The number of people entering the United States has increased sharply in recent years. Most of the increase comes from a surge in people whom the Congressional Budget Office categorizes as other foreign nationals. Some of them have received permission to enter or remain in the country, and some have not; more detail on the composition of immigrants in that category is provided below. On the basis of pre-2020 trends, CBO would have expected the net immigration of people in that category to average around 200,000 per year. In the agency’s projections, the net immigration of other foreign nationals exceeds that rate by a total of 8.7 million people over the 2021–2026 period.
In this report, CBO describes how that 2021–2026 surge in immigration affects its baseline budget and economic projections for the 2024–2034 period. That is, this report looks at the incremental impact of the immigration surge and not at the effects of all people who immigrated in those years or who previously immigrated and were already residing in the United States. In addition, only the surge’s effects on federal revenues, mandatory spending, and interest on the debt are examined in detail. The report provides a broad assessment of possible effects on federal discretionary funding; it does not include estimates of the surge’s effects on state and local budgets.
To isolate the effects of the increase in immigration in its baseline budget projections and the economic forecast that underlies them, CBO constructed a counterfactual scenario in which that increase does not occur; instead, from 2021 to 2034, the net immigration of people in the other-foreign-national category totals 200,000 people per year (which, from 2027 on, is the same as in the baseline projections). The agency then created economic and budget projections for that counterfactual scenario and compared those outcomes with its economic forecast and baseline budget projections. The differences between outcomes under the two scenarios represent CBO’s estimates of the effects of the surge in immigration.
CBO’s estimates of the effects of the immigration surge on the federal budget and the economy are very uncertain. The agency will continue to evaluate new data and other information as it becomes available.
