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HomePolicyCBO Estimates that Immigration Reform Bill Would Shrink Deficit

CBO Estimates that Immigration Reform Bill Would Shrink Deficit

Sen. Marco Rubio, R-Fla., flanked by Sen. Charles Schumer, D-N.Y., left, and Sen. John McCain, R-Ariz., right, speaks as immigration reform legislation by the Senate’s bipartisan “Gang of Eight” that would create a path for the nation’s 11 million unauthorized immigrants to apply for U.S. citizenship, Thursday, April 18, 2013, on Capitol Hill in Washington. (AP Photo/J. Scott Applewhite)

The bipartisan immigration reform bill currently under consideration in the Senate would supposedly shrink the deficit by $197 billion over the next decade and $700 billion during the 10 years that followed, the “non-partisan” Congressional Budget Office estimated in a report released Tuesday.

The “gang of eight” bill, which lawmakers passed into the debate phase last week, would allow undocumented immigrants a path to citizenship, triggered by improvements to border security. It would also rework the legal immigration system and require more policing of unauthorized immigration within the United States.

The CBO report estimated that the Senate immigration reform bill would result in a net increase of 10.4 million people living in the United States by 2023. The economic impact is estimated to be largely positive. CBO and the Joint Committee on Taxation estimated that the bill would decrease deficits by $197 billion and cost $22 billion to implement over the 2014-2023 period.

According to the report, over the next decade the bill would lead to a $262 billion increase in federal direct spending, including on Medicare and Obamacare. But it would also increase federal revenues by $459 billion, CBO estimated.

“This report is a huge momentum boost for immigration reform,” gang of eight Senator Chuck Schumer (D-N.Y.) said in a statement:

This debunks the idea that immigration reform is anything other than a boon to our economy, and robs the bill’s opponents of one of their last remaining arguments. Immigration reform is not only the right thing to do to stay true to our nation’s principles, it will also boost our economy, reduce the deficit and create jobs.

White House Press Secretary Jay Carney called the nonpartisan report “more proof that bipartisan commonsense immigration reform will be good for economic growth and deficit reduction.”

The report looked beyond the 10-year period that the CBO typically considers in estimating the cost of bills, which immigration reform opponents, like Sen. Jeff Sessions (R-Ala.), encouraged.

Sen. Jeff Sessions R-AL, dismissed the CBO report in a statement after its release:

The bill’s drafters relied on the same scoring gimmicks used by the Obamacare drafters to conceal its true cost from taxpayers and to manipulate the CBO score. … [T]he score effectively conceals some of the biggest long-term costs to taxpayers contained in this legislation, including providing illegal immigrants with Medicaid, food stamps, and cash welfare.

The Heritage Foundation, according to the leftist Huffington Post “came under fire for a misleading study that put the cost of the bill at $6.3 trillion over the next 50 years.” They wrote in a blog post earlier this last week that it would be misleading if the CBO only looked at 10 years. The bill’s impact changes significantly after the 10-year mark, when some undocumented immigrants would become legal permanent residents and eventually citizens. Again, the Huffington Post refers to this period, as “when increased security measures likely would already be in place.”

Security measures likely would already be in place?

The CBO eventually opted to look at a 20-year period. By 2033, the CBO estimated a net population increase of 16 million. With spending and revenues combined, the bill would lead to a $700 billion decrease of the deficit between 2024 and 2033, according to the report.

Sen. Marco Rubio (R-Fla.), another member of the gang of eight, said the CBO score shows his arguments about the economic merits of reform were valid.

The CBO has further confirmed what most conservative economists have found: Reforming our immigration system is a net benefit for our economy, American workers and taxpayers. There remain some key areas that need to be tightened up to prevent those who have violated our immigration laws from accessing federal benefit programs. But overall, the CBO report offers encouraging evidence that the status quo is unacceptable and we can end it without burdening our already burdened taxpayers and, in fact, reduce the deficit over the next 20 years.

Heritage’s Derrick Morgan wrote yesterday about the CBO’s selective time period:

The CBO report also does little to assuage concern that the amnesty portion of the bill would be very costly to U.S. taxpayers. It provides only a look at the first 10 years in any real detail. (It includes only a sketch of the second 10 years.)

Commentary from the Blogger

While Heritage and CBO could go back and forth with politicians in the background arming themselves with a militia of numbers, the truth of it is, that the numbers are easily manipulated. Even CATO and Heritage have differing opinions on how to measure the economic gain or drag regarding the Senate immigration reform bill.

However, there are some considerations that – to be wholly honest – are really not negotiable at all.

Firstly, the CBO never accurately projects the cost of any government program over the following decade, let alone two decades.

Secondly, the CBO is not a “non-partisan” organization, and it never was intended to be. The CBO is part, a huge part, of the progressive bureaucracy in the Washington Beltway. It was created to justify the costs associated with the culture of big government, which has time and time again proven to underestimate the cost of every measured program.

Also, as to the prior Huffington Post claim regarding the impact of the bill after the first decade, they said “Security measures likely would already be in place?” Exactly what are they basing their assessment that it is “likely” that borders will be secure and enforced? In fact, the dynamic in the Senate coupled with raw history both make it likely that after the first 10 years we will be having this debate again, because just as tax increases coupled with spending cuts always results in simple tax increases, immigration reform has always resulted in simple amnesty.

Lastly, we can be certain that only one group involved in crafting the Senate immigration reform bill has genuine intentions – big business. They genuinely want millions more exploitable people to cut costs associated with labor and production, and if the GOP was smart, then they would oppose immigration on this basis, instead of seemingly holding some hatred of a particular group.

Written by

Rich, the People's Pundit, is the Data Journalism Editor at PPD and Director of the PPD Election Projection Model. He is also the Director of Big Data Poll, and author of "Our Virtuous Republic: The Forgotten Clause in the American Social Contract."

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