Tuesday, July 30, 2024

POLITICO Nightly: The political shockwaves of America's falling birth rates


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By Peder Schaefer

In an aerial view, immigrants wait for transport and processing after crossing the U.S.-Mexico border in Texas.

In an aerial view, immigrants wait for transport and processing after crossing the U.S.-Mexico border on March 13, 2024 in El Paso, Texas. | John Moore/Getty Images

DANGEROUS AND DESTABILIZING — Social Security insolvency. Less economic growth. A smaller and older workforce.

Those are some of the long term economic consequences demographers and economists say the U.S. could face if Donald Trump makes good on a central tenet of his campaign platform — significantly cutting immigration levels and increasing deportations.

The reason why curtailing immigration would send such large shockwaves through the American economy isn’t simply because the nation would be deprived of the economic benefits of immigration. It’s because the effect would be amplified by a much more deeply ingrained and long term trend that’s starting to surface more frequently in political discourse — the consequences of a shrinking population as fewer American families decide to have children.

A new political awareness is growing around America’s record-low birth rate, a debate that’s been turbocharged recently by vice presidential candidate J.D. Vance’s viral comments about “childless cat ladies,” which maligned Americans who don’t have children. Vance has called the issue “catastrophic” for the country.

“If your society is not having enough children to replace itself, that is a profoundly dangerous and destabilizing thing,” he said in an interview with Megyn Kelly on Friday .

But according to economists and demographers, immigration is one available answer to falling fertility rates.

In fact, according to a January report from the Congressional Budget Office , immigration is almost entirely responsible for keeping the population at steady state or growing levels thru 2054, even as the U.S. fertility rate continues to fall.

“I get three or four journalists calling a week now about low fertility and shrinking populations,” said Jennifer Sciubba, a demographer and president and CEO of the Population Reference Bureau. “People are now seeing that this trend is real and speculating about the impacts.”

For the population to stay at steady state or growing levels, the fertility rate typically has to be at least 2.1 children per woman. But after peaking in the 1960s, for decades in the U.S. and many other countries the fertility rate has been falling.

In the United States, the number of births decreased 3 percent from 2022, according to the most recent data collected by the Centers for Disease Control , bringing the rate down to 1.6 births per woman over the course of a lifetime. That’s far below the rate needed to keep the US population at replacement levels.

While many other developed nations are beginning to battle the demographic effects of a shrinking and aging population, the U.S. has been spared so far because of the role new immigrants play in keeping the population at steady state levels, or in some projections, growing, even as the number of native-born births falls.

Jagadeesh Gokhale, a director of special projects for the Wharton Budget Model at the University of Pennsylvania, and a former senior fellow at the libertarian-leaning Cato Institute, has built demographic models that show the huge growth impacts that immigration has had and is projected to have on the nation’s population levels.

According to the modeling , if accounting only for births and deaths the U.S. population would begin to fall in the 2030s, but if immigration into the country is included the population rate stays steady, and even continues to grow throughout the rest of the century.

Gokhale, who also studies the fiscal health of programs like Social Security and Medicaid, said that the modeling makes some assumptions — such as the current surge in immigration will abate in the next few years — and he acknowledges that it’s difficult to get exact numbers about the extent of immigration, especially illegal immigration.

“Immigration helps fill in the gap,” he said, adding that the fertility rate has dipped even further below the replacement rate since the Great Recession. “If that [immigration] rate is sustained, it will help maintain population growth… All of these factors suggest that immigration, at least in the next few years, is going to be a factor that will offset the low fertility rate that we project.”

For programs such as Social Security, another important factor is the ratio of workers to retirees. If there aren’t enough workers paying into the system on a consistent basis, it makes it more difficult for the programs to stay solvent. Immigrants typically enter the country at a younger age, and so are able to contribute to the programs for decades, Gokhale said.

“More people and more workers means more tax revenue,” he said. “That means benefits to retirees will be funded better. Fewer immigrants and fewer workers means it will be more difficult to fund these programs.”

And that’s to say nothing of economic growth. More people means more productivity, and higher gross domestic product. In the most recent outlook from the Congressional Budget Office , economists said that rising immigration would increase the growth rate of gross domestic product by 0.2 percent throughout the next decade by increasing the available labor force. That’s $7 trillion in growth over the next decade generated by immigration, equating to $1 trillion in tax revenue.

“There’s a long economics literature that documents the benefits that immigrants have to the economy,” said Tara Watson, an economist who studies immigration at the center-left Brookings Institute. “Immigrants create demand as well as supply in labor. They’re demanding goods and services, and are providing growth.”

And while Watson said that it’s difficult to track exactly how many immigrants are paying into the tax system due to the illegal nature of much immigration, she said most immigrants in the most recent surge at the border had work permits, and thus were putting money into government coffers.

There’s not as close a tie between reduced immigration and a possible spike in inflation, as some liberal commentators have tried to draw. Instead, reduced immigration impacts decrease the demand for goods and services while also decreasing the available labor supply, making it difficult to say if reduced immigration would spike prices.

That said, if immigration does decline under a second Trump presidency, Sciubba said that the economic and social impacts of an aging and shrinking population — or the threat of one — might quickly surface as a contentious issue.

“What’s on my radar is, ‘If immigration falls but there’s a growing awareness about population aging and low fertility, what are the government policies that follow to encourage more births?’”

Sciubba said she was watching closely the possibility of policies limiting access to contraceptives, Elon Musk’s support for natalism and the possible political backlash if politicians pursue pro-natalist policies.

“And those policies may not lead to more births but they will lead to a more fractured America,” she said.

Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com . Or contact tonight’s author at pederschaeferwriting@gmail.com .

What'd I Miss?

— Israel’s military says it struck Beirut, targeting Hezbollah commander:  The Israel Defense Forces said it carried out an airstrike in the Lebanese capital of Beirut , a significant escalation in the long-running conflict between Israel and the militant group Hezbollah that European capitals fear could quickly snowball into a regional conflict. The IDF said on X that it was targeting the commander responsible for a rocket attack in the Israeli-occupied Golan Heights on Saturday that struck a football pitch, killing 12 children and youths from the Druze minority community. Israel and the United States have attributed the attack to the Hezbollah, which has strongly denied any involvement.

— Top FBI official confirms there is 'absolutely no doubt' Trump was hit by a bullet:  FBI Deputy Director Paul Abbate said today that there was “no doubt” that former President Donald Trump was struck in the ear with a bullet during an assassination attempt at his July 13 rally. “There is absolutely no doubt in the FBI’s mind whether former President Trump was hit with a bullet and wounded in the ear. No doubt, there never has been,” Abbate said when Sen. John Kennedy (R-La.) asked if Trump was hit with a bullet.

— Acting Secret Service director blames local law enforcement for key failure in Trump shooting:  Acting Secret Service Director Ronald Rowe angrily suggested at a Senate hearing today that local law enforcement was primarily to blame for a shooter getting access to a building where he attempted to assassinate Donald Trump. “We were told that building was going to be covered. There had been a face-to-face that afternoon. … Our team leads met,” Rowe said at a joint Senate committee hearing. He added he had personally laid on the roof to assess what the shooter could have seen. “I cannot understand why there was not better coverage or at least somebody looking at that roofline when that’s where they were posted.”

— Anita Dunn to depart White House:  Long-time Joe Biden adviser Anita Dunn is leaving the administration , the first of his tight inner circle to depart the White House since he dropped his reelection bid. She plans to advise Future Forward, the largest super PAC supporting Vice President Kamala Harris’ campaign.

Nightly Road to 2024

PROJECT 2025 SETBACK    Paul Dans, who directed the Heritage Foundation’s controversial 2025 Presidential Transition Project, or Project 2025, is stepping down from his role in August , according to an internal email to staff and one person familiar with the matter. Dans’ departure does not mean the project, which has been repeatedly criticized by Democrats as well as Donald Trump, is shutting down. The work of Project 2025 — which includes policy and personnel prescriptions for a Republican administration — will continue, according to a person familiar with the project who was granted anonymity to discuss the matter.

JOSH SHAPIRO IS A BIG MISTAKE AS VP! 

DO YOUR RESEARCH!

THE POLITICS OF FRACKING  — Vice President Kamala Harris’ decision to reverse her support for a fracking ban is doing little to ease concerns among the fossil fuel industry and its workers — and cheerleaders for Pennsylvania Gov. Josh Shapiro see an opening. Some Democratic Party allies fear Harris’ flip on fracking has still left her particularly vulnerable in Pennsylvania. What Harris needs now, the party’s boosters say, is someone like Shapiro — who has carved a middle ground in the country’s No. 2 natural gas-producing state — in the vice presidential slot.    

NO! DO YOUR RESEARCH! BIG MISTAKE!

AD WARS — The Harris and Trump campaigns both launched attempts to define the all-but-certain Democratic nominee with major new television advertisements out today, the first since President Joe Biden dropped out of the presidential race.

A new 60-second ad from Harris, titled “Fearless,” is heavy on biographical details, portraying her ascent to the vice presidency as a yearslong crusade of holding banks, drug companies and criminals accountable as a prosecutor. Meanwhile, former President Donald Trump is going all-in on the “border czar” tagline, attacking Harris as “failed, weak and dangerously liberal” in two 30-second spots that include footage from Harris’ 2021 interview with NBC News’ Lester Holt in Guatemala, where she was criticized for dismissing a question about why she hadn’t visited the U.S.-Mexico border.

‘YOU’RE A FOOL’  — Former President Donald Trump today escalated his attacks on Jewish Democratscalling them “fool[s]” while attempting to undermine prominent Jews in the party .

“Any Jewish person that voted for [Vice President Kamala Harris] or [President Joe Biden] … should have their head examined,” Trump told conservative radio host Sid Rosenberg in a live interview. “If you love Israel — or if you’re Jewish, because a lot of Jewish people do not like Israel … If you’re Jewish, if you vote for a Democrat, you’re a fool, an absolute fool.”

AROUND THE WORLD

The infrastructure on the venue of the swimming portion of the Paris 2024 Olympic Games triathlon, next to the Alexandre III bridge.

The infrastructure on the venue of the swimming portion of the Paris 2024 Olympic Games triathlon, next to the Alexandre III bridge, today. | Thibaud Moritz/AFP via Getty Images

POLLUTION PROBLEMS  — This morning, athletes should have been thrashing down the River Seine in Paris, battling to come out on top of the Olympic triathlon's first leg: 1,500 meters of open water swimming.

Instead, not a single swimmer was in sight. The reason? Once again, the Seine was too polluted to swim in . In a press release published at 5 a.m., just three hours before the race, World Triathlon announced the men's trial was postponed to Wednesday for “health reasons,” after water testing “revealed water quality levels that did not provide sufficient guarantees to allow the event to be held.”

The news, which followed the cancellation of two training sessions in the river for the same motive, prompted furious reactions from triathletes, who had gotten up before the crack of dawn in hope of competing.

The resurrection of public swimming in the Seine, which has been banned for 100 years because its waters are filled with hazardous bacteria, is a decades-long dream of French politicians. It is meant to be one of the Games’ great legacies for Parisians, who will supposedly be able to swim freely in the river starting next year.

MEMBERSHIP MOMENT   Israel’s Foreign Minister Israel Katz has demanded that NATO expel Turkey over President Recep Tayyip Erdoğan’s threats to send troops into Israel .

“In light of Turkish President Erdoğan’s threats to invade Israel and his dangerous rhetoric, Foreign Minister Israel Katz instructed diplomats … to urgently engage with all NATO members, calling for the condemnation of Turkey and demanding its expulsion from the regional alliance,” the Israeli foreign ministry said Monday according to media reports.

Erdoğan told a meeting of his ruling Justice and Development Party (AKP) earlier on Monday that Turkey “must be very strong so that Israel can’t do these ridiculous things to Palestine.”


Nightly Number

€475,000

The price of a dinner that France hosted for the U.K.’s King Charles III last year (equivalent to $513,000), according to a yearly audit of the office of President Emmanuel Macron. The office ran a record high deficit in 2023.

RADAR SWEEP

DOPING DETAILS   What constitutes “doping,” or an unfair advantage, in sports? It’s a question that’s pervading the Olympics this year. While the traditional idea of doping involves using banned substances like steroids to enhance athletic performance (something that the Olympics attempts to rigorously test for), there’s a new phenomenon known as “technological doping.” It involves using equipment on your body that can enhance performance — and it’s the subject of significant debate. For example, this year’s Olympics involves the debut of so-called “super spikes,” which are cleats that can help a sprinter’s performance. The sport’s purists decry these spikes, while others say they’re simply an innovation that can aid performance (and available to any athlete). Bree Iskandar investigates for Scientific American.

Parting Image

On this date in 1991: President George Bush and Soviet President Mikhail Gorbachev gesture as they walk inside the Kremlin during a break in meetings.

On this date in 1991: President George Bush and Soviet President Mikhail Gorbachev gesture as they walk inside the Kremlin during a break in meetings. | Marcia Nightswander/AP

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