A nonpartisan Congressional Budget Office analysis of the Senate immigration reform bill released Tuesday found major savings to the federal budget and positive economic effects if the bill is enacted, providing a major boost to supporters of the “Gang of Eight” bill.
The CBO found that that changes in direct spending and revenues under the legislation would decrease federal budget deficits by $197 billion over the 2014–2023 period and by an estimated $700 billion over the 2024–2033 period.
CBO also found that the bill would increase the size of the labor force, increase average wages after 2025 (but decrease them before), raise unemployment through 2020, boost capital investment, and raise productivity and capital. The bill would increase inflation-adjusted GDP relative by 3.3 percent in 2023 and by 5.4 percent in 2033. It also shows that average wages for the entire labor force would be 0.1 percent lower in 2023 and 0.5 percent higher in 2033, as the amount of capital available to workers would not increase as rapidly as the number of workers and because the new workers would be less skilled and have lower wages, on average, than the labor force under current law.
Supporters of reform have long argued for the economic benefits of fixing the nation’s immigration system, and the CBO report adds additional credence to those claims. According to the budget office, much of the additional federal revenues would come from new immigrants admitted to the country under a reformed highly skilled immigrant program and other provisions. Additionally, the change in status for current working illegal immigrants, as well as fines and application costs on the path to citizenship are expected to bring in significant revenues.
CBO estimates that the bill would result in a 10.4 million increase in the U.S. population by 2023, with roughly eight million illegal immigrants gaining temporary or permanent status. The budget office estimates that border security efforts authorized by the bill would cost the federal government $5 billion, with an additional $1.5 billion for fencing along the southern U.S. border, and $750 million to expand employment verification programs.
White House Press Secretary Jay Carney heralded the report in a statement Tuesday evening, saying “today, we have more proof that bipartisan commonsense immigration reform will be good for economic growth and deficit reduction.”
“Today’s CBO score of the Senate immigration bill reiterates what economic conservatives have been saying all along: that reform is an economic policy opportunity,” said former Congressional Budget Office Director and Sen. John McCain adviser Douglas Holtz-Eakin in a statement. “With Washington broke and America stuck in a jobless recovery, the CBO report proves that immigration reform would be an unambiguous policy trifecta: higher growth, significantly reduced deficits, and a rational labor policy. This should put to rest any legitimate debate about the economic and fiscal implications of responsible immigration reform.”
The report follows comments by Speaker of the House John Boehner that seemed to pour cold water on the progress being made in the Senate toward comprehensive immigration reform.
“I also suggested to our members today that any immigration reform bill that is going to go into law ought to have a majority of both parties’ support if we’re really serious about making that happen, and so I don’t see any way of bringing an immigration bill to the floor that doesn’t have a majority support of Republicans,” Boehner said Tuesday morning following a meeting with his Republican conference.