As U.S. Congress continues to go back and forth over an immigration and border deal, economic experts have expressed concern about incoming immigration cuts and their potential effect on the economy.
Immigration Negotiations in the U.S.
As the recent bipartisan Senate deal over immigration and border policy inches closer to being passed, experts are arguing that it could have adverse effects on the U.S. economy.
Tighter Grip on the Border
Republican lawmakers have pressed for immigration cuts and tighter border policies, and some are even arguing that the recent proposal is not aggressive enough.
Experts Disagree
However, some experts disagree and argue that the proposed bill is overreaching and that its timing could have serious adverse effects on the U.S. economy.
Population Growth via Immigration
“The vast majority of population growth that we have in the U.S. right now is from immigration,” argued Wendy Edelberg, a senior fellow of the Brookings Institution and director of economic policy initiative The Hamilton Project.
Key to the Labor Force
“This is a key reason why our labor force grew in the past couple of years, and if it continues, it will be a key reason why our labor force continues to grow,” she continued.
New Workers and Economic Output
The Congressional Budget Office (CBO) supported Edelberg’s claims in a new report that identified high immigration as a major source of new workers and higher economic output in the workforce.
Positive Projections for the Coming Decade
The same report estimated that immigration would introduce 5 million people to the labor force over the next decade and that there would likely be a reduced federal budget deficit in the same period due to immigration.
Increase in GDP and Federal Revenue
The surge in immigration rates since the COVID-19 pandemic has helped to increase U.S. gross domestic product to nearly $7 trillion and federal revenue to almost $1 trillion.
Stoking Political Divisions
Despite the arguable economic benefits that the U.S. has reaped due to immigration, immigration and border policy under the Biden administration has proved to be an extremely divisive topic.
More Than Just GDP
For example, the effect that immigration has on federal spending is a more complicated topic, particularly how it can disproportionately affect different localities.
Edelberg acknowledged that “there are many things that people care about besides the size of GDP.”
It Can Also Be a Burden
“While immigration is great for the aggregate economy and in fact, great for the federal budget,” she said.
“Certain kinds of immigration put a significant burden on localities that don’t get all of the revenue benefits, but certainly feel all of the spending challenges that greater immigration creates.”
Responsible Federal Budget
Marc Goldwein, a senior policy director at the Committee for a Responsible Federal Budget, said, “What we’re seeing with this route of immigration, what CBO thinks is happening is, in the near term, the immigration increases the size of the economy but reduces the size of the economy per person. And in the long term, it maybe increases both.”
Reducing the Deficit
“When young immigrants come to the country, assuming that they’re working legally, or are able to illegally acquire a Social Security number, they pay taxes,” he added.
“And so those taxes reduce the deficit, and then as they get older, they’ll eventually collect Social Security and Medicare.”
Biden Takes the Blame
Republicans have blamed President Biden for record numbers of Latin American immigrants flooding the U.S.-Mexico border in recent years, contributing to overwhelmed resettlement services and financial drain on sanctuary cities like New York, Chicago, and Denver.
Years of Immigration Increases
However, the trend of increased border counters and crossings began in 2019, under President Trump, only decreasing in 2020 due to Covid-related shutdowns on both sides of the border.
Issues South of the Border
It then continued into 2021 through to 2024, and immigration and geopolitical experts have agreed that the growing rates of immigration from Latin America are a result of the aftermath of the COVID-19 pandemic and increasing political and economic instability in many of these countries.
Still on the Fence
Those same experts are still on the fence as to when they predict that southern border immigration numbers will die down.
Uncertain Estimates
CBO numbers project a continued surge until 2026, but the office’s director, Phillip Swagel, has admitted that their estimates are “uncertain.”
Wait for the Election
Political advocates, on the other hand, are pointing to the incoming 2024 presidential election.
Many believe it will be the future border policies of the next president, likely to be either Biden or Trump, that will be one of the deciding factors for immigration trends.
The Next President
Cris Ramón, an immigration advisor for the Latino non-profit advocacy group UnidosUs, has said that a second term for Trump will likely mean “very strong emphasis on shutting down legal migration, and adopting even more hard-line policies at the border.”
Biden’s New 401(k) Rule: Employers Frustrated as Retirement Planning Responsibilities Shift
The latest Biden administration rule on 401(k) plans is reshaping how employers manage retirement plans. It’s a complex scenario requiring a fresh understanding of fiduciary duties and provider relationships. This rule aims to protect employees but also imposes new responsibilities on employers. Biden’s New 401(k) Rule: Employers Frustrated as Retirement Planning Responsibilities Shift
Elon Musk: New Immigration Bill ‘Enables Illegals to Vote’
Elon Musk is calling for prosecutions after the text for a new senate bill on immigration was released. Musk accused the new bill of “enabling illegals to vote.” Elon Musk: New Immigration Bill ‘Enables Illegals to Vote’
Colorado Officials Reject Sanctuary City Status, Warn Against ‘Dangerous Game’
With increasing numbers of migrants arriving in Colorado, public officials have rejected any notion of the state becoming a sanctuary for migrants and asylum seekers. Colorado Officials Reject Sanctuary City Status, Warn Against ‘Dangerous Game’
Disney Challenges DeSantis’ “Don’t Say Gay” Rule With a Hefty Lawsuit
Disney is set to appeal its refusal for a lawsuit against Ron DeSantis, who stripped the company of its rights for disagreeing with the Governor’s views on the teaching of sexual orientation in classrooms. Disney Challenges DeSantis’ “Don’t Say Gay” Rule With a Hefty Lawsuit
Trump on the Attack as 21 Million Americans Flock to Obamacare, Biden Pushes Forward
An unprecedented surge in health plan enrollments has reignited former President Donald Trump’s commitment to dismantling the program should he secure the GOP nomination once again. Trump on the Attack as 21 Million Americans Flock to Obamacare, Biden Pushes Forward
The post U.S. Economy Needs Immigration, Cuts Threaten Labor Force Growth and GDP first appeared on From Frugal to Free.
Featured Image Credit: Shutterstock / Aleksandr Ozerov.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
