Although the Senate parliamentarian ruled back in September that the Democrats’ proposed amnesty for 8 million illegal immigrants could not be included in the Senate’s budget-reconciliation process, Democrats are trying again with a smaller-scale amnesty that recently passed in the House as part of its own reconciliation bill. This version would offer “parole” (lawful status) to the roughly 6.5 million illegal immigrants who arrived before 2011. Theoretically, the parole would last only five to ten years, but these amnesty recipients will probably hold on to their lawful status indefinitely, given the political pressures that have sustained other allegedly time-limited reprieves such as TPS and DACA.
Like the proposal rejected in September, this new amnesty would have wide-ranging legal, social, and economic effects that go far beyond the budgetary matters on which the reconciliation process is supposed to be focused. The Senate parliamentarian probably will (and should) rule the proposal out of order.
But regardless of how the parliamentarian rules, amnesty in one form or another will inevitably be proposed again, so it’s instructive to examine how the CBO has scored this latest proposal. It estimates that the net fiscal impact over ten years will be $124 billion. As I had been warning, however, a ten-year time horizon excludes most of the entitlement costs associated with amnesty. Illegal immigrants generally cannot collect Social Security and Medicare benefits, but many still pay taxes into the system. These taxes are essentially free contributions to our entitlement programs. Once illegal immigrants receive amnesty and become eligible for benefits, however, the free contributions turn into IOUs from taxpayers. Earlier this year, I estimated that the cost of amnesty to Social Security and the hospital insurance portion of Medicare would come to $1 trillion in present value, yet almost all of this cost would occur beyond the CBO’s usual ten-year window.
I’m pleased to see that the CBO has partially addressed this problem. In its score of the bill, the CBO notes that the immigration provisions “would have long-term budgetary effects that are noticeably greater than those in the first decade,” and so it extends its budgetary estimates for immigration by another ten years. On top of the $124 billion in the first ten years, amnesty would increase the deficit by $359 billion in the second decade, “and by larger amounts in the subsequent decade.” So the total cost is $483 billion over the first 20 years, with an even larger cost coming after that. Although the CBO’s methods here are characteristically hidden, it’s likely that the escalating costs are due to entitlement spending.
I would still prefer direct calculations of the impact on Social Security and Medicare, similar to the long-term analyses published by the trustees of those programs, but the CBO’s extended budget window is welcome, and I hope to see it applied again to future immigration proposals.