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Including immigration in the budget reconciliation process could expand the economy by billions of dollars

Using the budget reconciliation process to provide a pathway to citizenship for Dreamers, TPS holders, farmworkers, and essential workers would significantly expand the U.S. economy and boost federal, state, and local tax revenue

July 26th, 2021

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Leaders in the Senate, including Senate Majority Leader Chuck Schumer (D-NY) and Budget Committee Chair Bernie Sanders (I-VT), have proposed including funding for immigration reform, including a proposed pathway to citizenship for certain immigrants who are undocumented, in FY2022 budget resolution. The resolution is expected to allow the Senate to pass this critical legislation through a reconciliation process with a simple Senate majority.

FWD.us estimates that the U.S. economy would increase by $121 billion annually if Dreamers, TPS holders, farmworkers, and undocumented essential workers were U.S. citizens, including multi-billion expansions in a dozen state economies, and boosting federal, state, and local tax revenue by $31 billion annually. Including legislation for these groups in the budget reconciliation process could allow nearly 7 million immigrants to access a pathway to citizenship.

Using budget reconciliation to pass immigration reform could add $121 billion to the economy each year

Including immigration in the budget reconciliation process would have a clear economic benefit, growing the economy and boosting government revenue.

Using our economic impact tool, FWD.us estimates that if Dreamers, TPS holders (including those individuals eligible for but not enrolled in TPS), farmworkers, and undocumented essential workers were able to become U.S. citizens, they would contribute an additional $121 billion to the economy each year. If only Dreamers, TPS holders, and farmworkers were included, the additional economic contribution would be $52 billion. ²

Note: Because of small populations, estimates for some undocumented groups in some states and Congressional districts are unavailable. Economic contribution is spending power after estimated federal, state, and local tax payments. Taxes do not take into account differences in local taxation rates. Differences by citizenship status are based on multipliers from SIPP data. See Methodology for more details.

Source: FWD.us analysis of U.S. Census Bureau’s 2018 Survey of Income and Program Participation (SIPP) and augmented 2019 American Community Survey (ACS) data.

We estimate that Dreamers, TPS holders, farmworkers, and undocumented essential workers would also contribute an additional $19 billion in federal and payroll taxes annually if they were U.S. citizens. If the immigration reconciliation proposal were restricted only to Dreamers, TPS holders, and farmworkers, this group would contribute approximately $7 billion in additional federal tax contributions every year.

As the tool above shows, several states would also make significant economic gains if Congress includes immigration reform in the budget reconciliation process and these undocumented groups—Dreamers, TPS holders, farmworkers, and essential workers—were able to become U.S. citizens, with multi-billion dollar increases being made to the economy in a dozen states, including:

• California – $25 billion increase in annual economic contribution
• Texas – $20 billion
• Florida – $9 billion
• New York – $7 billion
• Illinois – $5 billion
• New Jersey – $5 billion
• Washington – $4 billion
• Georgia – $4 billion
• Maryland – $3 billion
• North Carolina – $3 billion
• Arizona – $3 billion
• Virginia – $3 billion

Additionally, this group of undocumented immigrants would contribute an additional $12 billion in state and local taxes across the nation on top of what they are already paying each year. Under a more limited pathway (Dreamers/TPS holders/farmworkers), state and local tax revenue would increase by $4 billion annually.

A broad pathway to citizenship for these groups could include nearly 7 million people

FWD.us estimates that an immigration proposal providing a broad pathway to U.S. citizenship would not only have the greatest economic benefit, but would also cover a substantial share of the total undocumented population. A pathway for Dreamers, TPS holders, farmworkers, and undocumented essential workers would cover roughly 6.9 million undocumented immigrants, which constitutes an estimated 69% of all undocumented immigrants living in the U.S. today. Excluding essential workers other than farmworkers would mean a much narrower pathway, which would cover only 3.1 million undocumented immigrants, or approximately 31% of the undocumented population.

The numbers are clear: creating a pathway to citizenship for undocumented immigrants will grow the economy, and help keep millions of families together across the country.

Creating a pathway to citizenship is an urgent priority, and the economic and fiscal benefits of this immigration reconciliation proposal make it appropriate for inclusion in the budgetary process. Senate leaders should ensure that this pathway to citizenship remains in the budget resolution and to leverage all avenues available, including reconciliation, to pass meaningful immigration reform this year.

GET IN TOUCH WITH US:

Phillip Connor

Senior Demographer

phillip@fwd.us

Notes

1. For a full explanation of how we define and develop estimates of various categories of immigrants, read our Methodology. Note that “Dreamers” are defined as undocumented immigrants who came to the U.S. in 2019 or earlier, at 17 years or younger, and are either in school or have completed the equivalent of a high school diploma. This group is similar to the population eligible for a pathway to citizenship under Title I of the American Dream and Promise Act (H.R. 6), which includes individuals enrolled in, eligible for, and excluded from the Deferred Action for Childhood Arrivals (DACA) program. The TPS population is defined as undocumented immigrants granted or eligible for Temporary Protected Status, including TPS countries with designations as of May 1, 2021.This TPS population is similar to those individuals eligible for a pathway to citizenship under Title II of H.R. 6. “Essential Workers” include workers in industries defined as “essential” by the Department of Homeland Security.
2. Similar populations covered by the House-passed American Dream and Promise Act (H.R. 6) and Farmworker Modernization Act (H.R. 1603)