CBO: Senate Immigration Bill to Save $175 Billion

Wall Street Journal

By Kristina Peterson and Sara Murray

June 18, 2013

http://online.wsj.com/article/SB10001424127887324520904578553873108521026.html?mod=wsj_streaming_stream

The Senate immigration bill would reduce federal budget deficits by $175 billion over the next 10 years and by $700 billion over the following decade, the Congressional Budget Office said Tuesday in a highly anticipated report.

The report could add momentum to the bipartisan bill now before the Senate, by making it harder for opponents to argue that it is unaffordable and that the government will pay too much to provide services for immigrants. The bill would give legal status to millions of illegal immigrants, ease the path for more guest workers and ramp up the enforcement of immigration laws in the workplace and on the border with Mexico.

The bill would increase federal spending by about $262 billion between 2014 and 2023, largely due to the increased costs to the government of refundable tax credits and of Medicaid and other health-care programs, according to an estimate from the CBO, the nonpartisan agency that advises Congress on budget and economic matters. The government would also spend an additional $22 billion over the decade to implement the provisions of the bill.

However, the bill would raise $459 billion in new revenue over a decade as the labor force expands and the government collects more in income and payroll taxes, the CBO projected.

The report comes at a critical moment for the legislation, with Senate leaders pushing for a vote before the July 4 recess. The bill has just advanced to the Senate floor, and senators are debating which amendments to consider before moving to a final vote. The legislation was crafted by four Democratic and four Republican senators.

The bill's drafters had previously said they expected that the bill wouldn't add overall to the federal budget deficit. To pay for some of the legislation's costs, immigrants would have to pay roughly $2,000 in penalty fees over a decade, in addition to processing fees, in order to gain permanent legal status.

CBO estimated that the bill would lead to 10.4 million more permanent residents living in the U.S. by 2023, compared to under current law.

Farther into the future, the growth in the work force would lead to larger savings, the CBO projected. The agency estimated that the bill would reduce the federal budget deficit by $700 billion, or 0.2% of the nation's gross domestic product, between 2024 and 2033, when an additional 16 million people will have joined the U.S. population.

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