CBO: Deficit savings in Senate immigration bill take $39 billion hit

Increased border-security measures in the Senate’s immigration reform legislation have lowered the bill’s deficit reduction benefits by $39 billion, the nonpartisan Congressional Budget Office said Wednesday. 

{mosads}The CBO issued a new deficit score for the Senate-passed immigration bill that says the legislation will cut the deficit by $158 billion over the 2014-2023 period.

But that is $39 billion less than the $197 billion in deficit reduction for the original bill reported out of the Senate Judiciary Committee. The difference is due to amendments that beef up efforts to secure the border. 

The immigration reform bill passed the Senate on a 68 to 32 vote. 

The CBO estimated the increased border security spending would reduce the number of illegal immigrants in the U.S. by 800,000 more over 10 years than the original Gang of Eight bill, which was expected to lower illegal immigration by 1.6 million people.

The changing estimates stem mostly from a $36 billion increase in direct spending under the amendment bill. Revenues would fall by $3.2 billion as taxes paid on behalf of illegal workers fall.

Because there would be 800,000 fewer people living in the United States, economic growth from the bill would be expected to dip slightly.  

The CBO score reflects the budget impact when changes to Social Security — which is technically off budget — and economic growth are factored in.

Supporters of the Senate bill have seized on the CBO’s estimates to try to push the House to pass a similar measure. 

“CBO once again vindicated immigration reform and shows how the amendment process improved the bill. CBO has reaffirmed that immigration reform reduces the debt and grows the economy,” Sen. Charles Schumer (D-N.Y.), a “Gang of Eight” member said. 

“It also shows that the Corker-Hoeven amendment further substantially reduces the flow of illegal immigrants, even using a methodology that underestimates how effective immigration reform will be in reducing that flow.”

The office of Sen. Jeff Session (R-Ala.), the chief critic of the bill, said the CBO score is a net negative for the measure.

“CBO today confirmed that this bill falls far short of living up to its sponsors’ promises. Illegal immigration will be reduced by as little as one-third from what it otherwise would be,” spokesman Andrew Logan said. 

“And, because of a huge budget gimmick whereby Social Security funds are used to pay for the bill’s other spending, on-budget deficits increase by more than $50 billion.”

Critics have argued that the Social Security effects should be excluded and have latched onto a CBO finding that average wages would dip slightly in the first 10 years. 

Both versions of the bill would eventually legalize an estimated 8 million illegal immigrants and critics argue this rewards law-breaking while hurting wages of workers here legally.  

They require $22 billion in discretionary appropriations over 10 years that would either have to be offset or would force the Budget Control Act’s caps to be lifted.

Lifting the caps would bring the deficit reduction from the Senate bill down to $135 billion over 10 years.

Last month, the CBO said that in the second decade, the Gang of Eight bill would reduce deficits by $700 billion. The amended bill comes in at $685 billion in deficit reduction. 

Updated at 4:41 p.m.