iOS app Android app More

DREAM Act Would Reduce Deficit Over Next 10 Years, Says CBO

First Posted: 12/03/10 03:15 PM ET Updated: 05/25/11 07:15 PM ET

Dream Act

WASHINGTON -- A bill to create a pathway to citizenship for the children of undocumented workers would reduce the deficit by $1.4 billion over the next 10 years, according to a Congressional Budget Office report released Thursday evening.

But the bill, known as the DREAM Act, could increase the deficit in the long term as undocumented immigrants gain legal permanent resident status, according to the CBO. The potential price tag is likely to be seized upon by conservatives who oppose the legislation.

Over the next 10 years, the DREAM Act would increase revenues by $2.3 billion by increasing the number of authorized workers. This would lead to a $1.4 billion decrease in the deficit over the 10-year period, the CBO reported.

DREAM Act beneficiaries would be eligible for legal permanent resident status after 2020 if they completed either two years of military service or college-level education. After earning legal permanent resident status, they would be eligible for Medicaid, the Supplemental Nutrition Assistance Program and the federal heath insurance exchanges.

But this would in turn create higher costs for the government, the CBO reported. The CBO estimated the bill would increase projected deficits by between $5 billion and $20 billion between 2021 and 2061 after the first DREAM Act beneficiaries gain legal status.

Many undocumented immigrants currently pay into the system through payroll taxes, but do not receive these benefits in return.

"The goal is to set the rules so everyone is playing by the same rules," said Douglas Rivlin, a spokesman for Rep. Luis Gutierrez (D-Ill.).

Proponents of the DREAM Act argue the CBO report does not account for the revenue increases that will come from the act as beneficiaries enter higher-paying jobs and pay more taxes. A recent study from UCLA showed DREAM Act beneficiaries would generate between 1.4 trillion and $3.6 trillion in income over a 40-year period.

The White House presented a similar argument when asked about the CBO score Friday morning.

"We don't think it fully takes into account what's going to happen when these people enter the work force and begin to make contributions to the economy," Cecilia Munoz, White House director of intergovernmental affairs, said on a conference call.

Still, conservatives will likely use the CBO's deficit number to criticize the bill, arguing it proves that the bill would create higher costs in the long term by allowing more immigrants to become legal residents.

Rep. Steve King (R-Iowa), who will helm the House immigration subcommittee next session, claimed in a statement Wednesday that Democrats were trying to obscure the potentially high costs of the bill. King charged that Democrats were keeping private a much less favorable CBO analysis that was done on an earlier version of the legislation.

"There are reports that Senate Democrats are covering-up an analysis showing that granting illegal aliens amnesty under the DREAM Act will cost upwards of $20 billion," King said. "If these reports are true, Democrats are willfully misleading Members of Congress, and the American public, about the costs of their open-borders agenda in order to secure support for their controversial amnesty legislation."

The House and Senate are expected to vote on the bill next week. Senate Majority Leader Harry Reid (D-Nev.) delayed the bill after Senate Republicans pledged to block all legislation not related to taxes until the Bush tax cuts had been determined.

FOLLOW HUFFPOST POLITICS
Subscribe to the HuffPost Hill newsletter!