By David Lawder and Rachelle Younglai
WASHINGTON (Reuters) - A U.S. Senate-passed immigration bill would significantly reduce the flow of illegal immigrants, but increased U.S.-Mexico border security costs would eat into projected budget savings, the Congressional Budget Office said on Wednesday.
The CBO concluded that the bill, which would double the number of federal agents along the border and complete the 700 miles of fencing, would reduce the number of people entering the United States from Mexico without documentation by one-third to one-half.
The Democratic-led Senate passed the sweeping immigration bill at the end of June, but the legislation's fate is unclear in the Republican-controlled House of Representatives. Some House Republicans have complained that the Senate bill's border security provisions are not strong enough and the majority do not want to provide a path to citizenship for the 11 million illegal immigrants, which is at the heart of the Senate bill.
Before senators voted to strengthen the security measures, the non-partisan CBO had estimated that the Senate bill would shrink illegal immigration by about one-quarter.
The original bill would have dispatched 3,500 additional federal agents to the Mexican border. The current bill would add 20,000.
"It's pretty clear that CBO is estimating diminished returns. The improvements from CBO are pretty modest," said Edward Alden, a senior fellow at the Council on Foreign Relations think tank who specializes in immigration policy and border security.
The CBO also found that the cost of doubling the number of agents, finishing the fence and buying high-tech surveillance equipment would shrink potential deficit reduction promised under the legislation.
The report concluded that the bill, if enacted, could reduce deficits by $158 billion from 2014 to 2023. When additional appropriations needed to implement the legislation are added in, the savings shrink further to $135 billion.
Previously, the CBO estimated that the version of the bill passed by the Senate Judiciary Committee would reduce deficits by $197 billion over 10 years, or $175 billion with the additional appropriations.
The biggest factor cited by the CBO was a net 10-year increase in direct costs of $36 billion to fund the increased border security measures.
But the measure as passed by the Senate would still produce massive deficit reduction in the second decade of $685 billion, the CBO said, versus a previous estimate of $700 billion. These savings, which take into account stronger economic growth fueled by an increase in the legal U.S. workforce, are being touted by Democrats and some moderate Republicans as an incentive for passage of the legislation.
The bill as passed by the Senate would result in a slightly smaller increase in the U.S. population over the first decade - 9.6 million residents versus a previous estimate of 10.4 million.
In addition to providing a path to citizenship for undocumented foreigners, the legislation increases the number of work visas and requires U.S. companies to use a government program to verify that they are not employing illegal immigrants.
House Republicans are due to meet July 10 to discuss how to proceed on immigration policy.
(Reporting by Rachelle Younglai and David Lawder; Editing by Eric Beech and Stacey Joyce)