How will the U.S. deal with Immigration Policy?

How will it affect us economically and socially?

The intuition is simple: A historic border surge let millions of illegals in, so would deporting them recover the cost? The evidence is not simple. The costs and benefits fall on different governments and different timelines and the real decision was never a straight choice between removal and doing nothing.

Ask most Americans what the immigration surge of the early 2020s will cost the country if it isn’t reversed, and the answer comes quickly: a fortune in services, lower wages, more crime and a permanent drain on resources. Ask the Congressional Budget Office the same question and you get a stranger answer one involving higher GDP and a smaller federal deficit. Both cannot be the whole truth, and neither one is. The honest picture is that this surge tends to distribute its costs and benefits unevenly across various levels of government for decades, and that the policy question facing the country is not a binary one that it’s usually framed as.

Between 2021 and 2024 the United States experienced an illegal immigration wave without a clear previous modern day precedent, and by 2023 the illegal population reached a record which the Pew Research Center puts it at (1) about 14 million. There are two facts about that number worth considering before weighing what to do about it. First, it is a total, not necessarily a Biden-era arrival count; border encounters are not the same as people admitted and staying legally. Second, the flow has already reversed on its own: Brookings estimates that net migration (2) turned negative in 2025 for the first time in at least half a century. The question, now is less about stopping the flow than about what to do with the people already here.

The macro surprise is that the surge grew the economy and shrank the deficit: The finding that most confuses the intuitive story comes from Congress’s own nonpartisan scorekeeper the CBO. Analyzing the 2021–2026 surge, the Congressional Budget Office projected that it would boost nominal GDP by roughly (3) $8.9 trillion over the 2024–2034 decade and lower federal deficits, on net, by about $0.9 trillion because these illegal immigrants are overwhelmingly of working age, pay payroll and income taxes, social security and draw comparatively few federal benefits.

That result is not an accident of one model; This reflects a demographic bind our country is already in. The native-born working-age population is beginning to shrink as the baby boomers retire, and the CBO projects that (4) around 2030, deaths will begin to exceed births, and immigration will account for essentially all population growth. Labor economists at the Economic Policy Institute make the corollary explicit: with the U.S.-born labor force stagnant, (5) returning to historically normal rates of economic growth is close to impossible without sustained immigration.

Pragmatically speaking: and what comes as a surprise to most of us is that the surge landed at the exact moment the country needed workers most. An aging population means a shrinking base of taxpayers supporting a growing base of retirees. Working-age immigrants push against that math from the other direction adding earners, consumers, and payroll-tax contributions precisely as our native-born workforce plateaus. That is why the federal budget scores the surge as a modest positive rather than a drain: at the national level, the country is not so much absorbing a cost as filling a demographic hole.

Where the cost of illegal immigrants actually lands: None the costs are imaginary. It means they land somewhere other than the federal ledger and this is where the concern about the surge is strongest and most legitimate. The costs and benefits are split by level of government. The National Academies of Sciences, in the definitive study of the question, found that first-generation immigrants, especially those with less education, (6) tend to be a net cost to state and local governments largely because states and localities pay to educate children, while the tax rewards of those educated workers later flow disproportionately to Washington. This is exactly what I have been writing and talking about but for some reason our governor and legislators are willing to ignore this problem by refusing to pass legislation for E-Verify. In the mean time we the taxpayers are footing a $400 million bill for education, medical care and food benefits while the corporations and Ag businesses employing these illegal immigrants pay them lower wages while the taxpayers subsidize this workforce and that cost grows bigger every year.

The short-term version of that cost is concrete and visible. The CBO estimated that in 2023, state and local (4) tax revenues from the surge rose, however, the cost of services rose by more as the arithmetic behind the shelter, school, and hospital strain hit our large cities the hardest in 2023 and 2024. The Federation for American Immigration Reform has estimated a net national cost around $116 billion a year, though that number is (9) disputed by economists across the spectrum for overstating costs and undercounting the taxes immigrants pay. What analysts genuinely agree on is the geography of the problem: the government that bears the cost is not the government that reaps the reward as state and local governments are suffering from these increased costs they must bear as those hiring these illegals reap the benefits of lower wages and medical costs.

Synthesized from the CBO, National Academies, and think-tank analyses cited throughout.

Reading the columns together is the whole point. The costs are real, local and near-term; the benefits are real, federal and long-term. Which one dominates depends heavily on the time horizon you choose and the level of government you look at.

The second generation changes the math: Stretch the horizon and the ledger tips. The same National Academies research that flagged first-generation local costs found that the second generation the U.S.-born children of immigrants is among the most fiscally positive groups of the entire population, because the one-time cost of educating them is repaid by a lifetime of taxes. Building on that method, a Cato Institute analysis estimated that immigrants and their descendants generated a cumulative fiscal (7) surplus of about $14.5 trillion from 1994 to 2023. Even a restrictionist source concedes part of the point: the Center for Immigration Studies notes that unauthorized immigrants are a (8) net positive for Social Security and Medicare paying in while unable to collect even as it argues they do not cover their full lifetime cost of services and that legalizing them would erode that particular benefit.

The fiscal verdict depends almost entirely on where you draw the boundary. Count only first-generation adults at the state and local level over a few years, and immigration looks like a cost. Count the second generation and stretch to a lifetime and a national scale, and it looks like a surplus. Both are true but they are answers to different questions.

Wages, crime, and the gap with perception: Two of the most common fears deserve direct treatment, because the data on both is clearer than the debate implies. On wages, the National Academies concluded that over a decade or more the effect of immigration on native-born wages overall is very small, with the measurable downward pressure concentrated on the workers most substitutable for new arrivals prior immigrants and native workers without a high-school diploma which is real, but narrow. What they don’t discuss is the benefit to the businesses who employ these illegals and reap the benefit of lower paid wages and less cost for employee medical benefits. Instead, those costs plus the cost of educating their children are born by the local tax payers.

On crime, the perception gap is wide: Using Texas records that log immigration status at every arrest, a peer-reviewed study found that undocumented immigrants had (10) substantially lower felony arrest rates than native-born citizens. The National Institute of Justice, summarizing the same data, reported that illegal immigrants were arrested at (11) less than half the native-born rate for violent and drug offenses. A separate incarceration analysis found native-born Americans (12) markedly more likely to have been incarcerated than immigrants but that’s not the whole story.

The crime data and the security concern are answering different questions: Conflating them muddies both. The research is consistent that immigrants, including the illegals, commit crimes at lower rates than native-born citizens so the aggregate “migrant crime wave” framing is not supported. But that finding says nothing about border control, fentanyl interdiction, or the screening gaps that let specific dangerous individuals through. Those are legitimate concerns on their own terms and we have had a good deal of experience with these types of criminals since the surge. They are just not the same claim as “illegals raise the crime rate,” and each deserves to be argued on its own evidence. While these studies may be a surprise to myself and to most Americans it is hard to ignore the horrible crimes that have come to light and been publicized so heavily because of the criminal elements that have found their way across our border. The number of missing children alone should send a chill up everyone’s spine.

The real choice: remove, legalize, or leave in limbo: The question “what if it isn’t reversed with deportations” assumes a binary that doesn’t exist. There are three paths, and each carries its own bill.

Mass removal is the option the framing implies, but it is costly to execute. The Federal Reserve Bank of Dallas estimates that reduced immigration has already cut 2025 GDP growth by roughly (13) three-quarters of a point to a full point, and that a mass-deportation scenario deepens and prolongs that drag while noting that removing a million people a year strains the available personnel, funding, and detention capacity. Deporting a population of roughly 14 million would shrink the workforce in agriculture, construction, and care, cost well over a trillion dollars to carry out, and create slow growth.

While I don’t believe that all 14 million will be completely removed I want to remind everyone that the specific workforce impacted is agriculture, construction and care givers. It is the corporations that are in these fields that will reap the benefits by reduced wages and the benefits paid to these illegals as the burden is shifted to the local taxpayers for subsidizing the education of their children, picking up the cost of their medical care and other benefits. If we are indeed talking about a Trillion dollars you can bet the corporations and private businesses are saving millions in annual costs and by any measure should be paying their fair share and not pushing the burden on the taxpayers.

Indefinite limbo a real dilemma: neither removing people nor regularizing them is the default the country tends to drift into, and it may be the worst of the three. It prolongs exactly the local service strain that fuels the backlash, sustains a large population that can be paid under the table (which is itself what puts downward pressure on low-end wages), and leaves millions living outside the legal system, which erodes the rule of law and social cohesion regardless of how one feels about illegal immigration. Limbo captures the costs of the surge while forgoing much of the second-generation upside that depends on integration.

Earned legalization paired with enforcement is the path that captures the fiscal and labor-market upside and resolves the rule-of-law problem but it carries real trade-offs of its own. Critics argue, not unreasonably, that legalization rewards unlawful entry and may invite future flows, and the Center for Immigration Studies is right that extending Social Security and Medicare eligibility would flip that particular sub-ledger from positive to negative. It is a genuine values choice, not merely a technical one.

Weighing the claims of Immigration costs to us:

1. Who benefits and who loses? Ask whether the cost figure is federal or state-and-local. The two point in opposite directions, and a claim that omits the distinction is telling you half the story. The claim no one mentions is those who benefit from this illegal labor force and it is clearly the corporations and businesses who are hiring them.
2. Which generation? Check whether an estimate counts only first-generation adults or includes their U.S.-born children. The second generation is where the fiscal return shows up and leaving it out biases the answer toward “cost.”
3. Gross or net? A big spending number is not a cost until you subtract the taxes the same people pay. Insist on the net figure.
4. Rate or anecdote? On crime, separate the aggregate arrest and incarceration rates (which run lower for immigrants) from individual cases and from distinct border-security questions and is it possible to eliminate those who are committing crimes and causing disruption?
5. Which policy path is assumed? Ask whether a projection assumes removal, legalization, or limbo as the same population yields very different forecasts depending on the choice.

Every factual claim above is sourced in the references; I encourage our readers to follow them and judge the trade-offs themselves.

Limitations & open questions: This analysis rests on projections, and projections are only as good as their assumptions. The CBO’s fiscal and GDP estimates were built on policy as it stood in 2024 and do not fully capture enforcement changes since; the fiscal models will differ sharply depending on methodology, which is precisely why restrictionist and pro-immigration groups reach numbers that are an order of magnitude apart. The second-generation upside assumes integration and upward mobility that, while historically typical, are not guaranteed and are themselves impeded by prolonged legalization limbo. The macroeconomic drag from reduced immigration is estimated within certain ranges, not known precisely, and depends on how much of the slowdown comes from fewer arrivals versus active removals. The crime findings draw heavily on Texas data, the best available because it records status at arrest, but a single state cannot settle a national question. And this piece deliberately brackets the moral and legal arguments about lawful entry and national sovereignty, which are real and which the fiscal ledger cannot adjudicate. Our readers who will weigh the same evidence may reasonably prioritize different values and reach different conclusions.

Idahoans should be aware of Congressman Simpson who is campaigning for something called the “The Farm Workforce Modernization Act”. This was first passed twice in 2019 and 21 by the house but stalled in the senate was reintroduced in 2023 and again in 2025 but has still not become law. This is essentially a pathway for certain illegal agricultural workers to obtain Certified Agricultural Worker (CAW) status which would allow them to work legally in the U.S. This legislation is supposed to address labor shortages in the agricultural sector by providing a pathway for certain illegal agricultural workers to obtain legal work status.

This act allows eligible illegal agricultural workers to apply for CAW status, enabling them to work legally in the U.S. The Act explicitly says that it does not provide amnesty and applicants must meet specific criteria and can be denied status if deemed dangerous or undeserving. It is also aimed at stabilizing wages and alleviating labor shortages which are critical for farmers and ranchers. There are good and bad points to this bill and we should all be interested to see the outcome. This act overhauls the H-2A guest worker visa program streamlining it into a single online system guaranteeing minimum hours opening H-2A to year round jobs with up to 20,000 visas plus a dairy carve out and piloting a portable visa letting up to 10,000 workers move between employers and it adds a mandatory E-Verify system for agriculture.

It also requires employers to furnish housing free to guest workers and allows for grants and loans to allow farmers to build farmworker housing. One more important issue is the bill doesn’t set a ceiling on what workers can make in the sense of capping their total earnings. What is no in place is Adverse Effect Wage Rate which is a wage floor the minimum an H2A employer must pay set by the government to keep foreign labor from undercutting domestic wages What FWMA does is put a cap on how fast that FLOOR CAN RISE and it would freeze AEWR growth to no more than 3.5%per year for about a decade than replace the formula with a new system by 2030. This is where the fighting has settled as farmers see runaway AEWR increases as unsustainable, and worker advocates see the cap as suppressing wages that are already low. While this act has serious support because it addresses the labor crisis reducing the chances of a whole crew being deported. The opposition fear legal status is too tightly tethered to employer sponsorship which can enable exploitation, wage theft and retaliation to a worker who complains. To be sure there will be a battle over this act and chances of it becoming law I would say are somewhat tenuous.

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Sources

1. Pew Research Center. “U.S. unauthorized immigrant population reached a record 14 million in 2023.” pewresearch.org. Cited 1×
2. Brookings Institution. “Macroeconomic implications of immigration flows in 2025 and 2026.” brookings.edu. Cited 1×
3. Congressional Budget Office. “Effects of the Immigration Surge on the Federal Budget and the Economy.” cbo.gov. Cited 1×
4. Congressional Budget Office. “Immigration” (topic page and baseline projections). cbo.gov. Cited 2×
5. Economic Policy Institute. “The U.S.-born labor force will shrink over the next decade.” epi.org. Cited 1×
6. National Academies of Sciences, Engineering, and Medicine. “The Economic and Fiscal Consequences of Immigration.” nationalacademies.org. Cited 1×
7. Cato Institute. “Immigrants’ Recent Effects on Government Budgets, 1994–2023.” cato.org. Cited 1×
8. Center for Immigration Studies. “The Cost of Illegal Immigration.” cis.org. Cited 1×
9. Cato Institute. “FAIR’s ‘Fiscal Burden of Illegal Immigration’ Study Is Fatally Flawed.” cato.org. Cited 1×
10. Proceedings of the National Academy of Sciences. “Comparing crime rates between undocumented immigrants, legal immigrants, and native-born US citizens in Texas.” pnas.org. Cited 1×
11. National Institute of Justice. “Undocumented Immigrant Offending Rate Lower Than U.S.-Born Citizen Rate.” nij.ojp.gov. Cited 1×
12. Cato Institute. “Immigrants Have Lower Lifetime Incarceration Rates Than Native-Born Americans.” cato.org. Cited 1×
13. Federal Reserve Bank of Dallas. “Declining immigration weighs on GDP growth, with little impact on inflation.” dallasfed.org. Cited 1×