Today, the Congressional Budget Office (CBO) released a much-anticipated score of the Senate’s Immigration Bill S. 744. The CBO score is an important part of the analysis of legislation—letting Congress know whether enacting a particular law is good or bad for the nation’s fiscal and economic well-being.
The CBO score found that enacting S. 744 would lead to a net savings of about $175 billion over the first 10 years after enactment. Even though the amount of federal direct spending would grow after 2023 as more people became eligible for federal benefits as a result of the bill, federal budget deficits would decrease by about $700 billion (or 0.2 percent of Gross Domestic Product) over the 2024–2033 period. The bill also increases economic output. Specifically, the bill would increase real GDP relative to the amount CBO projects under current law by 3.3 percent in 2023 and by 5.4 percent in 2033.
In addition, the CBO analysis shows that the bill will have no major impact on the wages of American workers in the first 10 years after enactment and will result in a net increase in average wages after 20 years. The CBO finds that overall employment would increase as the labor force expands, because the additional population will add to demand for goods and services and, in turn, to the demand for labor. However, temporary imbalances may cause the unemployment rate to be slightly higher in the beginning. However, overall it will also boost the amount of capital investment, raise the productivity of labor and of capital, and result in higher interest rates.
Does a positive fiscal and economic analysis provide enough of an imperative for immigration reform?
How important are the economics of reform in the debate?