This week marks the second anniversary of the Senate’s passage of the 2013 comprehensive immigration reform (CIR) bill, SB 744. Although it did not become law, the bill would have produced substantial economic benefits. Emphasizing that fact is important if immigration reform is to move forward.
The 2013 bill would have transformed immigration more than any piece of legislation since the Immigration and Nationality Act of 1965. Had the bill passed:
- About eight million unauthorized immigrants would have received legal status and work authorization, according to the bipartisan Congressional Budget Office (CBO);
- New guest-worker programs would have been created for up to 200,000 lesser skilled nonagricultural workers plus a similar program for agricultural workers;
- H-1B visas for temporary high-skilled workers would have been doubled;
- Employment-based green cards (permanent residency visas) would have been doubled by exempting new workers’ spouses and children, who currently count against the cap; and
- Green cards for immigrants with doctorates or master’s degrees in science or technology would have been uncapped.
In 2013 the CBO and Congress’s Joint Committee on Taxation (JCT) measured the economic impact of SB 744 and found that it would:
- Reduce the federal budget deficit by $850 billion over 20 years;
- Increase GDP by 3.3 percent ($700 billion) within 10 years and 5.4 percent ($1.4 trillion) within 20 years;
- Decrease wages 0.1 percent in the first 10 years, but then increase wages 0.5 percent within 20 years;
- Raise the unemployment rate 0.1 percent over five years, but have “no effect” after 2020;
- Increase the U.S. population by about 10 million people (about 3 percent) by 2023 and by about 16 million people (about 4 percent) by 2033;
- Add $300 billion to the Social Security Trust Fund over the next decade; and
- Increase the labor force 5 percent by 2033.
That was not the only study of CIR. In January 2012 economist Raul Hinojosa-Ojeda found that awarding legal status to immigrants—as the Senate bill would have—could produce at least $1.5 trillion more in GDP over 10 years. Furthermore, he found that CIR would generate an annual increase of 0.84% in GDP while boosting native-born and newly legalized immigrant workers’ wages. This translates to $256 billion in new investment spending and $1.2 trillion in new consumption.
In October 2013 the Bipartisan Policy Center found the Senate’s comprehensive immigration reform would cause the U.S. economy to grow an additional 4.8 percent over 20 years—2.8 percent in the first 10 years. Moreover, it found that cumulative budget deficits would fall by nearly $1.2 trillion over 20 years, with nearly one trillion of that coming in the second decade. Finally, it found that the labor force would increase by 8.3 million and the population by 13.7 million within 20 years, with just 6 percent of the new population being over 65.
In April 2013 Douglas Holtz-Eakin found that immigration reform would raise the pace of economic growth by nearly a percentage point, raise GDP per capita over $1,500, and reduce the federal deficit by $2.5 trillion.
Projections are imperfect, hence the range in estimates. And while the 2013 CIR was not a perfect solution to the problems of the U.S. immigration system, it would have done much good for the American economy.
Immigration-reform advocates can learn a lot from the 2013 debate about political strategy and economic benefits. CIR can bolster entitlements, improve the dragging labor-force participation rate, increase wages, and dramatically increase GDP. Lawmakers should renew CIR discussions so that much-needed changes in the immigration system may be enacted.