The American Action Forum (AAF), a center-right think tank, has released a study which says the immigration reform bill introduced by the "Gang of Eight" and currently being considered by the Senate could save the United States $410 billion. Gordon Gray, director of fiscal policy at the AAF, wrote that "benchmark immigration reform would increase GDP by nearly 1 percentage point, increase per capita income by $1,700, and reduce the federal deficit by $2.7 trillion."
In supporting his claim, Gray cited a preliminary estimate of potential financial effects on Social Security which the Office of the Chief Actuary for that program released on May 8th. The estimate said if the "Gang of Eight" proposal were to pass into law, by 2024 the level of GDP would be 1.63 percent higher than would otherwise be the case and by 2023, GDP would be 1.6 percent higher than would otherwise be the case.
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"Based on this information it is possible to compare baseline growth rates with those necessary to achieve the higher levels estimated by the Office of the Chief Actuary, which works to an annual average difference of about .16 percentage points," wrote Gray.
The AAF attributes the growth in GDP to population growth and labor force growth, as formerly undocumented immigrants begin to earn more, create more capital and consume more after enjoying the rights afforded to them by legal status and citizenship. The think tank indicates that immigrants' greater tendency to start a new business and have more children than non-immigrants may raise the standard of living.
"Population growth, more immigrants and more folks working gooses the economy," Gray told the Huffington Post.
Earlier this month, the AAF joined fiscal conservative groups Americans for Tax Reform, the Cato Institute and the Kemp Foundation in criticizing a study on immigration reform released by the Heritage Foundation - perhaps the foremost conservative think tank - which concluded that the reform would cost the US $6.3 trillion over 50 years. Douglas Holtz-Eakin, president of the AAF, called it misleading because it did not make use of dynamic scoring, a tool which predicts the productive behavior of economic actors which might come as a result of policy incentives. Holtz-Eakin described the Heritage Foundation's view of immigrants to the Washington Post as one in which "there is no American dream. They start in poverty. They end in poverty. Their kids are in poverty."
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