House Immigration Bill Should Be Offset

The House is poised to vote on the American Dream and Promise Act (HR 6) that would allow certain immigrants to obtain Lawful Permanent Resident (LPR) status. Since the bill would allow affected people to qualify for federal programs, it could cost up to $35 billion over ten years based on CBO estimates of two separate bills that make up HR 6. Lawmakers should offset these costs to avoid adding to the deficit.

The American Dream and Promise Act combines the Dream Act (HR 2820) and the American Promise Act (HR 2821), both of which CBO has previously scored. The Dream Act would allow unauthorized immigrants who came to the U.S. as minors and have been in the country for four years to qualify for LPR status. This bill is estimated to cost $26.3 billion over ten years. Most of the cost (nearly $20 billion) is due to higher enrollment in health programs like Medicaid and the health insurance exchanges, while costs also increase from refundable tax credits, the Supplemental Nutrition Assistance Program (SNAP), and a few other programs, as well as lower income taxes. These costs are slightly offset by higher Social Security payroll tax revenue.

Budget Area Ten-Year Cost/Savings (-)
Health Care Programs $19.4 billion
Refundable Credits $3.7 billion
SNAP $2.6 billion
Income and Medicare Taxes $2.8 billion
Other Costs $3.1 billion
Social Security Payroll Taxes -$5.5 billion
Subtotal, Dream Act $26.3 billion
Health Care Programs $6.1 billion
Social Security $1.3 billion
Refundable Credits $665 million
SNAP $570 million
Income and Medicare Taxes $430 million
Other Costs $129 million
Social Security Payroll Taxes -$950 million
Subtotal, American Promise Act $8.3 billion
Total <$34.6 billion*

Source: Congressional Budget Office. Totals may not sum due to rounding.

*This number represents the sum of the two bills. CBO has stated that if they were combined, their costs would be smaller than this sum because some people would be eligible for Lawful Permanent Resident status under both bills.

The American Promise Act would grant LPR status to those who were eligible for Temporary Protected Status (TPS) or Deferred Enforced Departure (DED) as of the beginning of 2017. These policies allow immigrants from certain countries affected by conflicts or natural disasters to temporarily reside legally in the U.S. The Trump Administration proposed revoking TPS for four countries and DED for Liberia (the only country to which it currently applies) last year, but that policy has been held up by a nationwide injunction since October; however, CBO expects the injunction will eventually be removed. CBO estimates the bill's cost at $8.3 billion over ten years. Like with the Dream Act estimate, most of the cost comes from health care programs, with smaller costs from Social Security and other programs and higher payroll tax revenue slightly offsetting the cost.

CBO has not estimated HR 6 as a whole yet, but it did state in its Dream Act score that there is small overlap between the populations covered by the two bills, so the combined cost would be smaller than the sum of the bills. At the same time, CBO stated that it didn't take into account immigrants with lawful status now (who wouldn't be currently eligible for LPR status under the two bills), but may lose that lawful status and therefore become eligible, which would increase costs.

As we recently wrote in a letter to members of Congress, lawmakers should adhere to pay-as-you-go (PAYGO) rules to avoid making the already unsustainable debt trajectory worse. The House majority deserves credit for restoring the PAYGO rule, and this bill would be subject to a PAYGO point of order under House rules. However, the House passed a rule that waived all points of order against the bill. Rules are only as good as members' willingness to abide by them and lawmakers should not waive PAYGO rules.

While the House doesn't appear to be waiting for a CBO score of the combined bill, the previous scores indicate it will have a combined cost a little less than $35 billion. The additional cost should be offset to avoid adding to the deficit: if a policy is worth doing, it's worth paying for. Lawmakers could either offset it within the context of a broader immigration package or, since the costs are relatively widespread across the budget, they could look to a wide variety of spending cuts or revenue increases to offset HR 6.