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CBO on the ‘uncertainty’ of its own immigration estimates

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Beltway Confidential,Philip Klein,Immigration,Federal Budget,Border Security,Analysis,CBO

On Monday, the Congressional Budget Office released a preliminary estimate of the effects of a border security amendment to the immigration bill from Sens. John Hoeven and Bob Corker. The headline is that the CBO estimates that adopting the amendment would result in about $40 billion less in deficit reduction over the next decade than if the immigration bill were passed without the amendment due to increased enforcement spending. Additionally, the CBO found it would also reduce illegal immigration by an undetermined amount. But it’s also worth noting an important caveat from the CBO.

“The uncertainty associated with future population flows under current law, S. 744 as approved by the committee, or the amendment is very great,” the CBO cautioned. And this cautionary tone was also reflected in its analysis of the earlier version of the Senate bill from last week:

 “The effects of immigration policies on the federal budget are complicated and uncertain, and they become even more so as they extend farther into the future.”

 “The projections of the budgetary impact and other effects of immigration legislation are quite uncertain because they depend on a broad array of behavioral and economic factors that are difficult to predict.”

 “Because the estimates of population changes and budgetary effects that would result from enacting the legislation are very uncertain—even in the first 10 years following enactment—CBO’s estimate for the second decade following enactment should be viewed as falling in the middle of a wide range of possible outcomes.”

“In light of the uncertainties surrounding the effects of S. 744 in the very long run, CBO and JCT are not able to provide estimates of budgetary effects for the legislation beyond 2033.”

The CBO, to the best of its ability, tries to make projections that are of use to lawmakers, journalists and policy analysts. But it’s important to keep in mind that estimating the effects of changes to the immigration system are subject to even more uncertainty than typical legislation, which is already subject to a lot of uncertainty. There are so many moving parts involved in immigration policy and making estimates involves trying to predict human decision making on a mass scale.

Providing accurate estimates requires the CBO to predict how many people would enter or remain in this country illegally over the next 10 to 20 years if nothing were done about our immigration system. Then, analysts have to figure out how changes in policy would affect millions of people who we don’t know much about. How would people who entered this country illegally and do jobs such as small construction work, residential gardening, or house cleaning, react to the prospect of being able to become legalized?  Would they jump at the chance? Or decide that they’d rather not bother with going through all the paperwork and having to pay fines and back taxes? If the current bill passes, seven years from now, how will it affect people’s decision as to whether to sneak across the border or overstay a visa? Analysts can’t even say for sure how many people are in the country illegally today, so how can they realistically estimate how millions of people who we can’t reliably survey would react to various changes in the law, let alone, predict future incomes, project how much taxes they would pay and how many government benefits they’d use?

This isn’t to say that estimates should be ignored or that the CBO should be demonized. But it’s just to recognize that, however satisfying, immigration estimates are of very little predictive value.

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Author:

Philip Klein

Commentary Editor
The Washington Examiner