The director of the Congressional Budget Office (CBO), Keith Hall, testified before Congress in February on how the CBO estimates the economic effects of proposed legislation affecting immigration.
“In 2013, CBO published an economic analysis of the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744),” Hall said. “That act would have revised laws governing immigration and the enforcement of those laws, allowing for a significant increase in the number of noncitizens who could lawfully enter the United States permanently or temporarily. The bill also would have created a process for many currently unauthorized residents to gain legal status, subject to their meeting conditions specified in the bill.”
The CBO, in collaboration with the staff of the Joint Committee on Taxation, then analyzes what impact S.744 would have on the economy.
“Relative to current law, enacting S. 744 would have increased the population, the size of the labor force, and employment, decreased average wages through 2024 and increased them thereafter, slightly raised the unemployment rate through 2020, boosted the amount of capital investment, raised the productivity of labor and of capital, and resulted in higher interest rates,” Hall said.
The CBO director added that changes to immigration policy could have a significant effect on the size and composition of the U.S. population.
“As a result, participation in federal programs and the payment of taxes could change,” Hall said. “For that reason, and depending on the scope of the proposal, CBO considers various factors when estimating the budgetary consequences of legislation affecting immigration, including the demographic and labor-force characteristics of foreign-born people, their eligibility for and participation in federal programs, their tax liability, and changes in the economy. If proposals were combined into a single, more wide-ranging immigration bill, estimates of the budgetary effects would take into account the complex interactions among the various provisions; the net effect would not be a simple summation of the individual effects.”