small business: Joe's Burger Shack. Joe's Burger Shack is owned by a small business owner. It is a series of small fast food restaurants in any given State. It could be my home State of Texas or any State across the Union.

Let's assume that Joe's Burger Shack has 100 employees and that at Joe's Burger Shack, with 100 employees, business is doing relatively well, people are eating more hamburgers, and Joe decides he wants to hire 5 more people. If Joe and Joe's Burger Shack decide they want to hire five more people, if Joe chooses to hire five U.S. citizens or if he chooses to hire five legal permanent residents--five legal immigrants--Joe faces a penalty of $25,000 for doing so--$5,000 apiece right off his bottom line to the IRS. In contrast, if Joe decides instead to hire five RPIs, who came here illegally among those 11 million who are here illegally but granted RPI legalization under the Gang of 8 bill, Joe pays a penalty of zero dollars.

Let me ask a simple, commonsense question. In this instance, who is Joe, the small business owner, going to hire? This bill creates an enormous incentive to hire those here illegally, and at the same time it does it by creating a statutory penalty for hiring U.S. citizens and for hiring legal immigrants. That makes no sense.

Let me give a second example. Suppose Joe is facing harder times. Because of ObamaCare penalties, Joe makes the decision that a great many fast food restaurants have made--to forcibly reduce workers' hours. ObamaCare kicks in when a worker works 30 hours a week, so a great many small businesses--and in particular fast food restaurants--have been forced to forcibly reduce their employees' hours to 29 hours a week or less.

Now, imagine that of Joe's 100 employees, 25 of them are RPIs--are formerly illegal immigrants who have received legalization under the Gang of 8--and 75 are either U.S. citizens or legal permanent residents.

Well, if Joe wants to reduce the hours of 25 of his employees both below the 30-hour threshold because times are hard and he cannot afford the burden ObamaCare is putting on his business, if Joe forcibly reduces the hours of 25 U.S. citizen employees or 25 legal immigrant employees to below 30 hours a week, Joe saves potentially $125,000 a year in tax penalties, $5,000 apiece times 25 employees.

In contrast, if Joe says instead, I want to reduce the hours forcibly of those who are here illegally who have received legalization through the Gang of 8, Joe saves zero dollars in tax penalties because he is not paying a tax penalty regardless of whether those here illegally are working 30 or 40 hours or more. The question I would pose to the Presiding Officer is, whose hours will Joe reduce?

This statute puts an enormous incentive, an incentive from Congress, for Joe to forcibly reduce the hours of U.S. citizens and of legal immigrants.

Let me give a third and even more stringent example. Imagine if Joe is facing great financial burden, as a lot of small businesses are, as a lot of small businesses are struggling. Imagine if Joe instead made the decision to fire all 100 workers, all 100 workers who happened to be U.S citizens or permanent legal residents and instead hire only those who are here illegally or have been legalized under the Gang of 8. The consequences, simply doing the math at $5,000 an employee, mean Joe could save $500,000 a year in tax penalties. Actually the way ObamaCare works, it is a complicated formula where there is an alternative avenue where Joe could well be paying $2,000 per employee minus 30, which would get down, when you factor in the tax savings, to about $200,000. But any way you measure it under ObamaCare's complicated tax penalty formula, Joe could potentially save hundreds of thousands of dollars by firing his U.S. employees--U.S. citizen employees or his legal resident employees and instead hiring those who are here illegally.

That does not make any sense. That is not an incentive anyone rationally would set up. That is what this Gang of 8 bill does. You know, to share how real this incentive is, this penalty for hiring U.S. citizens and legal permanent residents, I wish to read a letter from one of my constituents, Mr. Allen Tharp, who is chairman and CEO of Old England, Lion and Rose Restaurant, Ltd. in San Antonio.

He wrote a letter that reads as follows:

My name is Allen Tharp. Since 1985, I have been the sole owner and CEO of Allen Tharp LLC, as well as the Lion and Rose restaurant chain, and a partner in the Golden Chick restaurants. Our corporate restaurants provide well over 1,000 jobs to fellow Texans, and our franchise restaurants provide many more.

I've been following the current debate over immigration reform very closely and want you to be aware that this bill, coupled with the new ObamaCare legislation, makes it much more affordable for a business like mine to employ Registered Provisional Immigrants than American workers. I do not believe that was the intention of either legislation, but it is the irrefutable effect of both.

ObamaCare, as documented in numerous news stories, already creates an incentive for businesses to cut hours in order to avoid triggering the 50 full-time employee threshold that requires businesses to pay a fine if they do not provide government-approved health insurance. Because of this law, I have been forced to cut back every single hourly employee in each of my companies to no more than 28 hours per week. Cutting schedules from 40 to 28 hours per week has caused some hardship on many employees. However, our choice is to either provide part-time work or no work at all because our business cannot afford to comply with the severe consequences that would be imposed on us under this law if we continue to provide full-time employment to all these employees.

If the current immigration bill before the Senate, however, is made law, a business could hire Registered Provisional Immigrants instead of U.S. citizens and avoid triggering ObamaCare regulations and fines.

Hiring RPIs over American workers, from a purely economic point of view, would be the best thing for my business. I personally do not believe this is the right thing to do. But surely some of my competitors would. ObamaCare and the immigration bill is forcing employers to make extremely difficult choices. I do not want to be in the position of choosing to grow my business or choosing to pay my fellow Americans. I want to do both. ObamaCare and the immigration bill will prevent me from doing so.

This is a real CEO, facing the real incentives of running a business under ObamaCare and looking at what would happen if this Gang of 8 bill passed into law.

What are the potential counterarguments to this concern? Well, in the way of Washington, we do not actually have to predict, because the proponents of this bill have followed a long tried and true path in Washington; namely, they have gone to an ostensibly neutral reporter at a mainstream publication and urged them to ``fact check'' the claim the Gang of 8 bill with ObamaCare would put a penalty on hiring U.S. citizens and legal immigrants. And to fact check, the reporter compliantly gave the answers to the responses that are given by the Gang of 8. But I would suggest that those responses are, on their face, singularly unpersuasive. The first response the Washington Post Fact Checker put up was a claim that Cruz is creating a mountain out of a mole hill because ``the impact on employers is almost too miniscule to be noticed.'' That is a quote from our friends at the Washington Post in their so-called ``fact check.'' The basis of this is they said, well, gosh, there are a lot of companies that do not have 50 employees. The number of companies with more than 50 employees is really small or, as they put it, ``almost too miniscule to be noticed.''

I am going to suggest the claim that companies with more than 50 employees comprise a share of the economy that is ``miniscule'' is facially absurd.

Indeed, if you look at the data, 71 percent of all U.S. employees work in a business with more than 50 employees. So, according to the Washington Post, it is an objective fact that the employers for 71 percent of U.S. employees are ``almost too miniscule to be noticed.'' To put that in raw numbers, that is 80 million employees. I would suggest 80 million employees is, on any measure, not miniscule.

The second basis of the so-called fact check, the second response from the bill's proponents was that, well, under current law it is illegal for a potential employer to ask about a person's immigration status. I would note this is a particularly facile response that almost surely came from a lawyer. As a lawyer myself, I will say it is

precisely the sort of response that causes people to love lawyers as they do, oh, so much in today's society. Because, yes, it is true there is a provision in statute that says: You cannot ask about a person's immigration status and base employment decisions on that. But the statute also requires you to check their immigration status before you hire them. Moreover, there is no provision for employees volunteering this information. If this bill passes, if there is a massive incentive to hire RPIs over U.S. citizens, the simple reality is there will be massive economic incentives for employers to do so.

Let me note this point is utterly irrelevant when it comes to reducing employee hours. Because even if you engage in the ``Alice in Wonderland'' world where employers do not know if an individual is an RPI or a U.S. citizen, once they are hired, as a matter of legal requirement, they do know that. If they are then subsequently making a decision on whose hours to reduce, the overwhelming economic incentive would be to reduce the hours of the U.S. citizen or the legal immigrant rather than those who are currently here illegally.

I want to ask the Presiding Officer, this penalty on hiring U.S. citizens and on legal immigrants, who is this going to hurt the most? Well, it is not going to hurt companies that are doing nuclear science research. It is not going to hurt companies that are designing satellites. It is going to hurt the workers who are working in the sorts of jobs where they face competition from those who are here illegally. It is going to hurt workers, for example, in the fast-food industry. It is going to hurt workers who are working in landscaping, in construction.

Who is it going to hurt the most? If you look right now, today, under the Obama economy, who is being hurt the most by the Obama economy? Those who are the most vulnerable among us. Hispanics today have a 9.1-percent unemployment rate. Hispanic U.S. citizens, Hispanic legal immigrants will be directly harmed by this outcome. African Americans have a 13.5-percent unemployment rate right now under the Obama economy. It has gone up under President Obama. African-American workers will be hurt by this statutory penalty on hiring U.S. citizens and legal immigrants.

Teenagers face an unemployment rate of 24.5 percent. Teenagers, in particular, if you look at jobs, for example, in the fast-food industry, are so often the first or second job a young teenager gets as he or she begins to climb the economic ladder. If Congress passes a bill that puts a major economic penalty on hiring a U.S. citizen or legal permanent resident, he or she may never get that job.

I wish to read a letter from another constituent who is president of Painless Performance, a high-end car parts manufacturer in Fort Worth, TX. The letter reads as follows:

My name is Adrian Murray. I am an immigrant. My parents moved to America from Ireland 55 years ago to seek opportunity and a better life. At the time, new immigrants had to have a sponsor and proof of future employment. I still have the letters written to the INS on their behalf. My parents later became naturalized citizens and raised me to respect America, her customs and her laws.

That was back in the day when being an American citizen was prized. To stand before a judge with hand raised, pledging allegiance and fidelity to America was the dream of millions around the world. We devalue American citizenship by making it a cheap tool for political gain.

My parents taught me to respect America's exceptionalism and therefore honor the institutions of this nation. Because of their example, I have built a successful business with 52 employees. Many of those in my plant are legal immigrants from Vietnam. They, too, came here the right way and endured much hardship to earn their citizen status. What am I to tell them, that their sacrifice was meaningless, that they should have just snuck in, that their citizenship has no value, that the joke is on them?

Well, I would never exercise the option of replacing them with cheaper ObamaCare-exempted workers. Would they not be justified in questioning the motives and validity of a government which would even consider giving an employer that option? What has this nation come to?

It is getting harder and harder to recognize America. A nation which once proudly held fast to the virtues of liberty and freedom is now seriously contemplating a law which amounts to nothing more than thinly disguised human trafficking. Once the world's greatest deliberative body, the Senate is set to vote this bill into law without bothering even to read it. This cannot be. This must not stand.

It is not too late. At the outset of my remarks, I asked unanimous consent to call up my amendment to fix this problem, and the Democrats in this body objected. My amendment would address this problem by providing that ObamaCare shall be defunded until there are no longer any registered provisional immigrants in line. This is the one way to correct this problem, to correct the statutory penalty on U.S. citizens and legal immigrants, if this bill were to pass.

As we have just seen, the majority party has chosen to object to bringing up that amendment. Indeed, so far, we have not had an open debate on amendments on this bill. I would note that a number of proponents of this bill claimed they were going to fix this. Here are a few of the comments sponsors of this bill have made concerning the amnesty tax loophole.

From my friend, the senior Senator of Arizona, Mr. John McCain:

I think that is an issue, and I think that it needs to be addressed.

Also from Senator McCain:

We cannot give people who are not citizens the same benefits; that is the fundamental principle ..... we are trying to work around it so that an American citizen is competitive for a job.

A quote from a senior Democratic aide:

We are willing to work through these issues as the bill works its way through the Senate.

I am sorry to tell you, those promises have not materialized. We haven't worked through these issues. I cannot help but think, with an issue such as this, of the very real impacts it has on so many families. At least in my family that impact would not have been hypothetical.

Fifty-five years ago my father came from Cuba as a legal immigrant. He was 18, and he couldn't speak English. When he arrived in Austin, TX, penniless, he took a job similar to so many other immigrants before him, washing dishes, making 50 cents an hour. I will say the food service industry has provided such an opening portal for millions of Americans and for millions of immigrants from throughout the world.

Yet if the Gang of 8 bill had been law in 1957, along with ObamaCare--my father who couldn't speak English, who was very glad to make 50 cents an hour so he could take that money and pay his way through the University of Texas, go on, get a higher paying job, start a business, and work toward the American dream--my father very well might have been fired because of the Gang of 8 bill, because the impact of this legislation would have been to cost his employer $5,000 for hiring him, a legal immigrant.

I have to tell you, my father's skills at age 18, I wouldn't characterize him as a high-skilled dishwasher. He told me he got that job because he couldn't speak English, and one didn't have to speak English to wash dishes. You had to be able to take a dish and stick it under the hot water.

This incentive would have been a massive incentive on his employer to say: Raphael, I am sorry, you are out of a job because we are going to hire someone who didn't follow the rules, didn't come here legally, came here illegally, because Congress penalizes us $5,000 for you, but it puts zero penalty on that individual who is here illegally. I cannot think of a more irrational, a more indefensible system than a statutory authority for hiring U.S. citizens or legal immigrants.

If this bill passes, a number of things will happen. If this bill passes, African-American unemployment, Hispanic unemployment will almost surely go up. It will be the Senate's fault because this bill will penalize hiring African Americans, U.S. citizens or legal immigrants and, instead, will incentivize hiring those who are here illegally.

If this bill passes, Hispanic unemployment will almost surely go up because this bill penalizes hiring Hispanics who are U.S. citizens or Hispanics who are legal immigrants who followed the rules.

If this bill passes, youth unemployment will almost certainly go up because it is young people in particular who are just beginning the journey up the economic ladder who will be most impacted by Congress deciding to put a $5,000 penalty on hiring that U.S. citizen, hiring that legal immigrant and, instead, give a preference for hiring those here illegally.

If this bill passes, union households' unemployment will very likely go up because it is working-class households that are facing the most direct competition. If that happens, it will be the fault of the Senate.

If this bill passes, unemployment among legal immigrants will almost certainly go up. What this bill says, if you hire an illegal immigrant, the IRS is going to impose a $5,000 penalty on you, the employer. If you don't hire that legal immigrant, if you reduce that legal immigrant's hours, if you hire instead someone who is here illegally, that penalty will go away.

I would suggest that is utterly and completely indefensible. Nobody in this body wants to see African-American unemployment go up. Nobody wants to see Hispanic unemployment go up, youth unemployment go up, union household unemployment go up, legal immigrant unemployment go up. Yet every one of those will happen if this Gang of 8 bill passes without fixing this problem. If that happens, all 100 Members of the Senate will be accountable to our constituents for explaining why we voted to put a Federal penalty on hiring U.S. citizens and hiring legal immigrants. In my view, it makes no sense, and it is indefensible. I very much hope this body will choose to pass my amendment and fix this gray defect in the Gang of 8 legislation.

Thank you. I yield the floor.

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