Immigration can reduce the U.S. budget deficit

Immigration can reduce the U.S. budget deficit by increasing tax revenues.

In this regard, the U.S. federal budget deficit will reach US$ 1.9 trillion this fiscal year, according to an updated projection released Tuesday by the Congressional Budget Office (CBO).

That’s 27%, $400 billion more than the agency estimated in February.

But in the midst of it all, immigration may reduce the U.S. budget deficit.

According to the CBO report the recent surge in immigration is expected to reduce deficits by a net total of US$ 0.9 trillion over the period 2024 to 2034.

Migrant apprehensions down 25% since Biden announced asylum restrictions, new CBP figures show

The agency analyzed an immigration category that includes people who entered the U.S. illegally and have not obtained permanent legal status.

These are people who entered legally through the use of parole authority and may be awaiting proceedings in immigration court.

Immigration can reduce the U.S. budget deficit how?

In addition, people who had temporary legal status but remained in the country after it expired.

The CBO estimates that net immigration of people in this category will total 2.4 million in 2024 and decline in subsequent years.

Between 2021 and 2026, the agency projects that the number of these immigrants will be 8.7 million higher than it would have been if net immigration had remained at the expected level.

However, it cautions that these projections are subject to “much uncertainty.”


The increase is expected to raise revenues by about $1.2 trillion over the next decade, mainly because immigrants will pay income and payroll taxes on their earnings, the agency projects.

In that regard, it warns, amid criticism, that immigration can reduce the U.S. budget deficit.

It estimates that about half of the growing number of immigrants will be authorized to work and notes that people without work permits will pay some taxes, although they are less likely to do so.

In addition, increased immigration will lead to increased economic activity, which will generally increase income and tax revenues, the agency forecasts.

Most of the increase in the 2024 fiscal deficit is due to four factors that are expected to boost projected spending.

The largest is a $145 billion increase due to changes the Biden administration made to student loan repayment plans and a proposed new forgiveness program that would waive some accrued interest for millions of borrowers.

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