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Immigration reform will cut deficit, but will that sway skeptics?

As Senate leaders troll for votes for immigration reform, a finding by the nonpartisan Congressional Budget Office that the bill would cut federal deficits could help build momentum.

By Staff writer / June 19, 2013

Jackelin Alfaro, 4, in a t-shirt that reads 'Don't Deport my Dad' sits in the hall with family members outside the House Judiciary Committee hearing on immigration reform on Capitol Hill on Tuesday. A new report by the Congressional Budget Office, finding that reform would cut federal deficits, could add to the momentum to pass a reform bill this summer.

Carolyn Kaster/AP

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WASHINGTON

Immigration reform may not just be about policy or political sense, it may be about cutting deficits, too – a finding that could boost momentum for reform at a critical point in the immigration debate on Capitol Hill.

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The bipartisan Senate immigration bill would shave just under $200 billion off the federal deficit in the next decade, according to an analysis by the nonpartisan Congressional Budget Office, and hack another $1 trillion off the deficit in the following 10 years.

At $200 billion, the legislation would amount to about a fifth of the spending cuts called for by the “sequester,” the automatic budget cuts mandated by Congress in the summer of 2011.

“This debunks the idea that immigration reform is anything other than a boon to our economy and robs the bill’s opponents of one of their last remaining arguments,” said Sen. Charles Schumer (D) of New York, in a statement.

While opponents of the Senate bill found much to dislike in the CBO’s report – including the estimate that the bill would only stop about a quarter of expected illegal migration over the next decade – the official arbiters of the cost of congressional legislation found the bill would have many salutary effects on the nation’s economy.

Newly legalized workers, more temporary workers, and a simultaneous increase in more high-skilled immigration will all help boost gross domestic product (GDP) by 3.3 percent by 2023, the CBO estimates, and the influx of highly skilled labor will boost the productivity of the overall labor force through anticipated technological advancements. Overall, the Senate version of immigration reform increase the US population by 10.4 million people by 2023, the CBO says.

In terms of the federal budget deficit, the immigration bill will increase government spending by about $262 billion over the next 10 years, as newly legalized immigrants and more legal immigration boost those eligible for federal health-care spending and refundable tax credits.

But that increase is eclipsed by a $459 billion increase in government revenues over the same period, as an increase in legal migration means more US taxpayers and as the nation’s estimated 11 million undocumented people pay several thousand dollars in fines in order to normalize their status.

However, the CBO finds that the legislation would slightly depress average wages for American workers over the next dozen years before providing an upward boost to wages from that point forward. In addition, the immigration law would "slightly raise"  the unemployment rate through 2020, CBO says.

Opponents of the legislation seized on this finding of proof of their long-held complaint that the bill would hurt American workers.

The CBO analysis shows the bill would be the “biggest setback for poor and middle-class Americans of any legislation Congress has considered in decades,” said Sen. Jeff Sessions (R) of Alabama, in a statement.

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