March 12, 2014
As ordered reported by the House Committee on the Judiciary on June 27, 2013
H.R. 2131 would amend immigration laws to increase the number of highly skilled noncitizens who could receive employment-based immigrant (permanent) and nonimmigrant (temporary) visas to live and work in the United States. In addition, H.R. 2131 would change the numbers of family-based immigrant visas available to certain categories of noncitizens. The bill also would eliminate the immigrant visas made available through the Diversity Visa program. On net, CBO estimates that enacting H.R. 2131 would increase the U.S. population by nearly 1 million in 2024 and in 2034.
Budgetary Effects, 2014-2024
CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting H.R. 2131 would increase revenues by $118 billion over the 2014-2024 period. That increase, largely reflecting additional collections of income and payroll taxes, would result primarily from an expansion in the size of the U.S. labor force.
CBO and JCT estimate that enacting H.R. 2131 also would increase direct spending by $8 billion over the 2014-2024 period. Most of those outlays would be for increases in refundable tax credits stemming from the larger U.S. population under the bill.
On balance, CBO and JCT estimate that enacting H.R. 2131 would reduce budget deficits through the changes in revenues and direct spending by about $110 billion over the 2014-2024 period. Pay-as-you-go procedures apply to the bill because it would affect direct spending and revenues.
CBO estimates that implementing the bill also would affect spending subject to appropriation. CBO expects that the Department of Homeland Security (DHS) and the Department of State would require about $50 million over the 2015-2019 period to begin processing the increased number of applications for visas resulting from the bill. Additionally, the bill would increase discretionary costs for the Pell Grant program by $68 million over the 2014-2024 period, as the increase in the population would lead to more people attending college.
Following the long-standing convention of not incorporating macroeconomic effects in cost estimates—a practice that has been followed in the Congressional budget process since it was established in 1974—cost estimates produced by CBO and JCT typically reflect the assumption that macroeconomic variables such as gross domestic product (GDP) and employment remain fixed at the values they are projected to reach under current law. However, because H.R. 2131 would materially increase the size of the U.S. labor force, CBO and JCT relaxed that assumption by incorporating in this cost estimate their projections of the direct effects of the bill on the U.S. population, employment, and taxable compensation.
Budgetary Effects, 2025-2034
CBO and JCT generally do not provide cost estimates beyond the standard 10-year projection period. However, H.R. 2131 would continue to reshape the composition and size of the U.S. population and labor force in the decade following 2024, so CBO and JCT have extended their estimate of the effects of this legislation for another decade. CBO and JCT estimate that enacting H.R. 2131 would reduce federal deficits through changes in revenues and direct spending by about $400 billion over the 2025-2034 period. That effect would be almost entirely the result of higher income and payroll taxes stemming from a larger workforce; direct spending would be little changed from what it would be under current law.
H.R. 2131 would impose intergovernmental and private-sector mandates, as defined in the Unfunded Mandates Reform Act (UMRA), by requiring some employers of temporary foreign workers to pay additional fees and other employers of temporary foreign workers to pay higher wages than required under current law.
Based on information from industry experts, DHS, and the Department of State, CBO estimates that the aggregate costs for both public and private employers to comply with the mandates would fall below the annual thresholds established in UMRA for intergovernmental and private-sector mandates ($76 million and $152 million in 2014, respectively, adjusted annually for inflation).