The Congressional Budget Office and Joint Committee on Taxation handed the Gang of Eight a gift today. It issued two reports on the Gang of Eight Plan (S.744), the first of which finds that “enacting S. 744 would generate changes in direct spending and revenues that would decrease federal budget deficits by $197 billion over the 2014–2023 period. . .On balance, CBO and JCT estimate that those changes in direct spending and revenues would decrease federal budget deficits by about $700 billion (or 0.2 percent of Gross Domestic Product) over the 2024–2033 period.”
But CBO and JCT didn’t stop there. A second report finds that “S. 744 would boost economic output. Taking account of all economic effects (including those reflected in the cost estimate), the bill would increase real (inflation adjusted) GDP relative to the amount CBO projects under current law by 3.3 percent in 2023 and by 5.4 percent in 2033, according to CBO’s central estimates.” Moreover, “CBO and JCT expect that new immigrants of working age would participate in the labor force at a higher rate, on average, than other people in that age range in the United States.” By 2025 wages on average would go up 0.5 percent “primarily because the bill would boost the productivity of labor and capital.” Before that wages would decrease by an infinitesimal 0.1 percent.
Sen. Marco Rubio (R-Fla.) praised the report, stating that “the CBO report offers encouraging evidence that the status quo is unacceptable and we can end it without burdening our already burdened taxpayers and, in fact, reduce the deficit over the next 20 years.”
American Action Forum president and former CBO director Douglas Holtz-Eakin, who has been in the forefront of the immigration reform effort and wrote a study with similar findings, gets a chance to crow in a written statement:
Today’s CBO score of the Senate immigration bill reiterates what economic conservatives have been saying all along: that reform is an economic policy opportunity. With Washington broke and America stuck in a jobless recovery, the CBO report proves that immigration reform would be an unambiguous policy trifecta: higher growth, significantly reduced deficits, and a rational labor policy. This should put to rest any legitimate debate about the economic and fiscal implications of responsible immigration reform. While it’s clear entitlement reform remains essential, the growth and fiscal effects of immigration reform would only improve the nation’s outlook.
Fellow immigration reform advocate Grover Norquist of Americans for Tax Reform responded:
Today’s CBO score is more evidence that immigration is key to economic growth. Immigration reform will jumpstart America’s economy and reduce our national debt. And because CBO employed the type of dynamic analysis conservatives have long clamored for, we have a full accounting of both the costs and benefits of reform. I urge Congress to fix our broken immigration system for the sake of the American economy.
The CBO reports are important, and not because they will change the minds of those dead set against immigration reform (and against any more immigration for that matter). Rather they are critical to give lawmakers who want to vote “yes” the ammunition to respond to attacks and to reiterate that immigration reform is a fiscally conservative, pro-growth endeavor.