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CBO report challenges GOP stance on immigration's economic impact
CBO’s findings are poised to influence the pre-election immigration debate.
The number of people entering the United States has increased sharply in recent years. / Congressional Budget Office
A new report by the Congressional Budget Office (CBO) estimated that an increase in immigration would reduce the federal deficit of the United States by $900 billion over the next ten years. This contradicts a major Republican Party talking point about immigrants being detrimental to the American economy.
“The increase in immigration boosts federal revenues as well as mandatory spending and interest on the debt in CBO’s baseline projections, lowering deficits, on net, by $0.9 trillion over the 2024–2034 period,” CBO’s July 23 report stated.
According to the report, immigration between 2021 and 2026 would total 8.7 million people, including both documented and undocumented immigrants. Their presence would increase federal spending in some areas but boost revenues even more.
“Some of the effects on the budget result from the increase in the number of people paying taxes and collecting federal benefits,” CBO stated, while noting considerable uncertainty. “Other budgetary effects stem from changes in the economy over that period that are brought on by the surge, including increases in interest rates and in the productivity of workers who are not part of the surge.”
CBO estimated that starting this year, federal revenues are expected to increase by $1.2 trillion over the next decade, while outlays will grow by $300 million in the same period. Additionally, the surge will boost total nominal gross domestic product (GDP) by $8.9 trillion over the 2024–2034 period, the report states.
However, CBO did not include the likely impact of discretionary programs, such as the added expense of providing education to immigrants, because that funding will “depend on future actions taken by lawmakers.” This could add another $200 billion in expenses through 2034, the report estimated.
CBO only estimated the impact of the immigration surge on the federal deficit, noting that state and local governments are usually affected differently. “Research has generally found that increases in immigration raise state and local governments’ costs more than their revenues,” CBO stated.
CBO’s findings are poised to influence the pre-election immigration debate. Until now, Republicans, aided by right-wing media, have portrayed undocumented immigrants as “drains on the economy”.
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