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Comprehensive immigration reform would cut deficit and boost economy: CBO

By Reuters
Tuesday, June 18, 2013 18:50 EDT
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Immigration rally via AFP
 
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WASHINGTON (Reuters) – A White House-backed immigration bill moving through the U.S. Senate would cut federal budget deficits over the long term and provide an overall boost to the economy, the Congressional Budget Office said on Tuesday.

The CBO, the nonpartisan budget scorekeeper for Congress, estimated the legislation would reduce deficits by $197 billion from 2014 to 2023 and by $700 billion from 2024 to 2033.

The estimate contrasts starkly with a forecast issued last month by the conservative Heritage Foundation think tank that said the immigration bill would cost taxpayers $6.3 trillion over the next half century as a result of granting legal status to nearly 11 million undocumented people now living in the United States.

The Senate bill “would boost economic output,” the CBO declared.

The CBO said it did not attempt to look beyond a 20-year window because “ascertaining the effects of immigration policies on the economy and the federal budget is complicated and highly uncertain, even in the short run, and that task is even more difficult for longer periods.”

Over the first 10 years, the CBO said government costs would rise by $262 billion, mainly because of increases in refundable tax credits and healthcare spending, particularly for Medicaid, the government health program for the poor and disabled.

Republican senators are hoping to pass amendments in coming days that would specifically deny the refundable tax credit and other benefits to the undocumented residents who would gain legal status under the bill.

Furthermore, House of Representatives Republicans have been pushing to deny any Medicaid-covered healthcare, including hospital emergency visits, for the 11 million illegal immigrants. Negotiators have been looking at ways of charging the newly legalized people fees to cover such costs.

But more than offsetting the higher government spending would be an increase in revenues totaling $459 billion from 2014 to 2023, according to estimates by the CBO and the Joint Committee on Taxation, as more people pay taxes and get out of the “shadow” economy.

The CBO’s projection “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,” said Democratic Senator Charles Schumer of New York, one of the leading proponents of the immigration bill the Senate hopes to pass before a July 4 recess.

Republican Senator Marco Rubio of Florida, who like Schumer is a member of the “Gang of Eight” that wrote the bipartisan bill, said, “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.”

Some conservative Republicans who oppose the bill argue it would hurt the American economy and workers.

(Reporting by Richard Cowan, Thomas Ferraro and David Lawder; Editing by Peter Cooney)

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