The Congressional Budget Office said on Tuesday that the sweeping immigration bill before the Senate could dramatically pare down the national deficit, giving proponents of the legislation a powerful new selling point as Congress moves closer to a final vote.
Should the bill, as it is currently written, become law, it would boost the U.S. population by 10.4 million over the next decade while lowering the deficit by $197 billion over the same period, the CBO said in a report. While the CBO said the federal government would need to increase spending by $262 billion as a result of the bill, those outlays would be more than offset by $459 billion in new revenue, much of it coming from payroll taxes.
The CBO assumed that some eight million of the estimated 11 million undocumented workers in the U.S. would seek legal status under the law. The bipartisan Gang of Eight's legislation includes a provision that would allow undocumented workers to gradually become citizens.
The bill's backers quickly embraced the report, saying it would build momentum to push through their ambitious legislation.
"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," Sen. Chuck Schumer (D-N.Y.) said in a statement.
In addition to the projected savings over the first 10 years, the report estimated the government would save an extra $700 billion over the next 10.
The main cause for that huge economic boost? A larger working population, with an influx of members who pay more in taxes than they reap in benefits.
A recent study in the journal Health Affairs found that immigrants were largely keeping Medicare afloat by paying into the system but not tapping its benefits in equal measure.
Critics of the immigration reform bill have argued that it would be too costly to implement, and that it would become a drain on public welfare programs. A widely debunked Heritage Foundation report last month claimed the bill would cost taxpayers $6.3 trillion over the next half-century.
The CBO, the government's nonpartisan scoring body, is just the latest institution to conclude that Heritage's estimate was way off base.
"This isn't just a good CBO report. It's a wildly good CBO report," said The Washington Post's Ezra Klein. "They're basically saying immigration reform is a free lunch: It cuts the deficit by growing the economy."
Florida Sen. Marco Rubio (R), who has emerged as the leading player in the immigration debate, echoed that point in framing the report as a conservative case for immigration reform.
"The CBO has further confirmed what most conservative economists have found: Reforming our immigration system is a net benefit for our economy, American workers and taxpayers," he said in a statement.
However, the projected positive fiscal impact does not mean opposition to the bill is sure to soften overnight.
Just got an email from a House Republican reminding me that none of them trust CBO, so this doesn't much matter to them.— Jake Sherman (@JakeSherman) June 18, 2013
Still, the GOP-led House will only come under more pressure as their Senate counterparts, like Kelly Ayotte (R-N.H.), tout the numbers.
CBO affirms #immigration bill is pro-growth & will significantly reduce federal deficit by ~$197B over first 10 years, ~$700b btw 2024-2033— Kelly Ayotte (@KellyAyotte) June 18, 2013
Senate Majority Leader Harry Reid (D-Nev.) has said he'd like to hold a vote on the immigration bill before the July 4 recess.