Increased immigration could reduce US deficits by nearly $1 trillion over 10 years: CBO

A continued increase in immigration could reduce the country’s deficits by nearly $1 billion over the next 10 years, the Congressional Budget Office (CBO) said Tuesday in its latest projections.

Its new analysis concluded that a continued increase in net immigration between 2021 and 2026 could help reduce the country’s deficits by $900 billion and revenues could increase by $1.2 billion, the CBO said, pointing out at the same time time for its potential impact on individual income and payroll taxes.

“CBO’s estimate of these tax revenues is based on its assessment that these immigrants will initially have lower-than-average incomes, but that their incomes will increase as they remain in the United States,” the agency said.

“CBO’s estimate is also based on its assessment that about half of the immigrants in the surge will be allowed to work and will be just as likely to pay taxes on their income as the rest of the population,” he continued. “Immigrants who work without authorization will pay some taxes, but are considered less likely to do so than the rest of the population.”

The nonpartisan budget evaluator also said he expects the increase to help boost economic activity and “income from labor and capital, as well as tax revenues from all sources.”

At the same time, the office expects federal spending on mandatory programs and net interest costs to grow by about $278 billion over the next 10 years due to the increase, estimating that spending on mandatory programs “will increase by about $194 billion of dollars during this period, mainly because of spending on benefits for immigrants and their children.”

The CBO considers people entering the country in its “other foreign nationals” category, which covers those who entered illegally and “have not obtained permanent legal status”; those who have been “allowed to enter the country lawfully through the use of parole authority and who may be awaiting immigration court proceedings, and persons who were previously lawfully residing in the United States on a temporary status but who remained in the country after that legal status expired.”

While the CBO notes that there is still uncertainty surrounding its projections on the issue, it estimates that net immigration of people in the category will be “8.7 million higher during the 2021-2026 period than it would have been if net immigration had remained unchanged.” at the level otherwise expected.” level.”

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