The likelihood of major legislative action from Congress this year is slim, but immigration reform appears to have the best shot. One of the key arguments in favor of reform, at least coming from those who support it, is that the current immigration system is a drag on the economy and that reforming it will stimulate growth, create jobs, and generate more opportunity.
With a few caveats, the evidence seems to support most of these claims. But that isn’t preventing a lot of political infighting over reforming the nation’s immigration laws, particularly from within the Republican Party.
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House Speaker John Boehner has held out hope that there is enough Republican support in the chamber to get some sort of immigration reform bill passed this year. House Republicans last week issued a list of principles outlining what they would support, and Democrats were cautiously optimistic. (Update: In a press conference late this morning, Boehner dramatically lowered expectations for immigration reform in the near future. "There’s widespread doubt about whether this administration can be trusted to enforce our laws, and it’s going to be difficult to move any immigration legislation until that changes,” he told reporters.)
In the Senate, Minority Leader Mitch McConnell said he sees little chance of success because the Senate last year passed a comprehensive reform bill, while the House is expected to take a piecemeal approach to the problem.
"I think we have an irresolvable conflict here,” he told reporters on Wednesday. “The Senate insists on comprehensive. The House says it won't go to conference with the Senate on comprehensive and wants to look at step-by-step."
The battle over immigration reform within the Republican Party is complicated by the fact that by almost all estimates, reform is expected to boost the economy. On the extreme right of the GOP, opposition to increased immigration remains strong. The Heritage Foundation, for example, has warned that easing citizenship requirements will result in a more than $6 trillion hit to the economy. But those numbers are not supported by other analysts.
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Diana Furchtgott-Roth, a former member of President George W. Bush’s Council of Economic Advisers and now a senior fellow at the Manhattan Institute, assessed the costs and benefits of reform and determined that even though reform will drive some costs up, the net result will be an improvement to the economy. “Immigration benefits the economy,” she concluded, “and America must adopt more flexible immigration policies that spur growth.”
It is, of course, impossible to predict what form immigration reform legislation might take in Congress; but the Senate-passed a bill and garnered the votes of more than a dozen Republicans in addition to every one of the chamber’s Democrats, making it a reasonable proxy for what might be politically feasible.
Among other things, the bill proposed keeping the flow of immigrants into the country at the current level, but changing the mix by incorporating better border security to prevent illegal entries, and loosening certain visa restrictions to allow more skilled workers to enter the country.
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The non-partisan Congressional Budget Office reviewed the Senate bill in order to assess its effects on the economy. In general, the news was good. The CBO found that over the course of ten years, the bill would result in a 10-year net decrease in the federal deficit of $197 billion – not enough to ease concerns about the country’s rising debt, but certainly a real benefit.
The report found that between 2014 and 2023, the bill would lead to an increase of 9.6 million in the population of the United States, and would cause the government to increase what it pays out to fund various services, but would also increase revenues by a greater amount. The CBO projected that in addition to a net decrease in federal budget deficits of $197 billion over the first ten years following the bill’s enactment, the country would see an additional $700 billion in deficit reduction over the second ten years.
The bill, according to CBO, would boost gross domestic product by 3.3 percent over the first ten years after enactment and another 5.4 percent in the second decade.
The projected economic growth and deficit savings are trumpeted by most supporters of immigration reform. In Wednesday’s issue of The Hill, former House members from Virginia Tom Davis, a Republican, and Tom Perriello, a Democrat, wrote, “In our state of Virginia alone, immigration reform would add $16.3 billion to the economy over a decade, raise $670 million in new tax revenue, and create 2,400 jobs each year. These are jobs spread throughout the economy, from agricultural workers and home care providers to engineers and technology experts.”
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Other supporters note that immigration restrictions also keep highly-skilled workers who would be a net benefit to the economy from entering the country, a problem most proposals being considered would address.
Amid the positive outcomes from reform listed in the CBO report were a few observations that may give ammunition to critics of immigration reform. First among them is that the bill would increase the unemployment rate. The CBO found that immigration reform would slightly increase unemployment. The bill “would raise the unemployment rate over the next five years by up to roughly 0.1 percentage point.”
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It would also depress wages, though by a similarly small amount, for at least the first decade after enactment. CBO found that under the Senate bill, “average wages would be lower by about 0.1 percent in 2023 and higher by about 0.5 percent in 2033.”
However, it’s important to note that the CBO’s numbers suggest that most of the decrease in average wages would be the result of a large number of lower-income workers – the immigrants anticipated under the reform proposal – entering the workforce. This means that the impact would be small, or perhaps non-existent, for existing workers.
This article was updated at 12:25 p.m. on Thursday, Feb. 6, 2014, to include the latest remarks by House Speaker John Boehner (R-OH).
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