The response of welfare states to immigration is a topic of concern for scholars of welfare and scholars of crime and society. Yet, debates about immigration, crime and welfare in academic literature often take place in isolation. This paper advances both literatures by studying the mechanisms that drive both welfare chauvinism and penal nationalism in relationship to each other. Rather than assuming an a priori and abstract negative construction of immigration in political debates, this study draws on a large-scale Critical Discourse Analysis of political and media debates in Denmark to show how immigration is constructed in ways that justify welfare and penal policy reforms. The analysis shows that both policy shifts–towards a two-tier exclusionary welfare system, and towards penal nationalism that reserves harsher punishment for immigrants–are driven by a discourse that constructs immigrants as threatening welfare first, and only secondarily as threatening personal safety. Based on the empirical data, the article argues that anxieties about the impact of immigration on the integrity of the welfare state is what drives and justifies the construction of a two-tiered welfare and criminal justice system.