Gang of Eight: Immigration reform bill won’t add to the nation’s deficit

Members of the Gang of Eight say their immigration reform bill will not add a dime to the nation’s deficit.

That anticipated Congressional Budget Office (CBO) score will defy conservative policy experts who recently claimed the measure would cost trillions of dollars.

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The bill’s authors expect the CBO to release an estimate in early June showing it will be deficit neutral.

“If CBO comes back and says it doesn’t, then we’ll likely address the fees, the fines accordingly,” said Sen. Jeff Flake (R-Ariz.), a member of the gang.

The budget office has announced it will depart from its usual practice and apply a dynamic scoring model to estimate the costs of the law over the next decade. This is good news for the Gang of Eight because the model will factor in the expected economic boost provided by millions of new legal workers. Projecting higher tax revenue from increased economic activity will produce a more favorable budgetary outlook.  

This decision has frustrated some conservative lawmakers because the CBO has consistently used static scoring models, which do not factor in economic growth, to calculate the costs of proposed tax cuts. 

The Gang of Eight offered a substitute amendment to the bill on May 9 that increased its implementation funding by $900 million.

“Our watchword here is to have this bill pay for itself. In other words, we do not want it to incur any costs to the taxpayer, the Treasury or anybody else. That will be a balance. It will be the costs of administering the E-Verify program and the exit-entry visa program, the costs of strengthening the border and the costs of just administering the new immigrants who will be coming here,” Sen. Charles Schumer (D-N.Y.), the lead sponsor of the legislation, told colleagues during the Judiciary Committee’s markup. 

Schumer said the legislation would create a trust fund to fully reimburse the Treasury as much as $7.5 billion in implementation costs.

Sen. Lindsey Graham (R-S.C.) also said he expects a CBO score to come out in the next few weeks showing the bill is deficit neutral. 

The Gang of Eight’s critics have warned the legislation will prove dramatically more expensive than the CBO’s estimate.

The Heritage Foundation issued a report earlier this month forecasting it would add $6.3 trillion to the federal deficit over the lifetimes of millions of illegal immigrants put on a pathway to citizenship.

The think tank, headed by former Sen. Jim DeMint (R-S.C.), predicts immigrant households would collect on average $29,500 more in federal benefits than they pay in taxes per year once immigrants become eligible for citizenship after 13 years.

It also claims the household of a typical unlawful immigrant would receive $592,000 more in government benefits than pay in taxes over a 50-year span.

The Gang of Eight has written its bill in a way to postpone federal benefits for the vast majority of immigrants beyond the next 10 years. This pushes the biggest costs beyond the budget-scoring window used by the CBO.

The bill’s proponents argue Heritage’s analysis is flawed because it fails to take into account the economic boost that would come from an influx of legal workers. 

Cost continues to be a sore subject among conservative opponents. A group of influential conservative leaders warned in a letter this week that the bill “threatens to bankrupt our already strained entitlement systems.”

The Gang of Eight split this week over an amendment sponsored by Sen. Jeff Sessions (R-Ala.) to bar immigrants with provisional legal status from receiving earned income tax credits. The amendment failed in the Judiciary panel.

Earned income tax credits comprise the nation’s largest cash assistance program for low-income families after the Supplemental Nutritional Assistance Program, according to the Tax Policy Center.

Flake said Republicans will try to reduce federal benefits for immigrants with provisional status when the legislation comes to the floor next month.