Yes, Immigration Reform Even Cuts the Deficit
Another talking point bites the dust. Opponents of the comprehensive immigration reform working its way through the U.S. Senate have often decried the high cost of legalizing undocumented immigrants. The working theory is that people who endure low wages and a host of other hardships for the opportunity to work undercover would opt for government welfare once they are permitted to work legally.
The Congressional Budget Office has a different view. The nonpartisan CBO’s newly released analysis of the immigration law estimates that it would boost economic growth and cut the federal deficit by roughly $1 trillion over the next two decades. The CBO said it would cost about $22 billion to put the bill in place over the first decade while saving almost $200 billion in that time.
This doesn’t mean the legislation, which would create a path to citizenship for an estimated 11 million undocumented immigrants, would be a universal boon. In the first decade, average wages would decline by 0.1 percent, according to the CBO, before rising in the second decade. The reason? The “new workers would be less skilled and have lower wages, on average, than the labor force under the current law.” In addition, the CBO projects that unemployment would be “slightly higher for several years.” In sum, owners of capital would benefit from legalization, while low-skilled laborers might be slightly harmed in the initial years.
Altogether, however, the bill is clearly a net plus: About 10 million undocumented immigrants would become legal residents on a path to citizenship, resulting in greater economic growth and lower deficits.
Naturally, this conclusion has put a strain on the legislation’s opponents. Republican Senator Jeff Sessions insisted the CBO analysis was the result of “gimmicks”; he’s sticking to his personal assessment of the law’s effects.
You would think a senator from Alabama, which damaged its economy and its prospects for growth by passing a crude law that drove undocumented immigrants out of state, would know better. After the legislation’s passage, tomatoes rotted in north Alabama fields with no one to pick them. One study, published by the Center for Business and Economic Research at the University of Alabama, estimated that the legislation would cost the state more than $2 billion and tens of thousands of jobs.
There can be no decent immigration reform without a path to citizenship. A majority of the Senate, including border state Republicans John McCain and Jeff Flake of Arizona, acknowledges this. Now, another reality has been affirmed, with the CBO underscoring the findings of other studies that have projected economic benefits to legalization.
Even so, the CBO report is unlikely to change the political calculations of reform’s opponents. Speaker John Boehner said this week that he would only pass legislation in the House with a Republican majority. Knowing how important immigration reform is to the economy, to the nation and to the future of the Republican Party, we trust the Republican leader has a plan.
To contact the Bloomberg View editorial board: email@example.com.