The administration's budget proposal would add a 10% surcharge to all requests made to US-CIS

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A line item tucked away in the fiscal year 2020 budget proposal could have an impact far beyond the deficit reduction it’s meant to achieve.

The White House fiscal year 2020 budget proposes a 10 percent “immigration services surcharge” that would apply to all requests to U.S. Citizenship and Immigration Services, the agency that runs the legal immigration system. The proposed surcharge, which would add to the fees already collected for visa applications, also was proposed last year.

The surcharge, if implemented, is projected to reduce the federal deficit by $466 million in the first year, and by $570 million in 2029.

The federal budget deficit is projected to hit $900 billion this year and exceed $1 trillion starting in 2022. And with a budget request of $8.6 billion for a border wall, a move to reduce the deficit by $466 million appears insignificant.

In that respect, some say the extra fee seems designed more to drive away immigrants and employers sponsoring foreign nationals to work in the U.S. than to boost the country’s bottom line.

A 10 percent surcharge “seems minimal” but “would have a real detrimental impact on many people who can ill afford these increased filing fees,” said Stephen Yale-Loehr, a professor of immigration law practice at Cornell Law School.

For Center for Immigration Studies fellow David North, the surcharge doesn’t go far enough both in terms of deficit reduction and protecting U.S. workers.

“They put their little toe in the water,” said North, a former Labor Department official in the Johnson administration. “It’s better than nothing,” but “if you’re going to have a big political battle you might as well get several billion dollars out of it,” he said.

Familiar With Fees

Immigrants and employers who sponsor them are no strangers to paying fees.

The vast majority of the USCIS’s operations are funded by user fees, rather than congressional appropriations. The agency adjusts the fees roughly every two years after reviewing costs and revenues, and is planning to do so again this year.

The agency will give the public notice and a chance to comment “should a decision be made to adjust its fees,” agency spokeswoman Jessica Collins said in an email. “No determination has yet been made.”

The agency referred Bloomberg Law to the White House Office of Management and Budget for comment on the proposed surcharge. The OMB didn’t respond to a request for comment.

A surcharge to cut down the deficit is “a disturbing departure” from the USCIS’s typical fee system, immigration attorney Deborah Notkin of Barst Mukamal & Kleiner in New York said.

The agency has never imposed an across-the-board fee increase, she said. And when it does increase fees, it provides a thorough explanation, she said.

By contrast, the White House’s explanation for the proposed surcharge is brief.

“Those who request immigration services derive benefits beyond the direct costs to the Federal Government of adjudicating those requests,” according to one of the budget documents. “Consistent with this, the Budget would ensure that these requestors contribute to deficit reduction.”

‘Dead on Arrival’

The surcharge is likely “dead on arrival,” said Yale-Loehr, who’s also of counsel at Miller Mayer in Ithaca, N.Y. Even the Trump administration thinks “that such a change will only occur with congressional approval,” and “the Democrats would never agree to this,” he said.

But should the surcharge make its way into a broader immigration or government funding package, it could deter employers from sponsoring foreign workers for visas such as the H-1B skilled guestworker visa, he said.

“Some employers already are balking at the high filing fees for needed employees,” Yale-Loehr said. “Adding a 10 percent surcharge will make it even more financially onerous,” he said.

“We may see fewer H-1B petitions being filed as a result,” Yale-Loehr said.

Businesses are already looking elsewhere for talent, Notkin said. “We’re seeing employers trying to avoid the H-1B” in the wake of the administration’s tighter scrutiny of the program, she said.

“We had a broken system before Trump came in” and “now we have an anti-immigration policy that actually makes the broken system worse,” she said.

Small Impact on Deficit

“I don’t know how it’s going to be used” other than as an immigration deterrent, Notkin said.

The proposal is “interesting and creative,” said North, whose organization supports lower immigration levels. “But I wish they would do more,” he said.

By focusing the surcharge on USCIS applications, the Trump administration is targeting immigrants “who are already at least trying to do the right thing” by seeking legal entry to the U.S., North said. That’s not likely to resonate well in Congress, nor will it raise much in the way of revenue, he said.

The administration could raise significantly more money by taxing remittances to other countries, North said. “That would get about four times as much money” as the surcharge, he said.

Or it could block tax rebates to individuals who are found to be using a Social Security number that doesn’t belong to them, which would only penalize undocumented immigrants, he said.