CBO Confirms Immigration Reform is Key to Economic Growth
By Leticia Miranda, Senior Policy Advisor, NCLR
Our economy will grow, the deficit will shrink, and our taxpaying labor force will expand so that we have more workers to support our aging population. That is, if we pass immigration reform. This was the news from the Congressional Budget Office (CBO), which yesterday released its estimate of the cost of the Senate’s bipartisan immigration reform bill, S. 744. The score reveals that the benefits of passing immigration reform far outweigh the costs related to the bill. Despite these tremendous benefits for us all, however, some senators are still intent on punishing immigrants by taking away critical tax credits and benefits.
While this is very promising news, it’s not news to us. Throughout our nation’s history immigrants have always brought economic vitality and an entrepreneurial spirit to our shores. In fact, the CBO score notes that economic growth will increase by 3.3 percent over the first 10 years and 5.4 percent by 2033 if we pass immigration reform.
Most importantly, according to the CBO this higher economic growth will also reduce the federal budget deficit by almost $900 billion within 20 years—$197 billion by 2023 and an additional $700 billion by 2033. This means the deficit will decline more after immigrants become eligible for benefits such as health care premium subsidies. This is a surprise to groups like the Heritage Foundation who predicted exactly the opposite.
Reform will also result in increased Social Security revenues of $214 billion over 10 years, helping to shore up the finances of this system.
Yet these enormous benefits to our economy and budget are not enough for some senators. If some had it their way, they would further punish immigrants by hurting them in the pocketbook. S. 744 already includes steep financial penalties, and these senators know it. Piling on more punitive amendments will derail the entire immigration reform effort since millions will be blocked from the path to citizenship.
- Senator Hatch (R–Utah) and Senator Rubio’s (R–Fla.) Amendment #1247 would require registered provisional immigrant (RPI) families to document that they have paid all back taxes before legalizing. This is simply unworkable. Millions of undocumented workers have been paid in cash off the books, making it impossible to document past earnings and creating an administrative nightmare for the IRS. The Senate’s bill instead pragmatically requires that families pay a $4,000 fine.
- Amendment # 1381 from Senator Johnson (R-Wis.) and Senator Coburn (R-Okla.) would make legal working RPI families ineligible for the Earned Income Tax Credit. This sets up a two-tier system in which RPI families would pay taxes that are more than 300 percent greater than taxes for other American families who earn the exact same income.
- Another amendment from Senators Hatch and Rubio, #1249, attacks future finances. It would deny newly legalized workers the Social Security benefits they earned through their prior work and payroll taxes, despite the fact that these hardworking taxpayers contributed $13 billion to the Social Security Trust Fund in 2010.
The costs outlined in the bill are the price of restoring the rule of law and integrating millions of hardworking taxpayers into our American way of life. The investments outlined in the bill, including access to the Earned Income Tax Credit and Child Tax Credit, are worth it. They are investments in children that will pay enormous dividends over time, monetarily and otherwise. Substantial research has shown that these tax credits are directly correlated with children performing better in school and earning more as adults.
Our country needs a workable immigration bill, and compromise is important for support, but it should not come at the expense of the legislation’s very viability. If the path to citizenship is not realistic, then this entire exercise will have been an expensive failure. We cannot allow that to happen.
