The growing undocumented immigrant population in the US will reduce the deficit by nearly a trillion dollars over the next decade, according to a study by the Congressional Budget Office (CBO).
CBO projectionsThey are based on the net sum of economic activity generated, taxes paid and benefits attributed to the immigrant groups included in the study.
The nonpartisan agency estimates a net population increase of 8.7 million such immigrants between 2021 and 2026, with an average increase of 1.7 million people per year above the pre-2020 annual net immigration average of 200,000.
The CBO based its projections on the economic effects this growing group of 8.7 million people is expected to have between 2024 and 2034.
The report excludes immigrants who receive or are eligible for lawful permanent resident status, non-immigrant foreign nationals on temporary work visas, or asylum seekers, focusing instead on people paroled at or between ports of entry. at the border, those who overstayed their visas and undocumented immigrants who entered the country. country without encountering U.S. border officials.
This group is expected to generate $1.175 billion in increased federal revenue over the 2024-2034 period and $270 billion in mandatory spending and net federal spending, for a net reduction of $897 billion in the federal deficit.
The economic effects of this population are expected to increase over time: from 2024 to 2028, the predicted reduction in the net deficit due to their presence is $296 billion.
The CBO projection divides the budgetary effects of undocumented immigrants into two categories: taxes paid directly by that population and economic growth stimulated by immigrants’ roles as consumers and in the labor market.
Between 2024 and 2034, the CBO predicts that immigrants in the growing population will pay $788 billion in taxes and generate $387 in extra federal revenue through their effects on the global economy.
Its effect on mandatory expenses and net interest expenses – how much the presence of immigrants will cost the federal government – is also divided into two, the cost of the benefits themselves and the costs related to the economic effects of population growth.
CBO estimates that the federal government will spend $177 billion on benefits for this population between 2024 and 2034, a number that will grow over time as immigrants and their children become eligible for more government benefits.
The group’s effect on interest payments is estimated to reduce the deficit by around US$4 billion in the period 2024-2028, but to show an upward trend in the second half of the decade, leading to an increase in expenditure of US$101 billion of dollars throughout the period 2024-2034.
The CBO estimates that the net effect of taxes paid minus benefits awarded will reduce the deficit by $611 billion between 2024 and 2034, and the economic spillovers from undocumented immigrants and parolees will reduce the deficit by $285 billion during this period.
While the CBO has not produced a projection for state and local budgets, the balance between tax revenues and allocated benefits will depend on the benefit structures in each state, according to the report.
“Researchers have generally found that increased immigration tends to increase federal government revenues more than their costs, but increases state and local government costs more than their revenues,” it reads.
“CBO expects this general pattern to hold for the increase in immigration considered in this report – the additional 8.7 million people in the other aliens category who migrate to the United States or remain in the country after an authorized stay from 2021 to 2026 and their U.S.-born children.”
But the report adds that the overall local budgetary effect of the specific group of 8.7 million people could break with that norm, in part because the group is predominantly made up of people of working age, who tend to use fewer social services and pay more taxes than children or the elderly.
The CBO’s estimate of net population growth of 8.7 million people estimates that about half of that population arrived between 2021 and 2023, and the other half is arriving between 2024 and 2026. The researchers crunched their numbers predicting a return to average long-term annual. net undocumented and parole immigration of 200,000 people per year.
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