The "anchor baby" thing should be ceased immediately. It should be considered breaking of ANOTHER immigration law - that should then cause the baby to be considered a citizen of its mothers country.
Right. Simply recognize that minors have the same legal status as their parents, regardless of their birthplace. Are the baby's parents US citizens? Then the baby is a US citizen. Are the baby's parents legal immigrants (legal residents)? Then the baby is a legal immigrant (resident). Are the baby's parents here illegally? Then so is the minor in question.
That is consistent with the way legal status is handled for the people that are here legally -- citizens and residents. The way it is done now, when a family immigrates to the US legally, they are legal residents. When Dad and Mom pass their citizenship tests and become an American citizen, any children that came with them that are still minors automatically become citizens, too. Any of their children that immigrated with them that have reached the age of 18 in the meantime have to pass the citizenship tests on their own. Confering the same legal status on minors -- born here or not -- that is on their parents makes all the sense in the world to me, whether they are here legally or illegally.