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.
CBO, the nonpartisan budget analyst for Congress, estimated that the legislation would reduce deficits by $197 billion from 2014 to 2023 and by $700 billion from 2024 to 2033.
The estimate is in stark contrast with a forecast issued last month by the conservative Heritage Foundation think tank that said that the bill would cost taxpayers $6.3 trillion over the next half century.
Florida Republican Sen. Marco Rubio said the findings confirm what most conservative economists have found: specifically that "reforming our immigration system is a net benefit" for the economy and American 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," Rubio asserted. "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."
The CBO released two analyses on Tuesday based on joint work with the staff of the Joint Committee on Taxation (JCT):
- A cost estimate providing projections of the bill’s effects on federal spending, revenues, and the deficit.
- A report on the economic impact of S. 744, analyzing the bill’s effects on economic output, the size of the labor force, employment, wages, capital investment, interest rates, and productivity.
"CBO estimates that, by 2023, enacting S. 744 would lead to a net increase of 10.4 million in the number of people residing in the United States, compared with the number projected under current law," the analyses said. "That increase would grow to about 16 million by 2033. CBO also estimates that about 8 million unauthorized residents would initially gain legal status under the bill, but that change in status would not affect the size of the U.S. population."
The Senate bill would authorize billions of dollars in new spending for enhanced border security and create new visa programs for high- and low-skilled workers in addition to providing a pathway to citizenship for the roughly 11 million undocumented immigrants — many from Mexico and Central America — currently in the country.
As Congress plunged into a contentious debate on the bill, freshman Senator Tim Kaine of Virginia, a Democrat, delivered a Senate speech in support of the bill in Spanish.
Senate officials said it was the first time in at least decades that a floor speech was spoken entirely in a language other than English.
The CBO findings suggest that the enactment of the Senate legislation would:
- Increase the size of the labor force and employment,
- Increase average wages in 2025 and later years (but decrease them before that),
- Slightly raise the unemployment rate through 2020,
- Boost the amount of capital investment,
- Raise the productivity of labor and of capital, and
- Result in higher interest rates.
Four Republicans joined with four Democrats in writing the Senate bill earlier this year.
House Speaker John Boehner of Ohio has said he expected immigration reform to be law by the end of the year. But he said the Senate measures to enforce the changes and secure the U.S. border with Mexico were inadequate.
And Senate Republican leader Mitch McConnell of Kentucky warned in a speech in the Senate: "In days ahead there will be major changes in this bill if it is to become law."
Boehner told reporters on Tuesday that he doesn’t “see any way” that he would bring an immigration bill to the floor without the backing of most House Republicans. He said Republicans will hold a special conference July 10 to map out strategy for an immigration measure.
He called the Senate bill’s border-control provisions “laughable,” echoing the stance of other House Republicans that border-security measures should be strengthened.
“We know that border security is absolutely essential if we’re going to give people confidence that we can do the rest of what’s being suggested,” Boehner said.
Meanwhile, the White House issued a statement saying that the CBO report is “more proof that bipartisan commonsense immigration reform will be good for economic growth and deficit reduction."
The CBO projects that per capita GNP would be less than 1 percent lower than under current law through 2031 because the increase in the population would be greater, proportionately, than the increase in output. But after 2031, the opposite would be true.
"CBO’s central estimates also show that average wages for the entire labor force would be 0.1 percent lower in 2023 and 0.5 percent higher in 2033 under the legislation than under current law," according to the analyses. "Average wages would be slightly lower than under current law through 2024, primarily because the amount of capital available to workers would not increase as rapidly as the number of workers and because the new workers would be less skilled and have lower wages, on average, than the labor force under current law."
The findings also suggest that the rate of return on capital would be higher under the legislation than under current law throughout the next two decades.
Reuters and Bloomberg News contributed to this report.
© 2014 Newsmax. All rights reserved.