Immigration bill boosts costs of ‘Obamacare’

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The Senate immigration bill will be good for the U.S. economy as a whole, but for individual workers the picture is not as good — in fact, unemployment will rise slightly and average wages will drop over the next decade, according to the Congressional Budget Office’s analysis Monday.

While good news for the federal budget is getting most of the attention, CBO’s official review of the bill being debated in the Senate provides an in-depth look at many of the working parts and found that it would raise the cost of President Obama’s health law.


SPECIAL COVERAGE: Immigration Reform


In particular, the bill will cost $87 billion more in subsidies for immigrants who qualify to buy insurance on the new health exchanges. Newly legalized immigrants are excluded from the exchanges, but several other categories, including guest-workers, would be eligible, CBO said.

Overall, CBO says the bill will benefit the federal budget by nearly $200 billion in the first decade and another $700 billion in the second decade. That’s because, while illegal immigrants will be using more services, they’ll be paying even more in taxes.

CBO says that the bill would end up costing taxpayers if just income taxes were calculated, but the real benefit comes in higher payroll taxes. Those are meant to fund Social Security and Medicare, but the government regularly raids those funds to spend on basic government services.

For workers, the bill is a decidedly mixed picture. Those at the bottom of the economy — essentially, high school dropouts — would see their wages drop as they faced competition from future immigrants and newly legalized workers. Those at the very top, who are usually highly educated, would also see their pay cut.

Those in the middle would likely benefit, though, according to CBO’s analysis.

CBO and the Joint Committee on Taxation, which calculates scores for tax legislation, offered a number of fascinating takeaways, including that illegal immigrants who had been paying taxes while working on-the-books will be less likely to come forward because they might have to pay back-taxes.


SEE ALSO: Speaker John Boehner: House GOP majority must back any immigration bill


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