New federal rules could hurt immigrants and state economy

A federal rule that puts new limits on immigrants considered likely to become overly dependent on government benefit programs could end up costing Hawaii’s economy as much as $127 million, according to a recent analysis.

A divided Supreme Court recently allowed the Trump administration to enforce its controversial “public charge” rule that allows federal officials to deny entry into the U.S. to anyone who might need government aid.

The controversial rule was set to become law in October but was challenged in court by immigrant rights groups and a number of states, including Hawaii.

In the past the federal government considered only cash benefits, such as Temporary Assistance to Needy Families, to determine who was likely to become a public charge.

However, last month’s 5-4 vote by the court’s conservative majority means anyone using or likely to use Medicaid, food stamps and other safety net programs would face greater scrutiny from immigration officials.

The Trump administration has defended the rule as a way to ensure immigrants remain financially self-sufficient, but critics, such as U.S. Sen. Mazie Hirono, say it’s really aimed at closing the door on poor immigrants.

“This rule was intended to confuse and scare immigrant families, and it’s working,” Hirono said on social media after the ruling. “The people who will suffer the most are the poor and vulnerable among us — particularly children.”

Hirono has introduced legislation to prohibit the Trump administration from using federal funding to implement the rule.

Ever since the proposal was first leaked to the press in 2017, critics predicted it would have a chilling effect on legal immigrant families who are eligible for public assistance, causing them to disenroll from, or not apply for, benefits out of fear it would jeopardize their family’s immigration status.

Now a new analysis from Hawai‘i Appleseed Center for Law &Economic Justice has found a 38% reduction since 2016 in the number of these children receiving Supplemental Nutrition Program (SNAP) benefits, commonly known as food stamps.

“It’s not proof, but these numbers seem to indicate there was a sharp drop-off for SNAP by noncitizens,” said Nicole Woo, senior policy analyst for Hawai‘i Appleseed.

In a report, the Kaiser Family Foundation said up to 4.7 million people could withdraw from Medicaid and the Children’s Health Insurance Program if the rule went into effect, putting their health at risk.

The New York-based Fiscal Policy Institute analyzed the rule’s affect on the country as a whole and has estimated that 110,000 people in Hawaii will experience a “chilling” effect. Among that population: 40,000 Hawaii minors, of whom 30,000 are U.S. citizens by birth.

In addition, the institute said states are at risk of losing tens of millions in federal dollars. In considering only health and nutrition supports — the largest benefits targeted by the rule — the organization projected a 25% drop in enrollment in Hawaii and a resulting $66 million loss of federal funds.

Woo said not only will there be fewer federal dollars coming to Hawaii, but there will be fewer program participants spending at grocery stores and other food retailers.

“Hospitals, doctors and nurses will lose income due to a reduction in Medicaid usage. Many other businesses will lose revenue as immigrant families that struggle to make up for the lost nutrition and health care benefits shift spending priorities,” Woo said.

The Fiscal Policy Institute estimated a loss to Hawaii’s gross domestic product by as much as $127 million, with losses of 865 jobs and $10 million in state tax revenue.

The court complaint that state Attorney General Clare Connors signed says the rule would boost homelessness and hunger and result in health coverage losses.

“This federal rule increases the challenges already faced by vulnerable members of our community,” Connors said in a statement. “The government should not intimidate residents who are legally present and who are in short term need of assistance.”