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YOUR BOTTOM LINE
Compromising on Immigration; Return of the Housing Market
Aired January 26, 2013 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, HOST: Thanks, you guys. See you at the top of the hour.
Good morning, everyone. I'm Christine Romans.
There are signals that we're finally reaching the end to the partisan dysfunction in Washington -- debt ceiling, budget, spending cuts. Imagine if we weren't focused on short-term crises and Washington could focus on big ideas to fix long term problems and create jobs. Where would they begin? Immigration reform, but probably not for the reasons you'd think.
ROMANS (voice-over): An emerging consensus on immigration.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Our journey is not complete until we find a better way to welcome the striving, hopeful immigrants who still see America as a land of opportunity.
SEN. MARCO RUBIO (R), FLORIDA: For those of us who are born and raised in this country, sometimes it becomes easy to forget how special America is.
ROMANS: The public seems ready, 53 percent now say it's time for a pathway to citizenship for illegal immigrants.
DAVID PLOUFFE, WHITE HOUSE SENIOR ADVISER: This is the moment. The stars seem to be aligned to finally get comprehensive immigration reform.
ROMANS: There was a moment like this in 2005. That moment passed, but the stereotypes remained.
CARTOON CHARACTER: They took our jobs!
ROMANS: Even now, cartoons like "South Park" articulate the fear some Americans feel, and reality shows like "Border Wars" show how far some will go for a shot at the American dream.
It's up to this bunch to decide what immigration reform really is.
UNIDENTIFIED MALE: It's certainly racist in its effect.
UNIDENTIFIED MALE: I'm personally insulted that anyone would use even loosely the term of racism.
ROMANS: Game on. I've got two of the smartest political minds on this network with me this morning. Ron Brownstein is a senior political analyst here at CNN. He's also the editorial director at the "National Journal". And Ana Navarro is a CNN contributor and Republican strategist.
Good morning to both of you.
RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Good morning.
ROMANS: Harry Reid says it's a top priority for Democrats this year. Ron, let's put everything else aside, gun violence, job bills, debt, budget debates, Obamacare in the first term -- all of that aside. Is immigration -- the stars really aligned like David Plouffe says?
BROWNSTEIN: I think the odds are better for this than almost anything else on the big ticket items on President Obama's second term agenda. But that still doesn't guarantee it gets done.
Basically, you've got a situation where the Democratic Party has coalesced to a greater degree than in the past around immigration reform and there is now a clear and present compelling political interest for Republicans to get something done after an election which Mitt Romney lost 71 percent of Hispanic voters, despite an unemployment rate in double digits among Hispanics.
The problem is, as it was in 2005-2006, will be the House --
BROWNSTEIN: -- where there are very few House Republicans in districts with meaningful Hispanic population and the likely outcome is that the only way this gets passed is if John Boehner is willing to pass a bill that a majority of House Republicans oppose. And that will be a he challenge in it.
But I do think there is more of a tailwind than there has been, and there's a political interest for both parties in getting this done.
ROMANS: You mentioned 2005 and 2006. I'm going to back even further. I want to bring in the last two big pushes for immigration reform.
In 1986, Ronald Reagan fixed the problem of illegal immigration by this. Three main parts: employer sanctions, border enforcement and legalization for unauthorized immigrants.
About 2.7 million people received permanent residency as a result of that amnesty -- a word that politically no one wants to use anymore. Since then illegal immigration continued. Fast forward to 2005, and all Congress and the Bush administration could agree on was building one big fence.
Ana, why is today's immigration debate different than it was in 2005?
ANA NAVARRO, CNN CONTRIBUTOR: I think the politics is different but also there's a national security component that was not there, you know, when Reagan did his amnesty in 1986. It is now a national security imperative, Christine, to know who is here, to bring them out of the shadows and also a national security imperative to secure the border.
This is not optional. I think Ron is completely right in what he's saying. You know, look, the Democrats have a huge debt of Latino voters and the Republicans understand they have a huge need for Latino voters. And those -- the combination of those two things are working for immigration reform.
We are seeing in the immigration issue what we're not seeing on any other issue, which is that there is a unique, independent congressional group on both sides, on the House and the Senate, Democrats and Republicans that have been working independently on their own for months now, developing a bipartisan agreement. That is unique in Washington today.
ROMANS: Now, we also know that when we talk about comprehensive immigration reform, Ron, that is -- three words that mean different things to different people, right?
BROWNSTEIN: Yes, right.
ROMANS: And I've said earlier, a couple of strategists have told me don't use amnesty, it's pathway to citizenship. They've been down this road. And it was difficult to sell in 2005.
So, tell me --
ROMANS: -- specifically what comprehensive immigration reform actually looks like. Does it look like amnesty? Is there a high-tech component where we allow more people to come in, study here and stay here? What's in it?
BROWNSTEIN: Well, comprehensive immigration reform has three or four major components that have been described that way, really, since the middle part of this decade.
One is tougher enforcement on the border, so is tougher enforcement in the workplace, with some kind of electronic high tech system to clarify and identify whether people are here legally before they work. Some kind of guest worker program, which is critical to bringing in business. Some kind of high-tech -- increasing the number of people who are here, who can come and stay if they get advanced degrees. And then, finally, a pathway to citizenship or as conservatives would call it, amnesty.
The politics are very similar now to 2006. Just as in 2006, we see a broad coalition developing with labor, the Chamber of Commerce and church groups. And people forget in 2006, two -- almost two dozen Senate Republicans voted for a bill that included all of those elements, including a pathway to citizenship. It died because the House Republicans would not bring it up. I think you could see a very similar situation this year where I think it is likely you could get 60 votes or something like that in the Senate.
And the critical question once again will be: will House Republicans bring it up even if most of them oppose it?
ROMANS: Well, I want to go back to something Ana was saying about the debt -- the debt the Democrats have to the Latino vote and the need that Republicans have for it. I mean, you look at the exit polling, and it's incredibly clear, Obama got a whooping 71 percent of the Latino vote. Mitt Romney received just 27 percent. In 2008, Obama took home 67 percent, McCain did a little better with 31 percent.
Let's go back to George Bush in 2004. He got 44 percent and won the election. Kerry, who lost, pulled in 53 percent.
My point is, this demographic is incredibly important. Latinos for the first time topping double digits, 10 percent of the voter base.
So, Ana, those House Republicans have to be very, very careful if they want to be relevant.
NAVARRO: They know that, Christine. I just spent three days with the Republican House conference at their retreat in Williamsburg, Virginia.
And this was a big part and a big theme of the three-day conference. We need to do better with minorities. We need to do better specifically with Hispanics.
We need to change the tone. We need to have a message. They absolutely know it.
I left there feeling a very much more optimistic Republican than when I got there because I heard a better reception. I heard an acknowledgement. I heard a desire to do something from a vast majority of the Republicans that were there.
And I think John Boehner, going back to the issue that he's going to have to be on board, I think he is on board. I've had conversations with him about this and I believe that he understands just how important this is to do.
So, this is -- you know, we are in a better place. It's still going to require threading the needle. Immigration will never be an easy subject to do. And not even conservatives are calling it amnesty.
Interestingly enough --
NAVARRO: -- Senator Marco Rubio just a few days ago came out with his own plan, advancing, you know, preempting President Obama. And he's gotten great reviews from some of the most conservative members of the base and the conservative influentials. In fact, he's also gotten good reviews from the White House.
When was the last time you saw that happen?
ROMANS: I know.
NAVARRO: So, you know, we're in a pretty good place. It's got to be comprehensive because in a comprehensive plan, there is something everybody can find. There's at least one thing everybody can find to love and at least one thing everybody can find to hate.
ROMANS: Ana Navarro --
NAVARRO: That's going to be sticks and carrots.
ROMANS: That's politics for you, right? That is politics.
And the consensus emerging in Washington, on immigration reform. Why is a money show talking about immigration? I'll tell you both right now, is because it's about jobs, growing an economy and getting kind of a broken immigration system out of our way and immigration system for the 21st century.
Ron Brownstein, Ana Navarro, we'll be talking about it again. Thank you. Have a great weekend.
NAVARRO: Thank you.
BROWNSTEIN: Thank you. Yes.
ROMANS: America thought it had fixed a broken immigration system before, giving 2.7 million people a pathway to citizenship.
(BEGIN VIDEO CLIP, NOVEMBER 6, 1986)
RONALD REAGAN, THEN-U.S. PRESIDENT: Future generations of Americans will be thankful for our efforts to humanly regain control of our borders and therefore preserve the value of one of the most sacred possessions of our people: American citizenship.
(END VIDEO CLIP)
ROMANS: Here we are again. Why fixing it again could be the key to the jobs boom we desperately need.
ROMANS: Call me skeptical, but when politicians opine about comprehensive immigration reform, they're wooing voting blocs. But immigration reform done right is not about elections. It's about jobs.
ROMANS (voice-over): The debate over immigration reform comes down to this not so simple question: do we favor families or skills?
Our future depends on science, technology, engineering and math. About a third of graduate students in STEM are foreign born, studying here on temporary visas. After graduation, many who want to stay are not allowed to. Every 100 foreign-born STEM graduates who stay in the U.S. create an average 262 jobs. Half of start-ups in Silicon Valley and a quarter nationwide were founded by immigrants.
If America is going to lead the next century, it has to grow these kinds of jobs. The trick is staying true to America's compassion, too.
ROMANS: Our Canadian neighbors have no quotas for skilled immigrant workers. They actually seek them out.
The U.K. is becoming more selective, offering admission to the country based on a points system.
China, it doesn't have any special laws dealing with foreign workers. That's actually a pretty new phenomenon over there. Usually, China sends workers around the world. Now they're giving people coming there looking for jobs. They issue a small number of green card equivalents to friends of the communist party in China, but most workers there are in an unregulated environment.
I want to bring in Vivek Wadhwa. He's the author of "The Immigrant Exodus: Why America is Losing the Global Race to Capture Entrepreneurial Talent". He's also a Stanford University Law School fellow and a director of research at Duke University.
Welcome to the program. So nice to see you today.
I want to ask you, you know, can America lead the world with its current immigration rules and quotas? What should immigration reform look like?
VIVEK WADHWA, DUKE UNIVERSITY: See, right now, we're losing the war. What's happening is that we've brought in hundreds of thousands of really smart people from all over the world to study here. We educated them and gave them experience in working for our companies and innovating like we do.
Now, we're telling them, sorry, we don't have enough visas for you. Go back home. They're doing that.
You have, you know, tens of thousands of people going back, hundreds of thousands of people have already gone back, who are now starting companies in India, China, and Brazil, all over the world. The start-ups and the economic growth that should be here in America is happening abroad, because of our mindless immigration policies.
ROMANS: So what about --
WADHWA: You know, we keep talking about the unskilled, undocumented -- I'm sorry.
ROMANS: Go ahead. Finish your thought.
WADHWA: So, these are the legal -- these people are here legally. We're talking about doctors, scientists, engineers, researchers, people who came here legally, lawfully. We brought them in over here. Now we're sending them away.
ROMANS: So, let me ask you this because if you talk about the H-1B visa program, that's a nonimmigrant visa, right? That's meant to come here, study, work, right? It's not a path for a green card.
ROMANS: So, do we need to remake the whole system? Because you want these people to come and stay and invest and live.
WADHWA: Absolutely. Absolutely.
If we bring smart people here, we want them to come here as Americans, we want them to think like us, be like us. We want them to start companies like Silicon Valley entrepreneurs do.
We don't want them to come here like temporary farm workers. You know, when farm workers go back, we lose the labor.
When skilled workers go back, we lose the intellectual property, we lose the talent, we lose the ability to innovate. That's what the problem is.
ROMANS: Well, many people argue that some of these worker category, worker visa categories, it favors the employer not the employee, that people can't get ahead, especially in some of those agriculture worker categories. There's been a lot of concern about how the workers are treated.
ROMANS: That's a subject for another time.
But let me pose you these numbers.
ROMANS: America granted 1.1 million green cards in 2011. Almost 700,000 people became new Americans. There's a cap on H-1B visas if 65,000. But when you add it all up, we granted 269,000 applications in 2011.
So, I guess you look at those numbers, why isn't America the most generous, open country in earth? Those are bigger numbers than any other country has.
WADHWA: Well, as a percentage of population, Canada imports more skilled immigrants. Australia imports more skilled immigrants than we do. You also have to realize what's driving our economy's technology.
I'm in Silicon Valley. This is the epicenter of innovation in the world, 52 percent of the start-ups are founded by immigrants, by people like me, born abroad, who want to come to America and contribute to its success.
So we want more of these people. Of that 1 million immigrants you talked about, only 140,000 were skilled immigrants. Why not bring in half a million skilled immigrants and let us start companies over here, uplift the economy, make the pie bigger, create jobs so that we don't have the recession that we're suffering through.
ROMANS: The trick here --
WADHWA: We can do it. It's very easy. All we have to do is fix the laws.
ROMANS: The trick here will be doing this in a compassionate way so that you don't have the optics in Washington where you're favoring skilled, educated workers and you're not favoring any more the families of people who are already here, because American immigration really has been based on family ties until now. It's a hard sell to tell people, you know what? We're going to be favoring a different group of immigrants than the groups we have historically.
WADHWA: I agree. It shouldn't be either/or. We need the families and the skilled workers.
But what I'm saying is that we need the skilled workers more than ever because our economy is in a slump. Let's get them to start companies and boost the economy and employ more Americans. And also bring in the -- you know, the undocumented, unskilled workers and solve the bigger problem.
ROMANS: All right. Vivek Wadhwa, thank you so much. The book is called "The Immigrant Exodus." Very interesting stuff. And we'll talk to you soon, because I have a feeling that in 2013, we're going to be talking a lot more about comprehensive immigration reform.
WADHWA: I agree.
ROMANS: Thank you so much, sir.
All right. The American dream, a home of your own, the big backyard, the white picket fence. After the devastation of the last five years, I'll show you three ways to make money in real estate again.
ROMANS: You've heard of the year of the dragon and the year of the rat. And now, economists at Deutsche Bank say 2013 will be the year of the house. Housing has been one of the few sectors of the economy to be clearly in recovery.
Americans bought 4.7 million homes last year, up nearly 10 percent. That makes last year the best year for home sales since before the recession began in 2007. The National Association of Realtors says this year will be even better.
Another sign the market is improving -- homes aren't spending quite so long up for sale. About 73 days on the market. That's down from 99 days a year ago.
So, what's driving this recovery? Well, more Americans are finding work. The economy added 1.8 million jobs in 2012. Home prices bottomed out in 2012, and they're rising again.
Sales of distressed properties dropped, as well. That helped push median home prices up, up more than 6 percent last year, strongest gain since 2005.
And mortgage rates remain near record lows. Rates fell steadily last year. Today, the average rate for a 30-year fixed mortgage is around 3.4 percent. All those factors make this a great time to buy and a great time to refinance.
ROMANS (voice-over): Same condo, same owner, three different interest rates in just three years.
SHAWN BRECK, REAL ESTAGE AGENT: November 2009, 5.125 percent; November 2010, refinanced and it was 4.25 percent. Now, 3.6 percent.
ROMANS: Real estate agent Shawn Breck bought his condo back in 2009.
BRECK: It's 650 square feet, 15-foot ceilings.
ROMANS: Since then he's refinished twice, sticking with a 30- year fixed rate mortgage.
BRECK: My first refinance, my mortgage payment dropped about $350 a month. From there, it will drop another possibly $400 a month.
ROMANS: Sinking mortgage rates save him $750 a month.
Rates have fallen from almost 4 percent to around 3.3 percent in the past year. Just a couple years ago, 6 percent was considered super low and once-in-a-lifetime.
ROMANS (on camera): If you're sitting on a mortgage right now that is 5.25 percent or 6 percent, what should you be doing?
BOB MOULTON, PRESIDENT, AMERICANS MORTGAGE GROUP: You should be calling your loan officer.
ROMANS: You shouldn't have to worry of a 30-year fixed at 5.5 percent?
MOULTON: You should not be above 4.5 percent right now.
ROMANS (voice-over): But lenders aren't passing the cheap money around like they were at the peak of the housing bubble.
(on camera): Who should be refinancing then?
MOULTION: Anyone who has equity in the house, who is working, can show a good credit score and has money in the bank.
BRECK: After they ran my credit, all they needed was my last year's tax forms. And then it was a matter of formality of signing the paperwork and doing it.
ROMANS: Step number two, run the numbers.
MOULTON: You have to do the economics to make sure that you're recouping your closing costs within the amount of time that you're going to stay in the house.
ROMANS: And stop procrastinating. If you qualify, the sooner you close, the sooner you save.
BRECK: Seems like a no brainer to me. If you can save -- I mean, if you can save even $100 to $150 a month, it seems worth it.
ROMANS: Coming up, housing is coming back, the stock market near five-year highs. Now, we need just one more thing to call it a true recovery. What do you think that thing is?
ROMANS: So I just told you about the milestone in the housing market. Here are the winners in real estate now -- refinancers, first-time home buyers, cash investors, and flippers.
Last year was the best year for housing since 2007. This year is forecast to be even better.
The same time, the Dow and S&P 500 also hit five-year highs. Back to levels last seen before the great recession walloped the market and the economy. Many of you missed the big stock market rally, though, last year, only recently pouring money back into the market.
It's human nature. You need convincing before you feel comfortable investing. By the time you're convinced, the money has already been made.
You're fearful when you should have been greedy. But don't take my word for it. After all, I'm no Oracle.
(BEGIN VIDEO CLIP)
WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: You wanted to be greedy when others are fearful. You want to be fearful when others are greedy. It's that simple.
(END VIDEO CLIP)
ROMANS: It's that simple. That's billionaire investor Warren Buffett.
Two things drive stocks -- fear and greed. Take a look at the CNN Money fear and money index. It shows extreme greed is moving the market. A week ago, same thing. But a month ago, it was neutral.
The stock market winnings are disconnected right now from what you're talking about around the kitchen table, right? The American money conversation is still about jobs -- finding one, getting a better one, succeeding in your career.
The president has been hired, rehired now for four more years for his job. In his inaugural speech this week, he mentioned your job prospects a handful of times. So, while Washington pivots to debt negotiations, immigration reform, gun control, the only thing, the only thing that will truly build this president's legacy -- meaningfully growing jobs this year.
Stocks are up, housing's coming back. It's robust jobs growth we're still waiting for.
Are you feeling the recovery?
Find us on Facebook and twitter, our handle is @CNNbottomline, my handle is @ChristineRomans.
I'll be back at 1:00 on "YOUR MONEY" with Ali Velshi.
Ali is going to interview the House Majority Leader Eric Cantor about the budget, our debt, the way forward in Washington. We're going to discuss why Congressman Cantor might just be the most powerful Republican in Washington.
"CNN SATURDAY MORNING" with Randi Kaye continues now.