The plan’s increase in immigration results in increased federal spending, expansion of social welfare programs like Medicaid, Medicare, and health insurance subsidies

(Congressional Budget Office, “How Changes in Immigration Policy Might Affect the Federal Budget,” pg online @ http://www.cbo.gov/sites/default/files/cbofiles/attachments/49868-Immigration2.pdf //um-ef)

What Federal Benefits Can Noncitizens Receive and What Taxes Do They Pay? Under current law, only qualified aliens—primarily comprising LPRs, refugees, and people who have been granted asylum—and some types of temporary residents are eligible to participate in most federal benefit programs, provided they meet other program-specific eligibility requirements. (For some programs, those requirements include waiting periods of several years following the attainment of qualified alien status). Some noncitizens who are not qualified aliens but are lawfully present (for example, people who have been approved for deferred action) are eligible to receive Social Security and Medicare benefits if they qualify on the basis of their age and work history. Other noncitizens are not eligible to receive benefits from most federal programs; exceptions include emergency health care services provided through Medicaid, some benefits through the Children’s Health Insurance Program (CHIP), and some refundable tax credits. However, noncitizens’ U.S.–born children are eligible for the same federal benefits that are available to other U.S. citizens. (See Table 1 for an overview of the eligibility requirements for noncitizens.) Most noncitizens who live and work in the United States are subject to taxation—including income taxes, payroll taxes, excise taxes, and estate and gift taxes. The specific taxes for which they are liable, and in some cases the amount of those taxes, depend on the type of visa they hold and how long they have been in the country. How Might Proposals to Modify the Immigration System Affect the Federal Budget? Proposals to modify U.S. immigration policy vary greatly in scope and their potential impact on the federal budget. In this report, CBO discusses the possible effects that changes to immigration policy would have on several major federal spending programs and on federal tax revenues. Among the programs and benefits that could be affected:  Health care programs for low-income people— including Medicaid, CHIP, and subsidies for health insurance (which include premium and cost-sharing assistance for health insurance purchased through the exchanges that were established in 2014 under the Affordable Care Act, or ACA),2  The Supplemental Nutrition Assistance Program (SNAP),  Social Security,  Supplemental Security Income (SSI),  Medicare,  Pell grants and federal student loans,  Unemployment insurance, and  Refundable tax credits. Each program has its own set of eligibility rules and criteria, which determine how changes to federal immigration policy would affect participation in the program and spending by the government. Consequently, such policy changes could affect spending in varying ways both in the near term and over time. Spending for some programs would change almost immediately upon enactment if more noncitizens were allowed to enter the country, whereas spending for other programs would not change much for a while: For example, under some proposals, foreign-born people who entered the country lawfully after the policy change was implemented would automatically be eligible for emergency Medicaid benefits and subsidies for health insurance purchased through exchanges; they also would begin paying income and payroll taxes as soon as they entered the country. In contrast, additional spending for Social Security and Medicare would occur mostly after the first few decades, once new entrants had been in the workforce for a sufficient time and reached the age at which they were eligible to claim benefits. Because most noncitizens who live and work in the United States are subject to taxation, changes to federal immigration policy would affect the amount of revenues the government collects. How total revenues collected by the federal government would change under new immigration policy would depend on the resulting changes in the size of the U.S. population, the types of people who would be permitted to work under those new laws, and other considerations. A policy that led to a significant increase in the working-age population would expand the labor force and lead to a significant amount of additional revenues from income and payroll taxes. This report does not address in detail how a change in immigration policy might affect federal spending or tax revenues through its effects on the broader economy—as evidenced in changes to gross domestic product, employment, and total wages. In some instances, when those effects would probably be significant, CBO and the staff of the Joint Committee on Taxation (JCT) have relaxed the long-standing convention of not incorporating such macroeconomic effects in cost estimates. Immigration legislation also could have a broader set of effects on output and income that are not reflected in cost estimates. Those additional economic effects include changes in the productivity of labor and capital, the income earned by capital, the rate of return on capital (and therefore the interest rate on government debt), and the differences in wages for workers with different skills. Those effects and their estimated consequences for the federal budget have, on occasion, been discussed in separate reports regarding the proposed legislation. Earlier this month, the House of Representatives adopted a rule that requires CBO and JCT to include the budgetary feedback of any macroeconomic effects in cost estimates for some major pieces of legislation.3 Legislation that would make significant changes in immigration policy might be covered by this rule; if so, future cost estimates provided to the House for such legislation will, to the extent practicable, incorporate the sorts of effects described here. Because immigration proposals could affect both spending and revenues, some might result in net budgetary savings whereas others might result in net budgetary costs. However, assessing the net effect on the federal budget of changes in immigration policy is complicated by a variety of factors, including a lack of reliable data about the number of unauthorized residents currently in the country and the extent to which LPRs, temporary residents, and unauthorized residents use government programs. This report focuses on proposals that would change the status or composition of three populations of noncitizens: LPRs, temporary workers, and currently unauthorized residents. Changing the Criteria for Admitting Lawful Permanent Residents. According to government estimates, about 13 million people currently live in the country as LPRs. Changes to visa policies that broadly affected the characteristics of new LPRs—for example, by shifting the type of permanent visas awarded from family-based preferences to work-related or merit-based preferences— might have a significant impact on the demographic composition of LPRs and, as a result, on their use of federal programs and payment of taxes. Under current law, permanent residents who meet program requirements are generally eligible to receive benefits after a specified waiting period or period of employment; thus, an increase in the number of LPRs would ultimately increase spending for programs such as Social Security and Medicare. Whether those residents qualify for certain means-tested benefits (such as those provided by Medicaid and SNAP) is determined, in part, by their income. If the policy change resulted in more LPRs with sufficiently low income to qualify for benefits, costs for those federal programs also would increase. In the first five years, the biggest impact on spending would probably involve the health insurance subsidies; after that, changes in spending for other programs would have increased importance. Tax revenues also would change if the visa system was altered, though whether revenues increased or decreased would depend on the details of the policy. Changes that significantly increased the net flow of foreign-born workers into the United States, and therefore increased the total population, would lead to an increase in the supply of labor, which would have broad effects on the economy and the budget. The magnitude of those effects would depend on factors such as the new immigrants’ rate of participation in the labor force, their unemployment rate, the average number of hours they work, and their average wage.