CBO: Senate Immigration Bill Would Reduce Deficits, Boost Economy
We’ve issued an analysis of the Congressional Budget Office’s (CBO) estimate of the budgetary impact of the immigration reform bill before the Senate and its companion analysis of the economic impact of the legislation. Here’s the opening:
CBO estimates that the bill would significantly reduce deficits over each of the next two decades — by $197 billion in the first decade, fiscal years 2014-2023, and by about $700 billion over the second decade — because higher tax payments from immigrants would exceed the increased costs resulting from the bill, such as for federal benefits for some legal immigrants and increased border security.
The bill would expand the economy by increasing the population and labor force, CBO found, thereby boosting gross domestic product (GDP) by approximately 3.3 percent in 2023 and approximately 5.4 percent in 2033. (These percentages are the midpoints in range projections that CBO provides.) Average wages would grow slightly more slowly in the short term than they otherwise would, as the economy adjusted to the larger workforce. This partly reflects the fact that the immigrants who would come in under the bill will have lower wages, on average, than current residents, and does not necessarily imply that current residents would be worse off. By 2025, however, the bill would raise average wages above what they would otherwise be across the wage distribution.