McCain and Flake Admit Immigration Bill Could Discourage Businesses From Hiring Americans

Does a loophole in the immigration bill mean businesses don't have to provide insurance to immigrants?

Sen. Jeff Flake, R-Ariz., left,  and Sen. John McCain, R-Ariz., listen as they attend an "immigration conversation" on Tuesday, Aug. 27, 2013, in Mesa, Ariz.

Sen. Jeff Flake, R-Ariz., left, and Sen. John McCain, R-Ariz., listen as they attend an "immigration conversation" on Tuesday, Aug. 27, 2013, in Mesa, Ariz.

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Arizona Republican Sens. John McCain and Jeff Flake were forthcoming Tuesday during a Mesa, Ariz., town hall when they were asked whether employers might be driven to hire immigrants over American workers because those individuals wouldn't be eligible for health care under the Affordable Care Act.

"I am not denying that this will be an issue, and will be a problem" McCain said.

[READ: Summer Town Halls Pit GOP Lawmakers Against Tea Party]

The confession stunned some in the audience who expected an architect of the Senate's immigration bill to squash any notion that his bill would displace American workers.

But under the Senate's immigration bill, which passed by a wide margin in June, the 11 million immigrants who entered the country illegally will be eligible for a path to citizenship, but not federal benefits for more than a decade. That means they cannot receive food stamps or housing credits. It also means they are not eligible for the individual mandate under the Affordable Care Act and cannot be penalized for not having health care. Many have interpreted this to mean that employers cannot be penalized for not insuring those workers.

Both Flake and McCain acknowledged the inconsistency "is a problem" that combines two GOP talking points against immigration and health care. One is that the Senate immigration bill will put unemployed Americans at a disadvantage and in direct competition with immigrants who entered the country illegally. The other is that small businesses are hurt by Obamacare, which requires that starting in 2015, employers give employees health care benefits.

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"Both of them knew about the problem, they acknowledged it, and didn't offer a solution," says Mark Krikorian, executive director for the Center for Immigration studies, a group that opposes an increase in immigration.

Overall, however, the town hall went smoothly for Flake and McCain. It was strikingly different from the tense constituent gatherings of the mid-2000s when McCain faced voters enraged about his plan for immigration reform.

McCain even received a round of applause at the end for recounting the story of a naturalization ceremony he attended in Iraq for immigrants who had served in the military.

Immigrants with green cards who serve, are offered an expedited path to citizenship.

McCain said his commitment for immigration reform came when he saw four empty chairs, representing immigrants, who died 48 hours prior to the naturalization ceremony for a country that didn't view them as citizens when they gave their life.

[ALSO: Immigration Advocates Have the Numbers, But Does It Matter?]

"Nothing ever gave me such an appreciation for the service and sacrifice people will go through to achieve citizenship in this country," McCain said Tuesday.

But Krikorian argues that McCain and Flake faced a pre-screened crowd that skewed toward pro-immigrant sympathizers.

"The whole thing looked more managed and more like a D.C. panel discussion than an actual town hall," Krikorian says. "I don't know if constituents would have been throwing tomatoes at them at a town hall or not. But it wouldn't have looked like this. It wouldn't have sounded like this."

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