Over 17 months ago, the Senate passed S. 744, a comprehensive bipartisan immigration reform bill. The non-partisan Congressional Budget Office conducted an analysis on the economic and fiscal impacts this bill would have on the United States if it were enacted. The CBO found that S.744 would lead to a 3.3 percent increase in GDP and reduce the deficit by $135 billion, over ten years. It further estimated that this legislation would reduce the deficit by $820 billion, over twenty years.
In the nearly year and a half since the Senate passed this historic immigration reform bill, the U.S. House of Representatives has done nothing to move the legislative process forward. This Congressional inaction indisputably means that the country is missing an opportunity to significantly grow its economy and strengthen its coffers.
Utilizing the CBO's analysis of S.744, the Center for American Progress illustrated just how much congressional inaction was costing the country by calculating a daily average. We determined that every day the House fails to pass immigration reform, the federal government misses out on a net of $37 million in revenue. CAP has a running clock that tallies up how much the U.S. has missed out on as a result of the House's continued inaction on immigration. Today, the Washington Post ran a "Fact Checker" story on CAP's estimate and gave it two Pinocchios. We believe their conclusions were incorrect by missing the forest for the trees.
In fact, it cannot be stressed enough that the Post has no issue with how the $37 million figure was calculated. The math is straightforward: CBO estimates that S744 would reduce the deficit by $135 billion, over ten years. Working backwards, this estimate suggests that S744 would generate on average a net gain of $37 million each day, over ten years. The story expressly acknowledges the accuracy of this calculation.
So what issue does Fact Checker take with our estimate? The article claims that CAP's estimate misleads readers to believe that the tax revenue gains of immigration reform are instantaneous. They write: "As of Nov. 28, the cost of inaction estimate had surpassed $19 billion, when in reality, one year after enactment, the increase in the deficit and outlays in discretionary spending would total $8 billion, so at this point the clock is $27 billion off."
This critique misses the entire point of CAP's estimate, and is an incorrect interpretation of what the clock is capturing. CAP's clock is not attempting to track the day-to-day changes in the cost (or benefit) of implementing immigration reform since those fluctuations are unknowable. Instead, the clock is capturing, quantitatively, the point that S.744 would create an immigration system that would yield significant net revenue gains each day. Over the next ten years, (and after accounting for all costs under S744) that system would generate on average a net $37 million each day. Therefore, each day the United States doesn't have a working immigration system, we are missing out on $37 million.
To better illustrate this point, consider an undocumented immigrant who is already in the country and working. Under our current broken immigration system, this worker is likely being paid by his or her employer under the table, and neither worker nor employer are paying payroll taxes. Therefore, each day the House refuses to pass immigration reform, is another day this undocumented immigrant is working off the books, without a legal avenue to contribute payroll taxes. Even if the House passes reform sometime in the future, we won't get back the days, months, and years that undocumented workers -- and their employer -- could have been contributing taxes, if only our immigration system had been fixed.
While the Washington Post is correct that if immigration reform were passed 522 days ago we wouldn't have a net gain of 19 billion today, it misses the point that had the House passed reform 522 days ago, the U.S. would already be well into the process of creating an immigration system that would generate on average a net $37 million in tax revenues each day. Therefore, each day the House refuses to pass immigration reform, the United States forgoes a day it could have been one step closer to reaping the fiscal and economic benefits of a common sense immigration system.
About the authors: Marshall Fitz is Vice President for Immigration Policy at the Center for American Progress. Patrick Oakford is a Policy Analyst in the Economic and Immigration Policy departments at the Center for American Progress.
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