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October 20, 2014

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Budget office: Immigration bill would not add to federal deficit

The Congressional Budget Office determined late Tuesday that the Senate’s immigration bill will not add to the federal deficit in the short or the long term, enervating one of the most powerful arguments against passing immigration reform and giving Democrats something to crow about.

“This report is a huge momentum boost for immigration reform,” said Sen. Charles Schumer, a member of the "Gang of Eight" who wrote the bill, and a deputy to Senate Majority Leader Harry Reid. “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.”

The CBO, which regularly analyzes the budgetary effect of congressional legislation, estimated that passing immigration reform would save the government about $197 billion over the next 10 years (as opposed to what the deficits would look like under current law) and that in the 10 years after that, it would reduce the deficit by about $700 billion.

The CBO based its estimate largely on the projected increase in the number of immigrants whose status would be changed, enabling them to pay income and payroll taxes that would be credited to the federal government as revenue, as would any fines and fees paid for the change of status.

CBO estimates the Senate’s bill would expand the labor force by about 6 million individuals by 2023, and by about 9 million individuals by 2033. Those are increases of 3.5 percent and 5 percent, respectively.

In its estimate, the CBO assumed that at least some recipients of legal status would also receive food stamps, unemployment benefits, education loans and grants, and Medicaid and other health benefits. CBO estimated that “relatively few of the people directly affected” would qualify for Social Security retirement or disability benefits, noting that the group of individuals affected “tend to be younger and healthier than the rest of the U.S. workforce.”

The major expenses of the immigration bill, as determined by CBO, are increased spending on border security measures, prisons, immigration courts, Pell grants, and the National Guard, whom the legislation designates as a potential supplementary workforce to aid U.S. Customs and Border Protection, as well as federal benefits and refundable tax credits.

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