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Is New York rethinking its sanctuary-city status?

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IN MANY PLACES it can take decades, if not generations, to be deemed a local. But as soon as anyone sets foot in the Big Apple, they are New Yorkers, regardless of immigration status or bagel preference. Eric Adams, though, New York’s mayor, has called for a change in the sanctuary-city law. This has triggered a debate on sanctuary cities and worry among immigrant groups. What is a sanctuary city and why is Mr Adams rethinking the policy?

Broadly, sanctuary cities (some 200 cities, counties and states) limit co-operation with immigration authorities: partly through laws and executive orders, but mainly based on the will of local people and the local government. When New York City became a sanctuary city in 1989, it was less an immigration policy and more a public-safety one. The then mayor, Ed Koch, wanted to encourage irregular migrants to co-operate with police when they were victims of a crime or witness to one. In return, their status would not be shared with the federal government. Those arrested were not necessarily handed over to immigration authorities.

Koch’s successors all abided by similar orders. Rudy Giuliani, a Republican who later served as Donald Trump’s lawyer, once said to illicit immigrants, “You’re one of the people who we want in this city. You’re somebody that we want to protect.” In 1996 he sued the federal government to stop city workers from turning over information about unlawful migrants in New York to immigration officials. In 2014 and in 2018 Bill de Blasio implemented measures further limiting co-operation. Police no longer honoured federal requests to detain people. Mr de Blasio evicted immigration officers from city jails. The law allows for exemptions, such as people with recent convictions for certain violent crimes and those on the terrorism watch list. Judicial warrants are obeyed.

Sanctuary cities have “become the litmus test of the attitudes of local jurisdictions toward immigration”, says Muzaffar Chishti of the Migration Policy Institute, a think-tank. The term has become politicised and gets weaponised. Some seem to think immigrants are being hidden from law enforcement in the basements of city halls. After becoming president in 2017 Donald Trump tried to withhold federal funding from sanctuary cities (President Joe Biden later rescinded that order). The strong-arming galvanised Democratic leaders into further protecting their sanctuary cities. But now some may be wavering.

Last year some Chicago lawmakers questioned its sanctuary status, but a move to put a referendum on the ballot was voted down. A few high-profile incidents involving recently arrived asylum-seekers, including the shooting of a tourist in Times Square, appear to have shaken Mr Adams’s resolve. “We need to modify the sanctuary-city law,” he said at a recent town-hall meeting. “If you commit a felony, a violent act, we should be able to turn you over to ICE [Immigration and Customs Enforcement] and have you deported.”

Some fear his comments will lead to mistrust and violence. “He’s intentionally misleading New Yorkers about the impact of immigrants,” says Marlene Galaz of the New York Immigration Coalition, an advocacy group. She says he is also misleading New Yorkers about what sanctuary cities are: the laws protect not just those who have been there for three hours, but also people who have been there for three decades. Some sanctuary-city opponents argue that immigrants increase crime. But new research from Stanford University suggests otherwise. Since 1880 immigrants have not been more likely to be jailed than people born in America. Indeed, immigrants are 30% less likely to be incarcerated than white people born in America and 60% less likely than black Americans.

Since the mayor’s remarks there has been no change in policy. The city-council speaker has no plans to change the laws. But there has been a political impact. Troy Nehls, a Republican congressman from Texas, tweeted that “Democrats don’t even want to live under their policies.” The scheme to bus migrants from border towns to sanctuary cities has been effective. Mr Chishti says that Greg Abbott, the governor of Texas, “has not only weaponised this issue for his own party, but he has changed the politics of the other party as well.”

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Economics

Donald Trump sacks America’s top military brass

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THE FIRST shot against America’s senior military leaders was fired within hours of Donald Trump’s inauguration on January 20th: General Mark Milley’s portrait was removed from the wall on the E-ring, where it had hung with paintings of other former chairmen of the joint chiefs of staff. A day later the commandant of the coast guard, Admiral Linda Fagan, was thrown overboard. On February 21st it was the most senior serving officer, General Charles “CQ” Brown, a former F-16 pilot, who was ejected from the Pentagon. At least he was spared a Trumpian farewell insult. “He is a fine gentleman and an outstanding leader,” Mr Trump declared.

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Germany’s election will usher in new leadership — but might not change its economy

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Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

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Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.  

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.

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