Immigration Law: Flaws with CBO Analysis on Federal Budget

In describing the bill, the CBO management wrote:

S. 744 would revise laws governing immigration and the enforcement of those laws, allowing for a significant increase in the number of non citizens who could lawfully enter the United States on both a permanent and temporary basis.

The new legislation would allow 10.4 million people to enter the United States, over the decade period, who would have been unable to do so otherwise, at least legally. The primary benefit would be that the taxes these people paid would increase federal receipts. This makes a great deal of common sense, based on the amounts current immigrants pay.

The details of the deficit reduction reveal that of the $197.1 billion positive effect on the federal deficit, $36.2 billion comes in 2023, $33.2 billion comes in 2022 and $27.6 billion comes in 2021. In sum, 50% of the benefits will be posted in the final three years of the period.

One of the regular lessons of federal budget forecasts is that they are notoriously wrong. The CBO and White House Budget Office estimates of how large the budget deficit would be this year and next already have proved incorrect. The deficit will be lower than expected. Last month, the CBO reported that the deficit for the current year would be $642 billion, which was an improvement of about $200 billion from the figure it had forecast in February. The magnitude of the change is tremendous, particularly in such a short period.

Over the next 10 years, the tax code could change, as could the median income of immigrants, the mixture of their skills and the level of unemployment among the group. Those are just a few a nearly infinite number of variables that could make the forecasts about the effects of S. 744 inaccurate. In essence, that means it is wrong already.