CBO: DREAM Act Will Reduce The Deficit

dream actCBO Estimates DREAM Act Will Reduce The Deficit By $1.4 Billion Over Ten Years

This week, Sen. Jeff Sessions (R-AL) demanded that the Development, Relief and Education for Alien Minors (DREAM) Act be put on hold because, according to him, lawmakers haven’t been given the opportunity to “properly review and consider the legislation prior to a vote.” One of his primary complaints was that the Congressional Budget Office (CBO) had not yet scored the costs associated with enacting the legislation.

Last night, the CBO released the long-awaited cost estimate of S. 3992, the latest version of the DREAM Act. The CBO found that putting thousands of young, undocumented immigrants on a path to legalization would reduce the deficit by $1.4 billion over ten years:

The increase in authorized workers would affect individual and corporate income taxes, as well as social insurance taxes. On balance, those changes would increase revenues by $2.3 billion over 10 years, according to estimates provided by the staff of the Joint Committee on Taxation (JCT).

CBO and JCT estimate that enacting the bill would reduce deficits by about $1.4 billion over the 2011-2020 period. That result reflects an increase in on-budget deficits of about $1.4 billion over that period and a decrease in off-budget deficits of about $2.8 billion over the same period. Only the on-budget effects are counted for purposes of enforcing the Statutory Pay-As-You-Go Act of 2010.

The DREAM Act has been introduced several times throughout the past decade, so Sessions’ grievances about not having enough time to review the legislation didn’t really hold water to begin with. The CBO score also shouldn’t come as a surprise. In order to qualify for the DREAM Act, young undocumented immigrants must fulfill a list of requirements that includes either enlisting in the military or going to college. Many will opt for either both or the latter. Rather than working in the underground economy, those who receive a bachelor’s degree will have the opportunity to actually use their college degrees to boost their income which results in increased tax revenue.

With that said, the CBO did note that “the bill would increase projected deficits by more than $5 billion in at least one of the four consecutive 10-year periods [italics added] starting in 2021.” However, the CBO did not provide a complementary estimate of how much money legalized youth would continue to pay into the system after 2020. In other words, the $5 billion long-term cost estimate does not account for the billions of dollars legalized youth would pay in taxes throughout their lifetimes. It’s reasonable to expect that if they contribute $2.8 billion during their first ten years working in the U.S. with a“conditional nonimmigrant” status, this number will continue to grow as they progress in their careers and eventually qualify for legal permanent residency and ultimately citizenship.

Luckily, other experts and academics have provided more insight into the increase in long-term earnings that result from legalization. A recent study by the UCLA North American Integration and Development Center showed that the total earnings of DREAM Act beneficiaries over the course of their working lives would generate approximately $1.4 trillion to $3.6 trillion over a 40-year period. Arizona State University found that people who obtain a bachelor’s degree earn approximately $750,000 more over the course of their lifetime than those who only have high-school diploma. Given that by 2025, our nation will be short 16 million college-educated workers, the DREAM Act may even help the U.S. avoid a potential crisis.

Meanwhile, the alternatives that Sessions supports would cost billions more than even the most outlandish estimates put forth on the DREAM Act so far. The Center for American Progress recently found that a successful policy of mass deportation would total approximately $285 billion within five years alone. It would also cost each American man, woman, and child $922 in new taxes. Mass deportation would reduce U.S. GDP by 1.46 percent and amount to $2.6 trillion in cumulative lost GDP over then years, not including the actual cost of deportation.

andrea nill

Andrea Christina Nill

Since it costs approximately $23,148 for each person to be apprehended, detained, legally processed, and finally transported it would cost about $23.148 billion $25.46 billion to deport the million or so 1.1 million undocumented immigrants who would actually receive legal permanent resident status as a result of the DREAM Act.

It’s doubtful that Sessions will acknowledge any of this data and will instead choose to blindly cling to his ignorant talking points. Yet, it’s possible that the CBO score, together with previous studies, will encourage at least a few Republicans to bypass Sessions’ illogical demands and make the benefits of the DREAM Act a reality.

Andrea Nill

Republished from the Wonk Room with permission.

LA Progressive Streams Live Every Monday @ 3:00 pacific time


  1. Annette says

    Gee, what a great idea, we’ll give amnesty a FOURTH time and maybe somehow that will make foreigners decide to stop sneaking into our country to steal our resources. The other times we gave amnesty to illegal aliens, it just encouraged more people to break the law, but hey, maybe this time will be different.

    Once again, liberals are doing the dirty work of the rich who benefit from this massive influx of workers. Meanwhile, the middle class suffers from the enormous cost of more and more people who are allowed to break the law and put their kids in this untenable position, but who are then rewarded with citizenship.

    Go liberals!

  2. Joe says

    The argument in Ms. Nill’s article harms the chances for improvement in the situation of undocumented people in the U.S. because it continues the tradition of keeping people on all sides of the immigrant rights and non-rights debates from facing up to the causes of chaotic migration to the U.S., especially migration from this hemisphere. The same government-corporate system that exploits many in the U.S. has also been hard at work for decades exploiting and fighting for exploitative conditions and the profits which can be extracted from them in many lands in this hemisphere. Some of those dislocated and oppressed in their home countries make their way here, legally and illegally. They affect labor markets, public services, and society generally. I think most of those effects are positive, but there are fields of work and specific U.S. citizens and residents who are negatively impacted in their jobs (through loss of work and through wage suppression due to a plentiful supply of substitutes). Those negatively effected should be helped. And the policies which produce the immigration should be ended and amends made to the victim countries (but not from taxes on the immigrants or low- and middle-income people here!).

    Talk about and fact up to the real issues. People are in need here, legal status people and illegal status people; people in other lands are being dislocated — often partially or largely by this U.S. system — so that is partly a U.S. responsibility. Let’s not spin in arguments about whether it’s profitable to provide legal status. It’s a duty to treat the immigrants well — and to treat well all who are citizens who did not immigrate but who feel their status or jobs are in danger (regardless of the cause or source of danger).

  3. says

    The present cost in lives and property and benefits far out weighs any gain in “talent” that results from illegal aliens in the US, not to mention the control of the Border by human traffickers and drug smugglers like the Los Zetas and Gulf Cartel.

    If we had 67,000 men and women on the Borders like we do the TSA, rather than just over 20,000, this invasion would stop. Not only do these gangsters and terrorists control our Border to the South, but they have created no man zones in our national parks for growing pot.

    I would rather tax and regulate marijuana grown by citizens to provide revenues for Border security.

    If you think these individuals have talent, then they can leave the US and return via the normal immigration procedures rather than by criminal behaviors.

  4. Wes Tipton says

    Another wonderfully liberal smokescreen to once again hide the facts. Let’s give amnesty to 20+ million illegals, most of whom don’t have jobs, and won’t find jobs in this economy. Then we hand them billions in freebies and entitlements for years so they stay loyal to the party and vote Democrat.
    Every State in this union has long ago revealed how many millions would be saved without the illegals jamming our schools, emergency rooms and hospitals, and sucking up what few jobs are actually out there. Those savings would not only cut crime dramatically, but would far outweight any supposed benefit these people could possibly bring to our economy. Not to mention that this CBO report contradicts most other research done on this issue. But hey, thanks for trying to hoist more far left lunacy on the public…

Leave a Reply

Your email address will not be published. Required fields are marked *