The cost of reform

The CBO has released a preliminary review of the comprehensive immigration legislation and its impact on the federal budget.
From the report:

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) have conducted a preliminary review of Senate Amendment 1150, in the nature of a substitute for S. 1348, the Comprehensive Immigration Reform Act of 2007. CBO plans to release a more detailed and formal cost estimate for the legislation in the next several days. In the meanwhile, we can provide the following preliminary information:
• CBO and JCT estimate that enacting S. Amdt. 1150 would increase federal direct spending by $13 billion to $17 billion over the 2008-2012 period and by $32 billion to $38 billion over the 2008-2017 period. Over the 10-year period, about 4 percent of those totals for direct spending would be for Social Security benefits, which are classified as off-budget. The single largest component of the expected direct spending is for outlays from refundable tax credits, estimated by JCT.
• CBO and JCT estimate that enacting the substitute amendment would result in a net increase in federal revenues of $15 billion to $19 billion over the 2008-2012 period and a net increase of $70 billion to $75 billion over the 2008-2017 period. Increased revenue from Social Security payroll taxes, which are classified as off-budget account for most of the changes in revenues over the 10-year period

S. Amdt. 1150 would impose intergovernmental mandates, as defined in the Unfunded Mandates Reform Act (UMRA), because it would preempt state and local authority and require states, local, and tribal governments to verify the work eligibility of employees. CBO estimates that the cost, if any, of complying with the preemptions would be small. The cost of complying with the requirements to verify work eligibility would depend on regulations to be developed by the Department of Homeland Security (DHS). Until the regulations are developed, CBO cannot determine whether the total costs to state, local, and tribal governments would exceed the annual threshold established in UMRA ($66 million in 2006, adjusted annually for inflation).
• The amendment also would impose private-sector mandates, as defined in UMRA, on employers and other entities that hire, recruit, or refer individuals for employment. The most costly mandate would require all employers and other entities to verify the employment eligibility of workers. Based on the large number of individuals that employers and other entities would be required to verify under the bill, CBO expects that the aggregate direct costs of the mandates would exceed the annual threshold for private-sector mandates ($131 million in 2007, adjusted annually for inflation) in at least one of the first five years the mandates are in effect.


TK: There will be both increased revenues and greater federal spending with immigration reform. Employers will pay more to verify worker eligibility. Ag employers will gladly do so if there are in fact eligible workers available.