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Contradicting a major GOP talking point that immigrants would hurt the US economy, the nonpartisan Congressional Budget Office (CBO) on Tuesday predicted that the recent surge in immigration would reduce the federal deficit by $900 billion over the next decade.
CBO’s findings will likely play a role in the pre-election immigration debate.
Until now, Republicans, aided by a right-wing propaganda machine, have had the upper hand by casting undocumented immigrants as criminals.
While there is obviously some anecdotal evidence of undocumented immigrants committing crimes (which is what GOP lawmakers and Fox News are focusing on), the crime rate of non-citizens, especially those who are undocumented, is generally noticeably lower than that of American citizens.
Now, however, proponents of additional immigration have the data to back up claims that welcoming millions of new people to the country would have a net benefit — not just for the government but also for Americans, who will see their wages increase.
The government can rake in additional payroll and income taxes.
For individuals, having an increase in the workforce results in better pay over time (although likely a slight dip early on).
Generally, immigrant workers make less than American citizens with comparable levels of education.
“Through 2026, the average wage growth of people in the United States who are not part of the surge is slightly less than it would have been without the surge because the surge slows the growth of wages of people with 12 or fewer years of education,” CBO estimated. “That pattern reverses in later years as the average wage growth of people who are not part of the surge increases slightly because of higher innovation-related productivity and because the increase in the number of less-educated workers boosts the demand for more-educated people to work with them.”
For its calculations, CBO’s researchers assumed that net immigration between 2021 and 2026 would total 8.7 million people. That figure includes both documented and undocumented immigrants.
While their presence would increase federal spending in some areas, it will boost revenues even more, CBO said.
“Some of the effects on the budget result from the increase in the number of people paying taxes and collecting federal benefits,” CBO stated, while also noting that there is still a lot of uncertainty. “Other budgetary effects stem from changes in the economy over that period that are brought on by the surge, including increases in interest rates and in the productivity of workers who are not part of the surge.”
Beginning this year, federal revenues will increase by $1.2 trillion over the next decade while outlays will grow by $300 million over the same period.
However, CBO did not include the likely impact of discretionary programs (such as the added expense from providing primary and secondary education to immigrants) in its calculation because that funding will “depend on future actions taken by lawmakers.”
Its researchers noted that this could add another $200 billion in expenses through 2034.
Finally, CBO only estimated the effect of the immigration surge on the federal deficit. The agency pointed out that state and local governments are usually impacted differently.
“Research has generally found that increases in immigration raise state and local governments’ costs more than their revenues,” CBO stated.
