December 2, 2010

S. 3992 would authorize the Secretary of Homeland Security to grant conditional

nonimmigrant status to certain unauthorized residents in the country. Individuals with

conditional nonimmigrant status could lawfully live and work in the United States and

would be eligible for some refundable tax credits, Social Security, and Medicare benefits,

assuming they meet other program requirements. In addition, the bill would make

conditional nonimmigrants eligible for federal student loans.

S. 3992 would affect federal revenues in a number of ways. The increase in authorized

workers would affect individual and corporate income taxes, as well as social insurance

taxes. On balance, those changes would increase revenues by $2.3 billion over 10 years,

according to estimates provided by the staff of the Joint Committee on Taxation (JCT).

Newly authorized workers also would be eligible for some refundable tax credits (included

in the spending total below).

CBO estimates that enacting S. 3992 would increase net direct spending by $912 million

over the 2011-2020 period. That amount reflects changes in spending for refundable tax

credits, Social Security, Medicare, student loans, and the Department of Homeland

Security (DHS). DHS would charge fees to certify legal status under the bill. Because

DHS’s costs for implementing the bill would be covered by those fees, CBO estimates that

implementation by DHS would have no significant impact on spending subject to

appropriation. CBO has not estimated other potential effects on discretionary spending, but

any such effects would probably be small.

Pay-as-you-go procedures apply because enacting the legislation would affect direct

spending and revenues. CBO and JCT estimate that enacting the bill would reduce deficits

by about $1.4 billion over the 2011-2020 period. That result reflects an increase in

on-budget deficits of about $1.4 billion over that period and a decrease in off-budget

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deficits of about $2.8 billion over the same period. Only the on-budget effects are counted

for purposes of enforcing the Statutory Pay-As-You-Go Act of 2010.

Although the legislation would not have a large impact on deficits over the 2011-2020

period, the eventual conversion of some of the conditional nonimmigrants to legal

permanent resident (LPR) status after 2020 would lead to significant increases in spending

for the federal health insurance exchanges, Medicaid, and the Supplemental Nutrition

Assistance Program (SNAP). Pursuant to section 311 of the Concurrent Resolution on the

Budget for Fiscal Year 2009 (S. Con. Res. 70), CBO estimates that the bill would increase

projected deficits by more than $5 billion in at least one of the four consecutive 10-year

periods starting in 2021.

This bill contains no intergovernmental mandates as defined in the Unfunded Mandates

Reform Act (UMRA). Some state and local colleges and universities may experience

increased enrollment as a result of this bill, but any associated costs would not result from

intergovernmental mandates. S. 3992 also contains no private-sector mandates as defined

in UMRA.

The estimated budgetary impact of S. 3992 is shown in the following table. The costs of

this legislation fall within budget functions 500 (education, training, employment, and

social services), 570 (Medicare), 600 (income security), 650 (Social Security), and 750

(administration of justice).

By Fiscal Year, in Millions of Dollars

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2011-

2015

2011-

2020

Estimated Revenues 0 187 175 174 221 262 281 322 335 354 757 2,311

Estimated Budget Authority 0 0 51 85 111 124 140 161 185 211 247 1,068

Estimated Outlays 0 -26 9 57 94 114 131 153 178 203 134 912

Note: Components may not sum to totals because of rounding.

a. Positive numbers indicate increases in deficits; negative numbers indicate decreases in deficits.