A clear picture of the fiscal cost of immigrants is particularly important, given the ongoing border crisis. The Congressional Budget Office estimates that the border surge will number 8.7 million unlawful immigrants between 2021 and 2026. The original analysis in this report finds that the border crisis will cost an estimated $1.15 trillion over the lifetime of the new unlawful immigrants—a cost larger than the entire U.S. defense budget and almost equal to the cost of Social Security in 2023.
This report quantifies the fiscal impact of common immigration reform proposals:
Mass deportations would significantly reduce the national debt over the long run, but a policy of selective legalization, coupled with mass deportations, would be even more fiscally beneficial, reducing the debt by about $1.9 trillion.
Given the education, age, and earnings of H-1B visa recipients, doubling the number of H-1B visas for just one year would reduce the budget deficit by $70 billion over the long run—and by another $70 billion each year thereafter.
The most beneficial immigration policy change would be to exempt STEM graduate degree holders from green-card caps, increasing immigration by some 15,000 people per year and reducing the visa backlog; this would reduce the deficit by $150 billion in the first year and $25 billion each year thereafter.
Eliminating refugee resettlement and permanent immigration by parents of U.S. citizens would reduce the debt by a combined $40 billion in net present value every year.
Congress could upskill the existing immigration flow by eliminating the diversity visa category and increasing the visas available to the top employment-based categories, and requiring immigrants to have earned a high school diploma to be eligible for a family visa, reducing the national debt by over $60 billion per year.
By enacting a selectionist immigration policy—which requires securing the border from unlawful immigration, reducing low-skilled immigration, and expanding high-skilled immigration—the U.S. could reduce future federal debt by trillions of dollars over the long run. This report proposes a legislative package that provides over $2 trillion in net present value during the first year and over $200 billion each subsequent year, without accounting for the additional productivity growth resulting from high-skilled immigration. Furthermore, under these reforms, the annual number of immigrants who are new permanent residents decreases by about 15% after a temporary legalization program and a partial clearing of the employment-based visa backlog. Over the long term, annual legal immigration decreases under this plan from approximately 1 million in FY 2019 to approximately 860,000.
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