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Immigration bill could cut deficits by $175 billion

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NEW YORK (CNNMoney) — A bipartisan Senate bill that would create a path to legal status for many of the 11.5 million undocumented immigrants in the United States could reduce deficits by $175 billion over the first 10 years and by at least $700 billion in the second decade.

That’s according to an analysis released Tuesday by the nonpartisan Congressional Budget Office.

The CBO, working with the congressional Joint Committee on Taxation, estimates that 8 million unauthorized residents would become legal in the first decade.

In addition, the report estimates the bill would boost the U.S. population by a net of 10.4 million people by 2023 and by 16 million by 2033.

The rise in legal immigrants and the U.S. population overall would increase spending on refundable tax credits, Medicaid and health insurance subsidies, among other federal benefits. And it would increase spending for the implementation and enforcement of the bill’s provisions.

At the same time, however, the surge would create even more tax revenue by way of income and payroll taxes, the agency noted.

The CBO did caution, however, that “the net impact of the bill on federal deficits would depend on future actions by lawmakers.”

The report didn’t analyze the effects of the increased population on state and local governments but allowed that there would be both positive and negative effects.

In addition, the CBO estimates that the bill, while increasing economic output, would also decrease average wages before 2025 but increase them thereafter. It would also “slightly raise” the unemployment through 2020.

The legislation, known as the Border Security, Economic Opportunity and Immigration Modernization Act, was introduced in the Senate by a bipartisan group of senators known as the Gang of 8.

The bill has the support of the Obama administration and is being debated in the Senate. If it passes that chamber, it will move to the House, where it could face considerable opposition.

Republicans are divided over immigration reform. Among their concerns: border security and the idea of creating a legal path to citizenship for those who entered the country illegally.

On Tuesday, House Speaker John Boehner said he wouldn’t bring an immigration bill to a vote unless he know it has the support of a majority of House Republicans.

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