The $600 billion reason Trump may have flip-flopped on deportation

Republican presidential candidate Donald Trump
Spencer Platt | Getty Images
Republican presidential candidate Donald Trump

For over a year, it's been the centerpiece of his campaign.

But, in a stark midcourse correction on his immigration policy, Republican nominee Donald Trump this week backed away from a pledge to round up millions of undocumented immigrants and transport them outside the country.

In the end, the plan may have simply proved too costly — both politically and economically.

By one estimate the direct price tag for removing some 11 million undocumented workers could top $600 billion. And the economic impact of a such a sudden contraction in the U.S. labor force would lop $1.6 trillion from the nation's economy. That's roughly the gross domestic product of Texas.

From the day he announced his bid for the White House, Trump has made immigration a major focus of his campaign.

"They're sending people that have lots of problems, and they're bringing those problems with us," he said in the day he announced in June 2015. "They're bringing drugs. They're bringing crime. They're rapists. And some, I assume, are good people."

That included a promise to undertake a mass deportation of millions of undocumented immigrants living and working in the U.S., a position that addressed the No. 1 concern for many of this supporters.

"We're going to keep the families together, but they have to go," Trump said a year ago on NBC's "Meet the Press." Asked about undocumented immigrants who might have nowhere else to go, Trump said: "We will work with them.

"They have to go ... we either have a country, or we don't have a country," he added.

But this week, The Trump campaign all but abandoned its mass deportation pledge.

"No citizenship," Trump told Fox News in an interview Wednesday. "They'll pay back taxes, they have to pay taxes, there's no amnesty, as such, there's no amnesty, but we work with them."

As he trails Democrat Hillary Clinton in opinion polls, the Trump campaign is struggling to broaden his support beyond the white, working-class voters who have been his base of support. And from the beginning, his mass deportation plan generated less backing among the rest of the Republican Party.

Among supporters of Texas Sen. Ted Cruz, for example, only 30 percent backed the idea of mass deportation, according to a March survey by the Pew Research Center. Just 17 percent of Ohio Gov. John Kasich supporters liked the idea.

And among Democrats Trump may hope to win over, support for mass deportation was in the single digits.

Aside from the political cost, Trump's deportation plan would have come with an enormous price tag.

Because millions of undocumented workers seek to keep a low profile, the economic impact of their presence — and the cost of removing them — is difficult to pin down.

Of the 41 million foreign-born people living in the United States in 2012, about 22 million were noncitizens, according to a Congressional Budget Office analysis of Census data.

That noncitizen category includes lawful permanent residents (who are legally allowed to live and work here); temporary residents and visitors; and unauthorized residents. That last category includes some 11 million to 12 million people, a number that has stayed fairly constant, the CBO researchers said.

In March, the American Action Forum, a center-right policy institute led by former CBO Director Douglas Holtz-Eakin, estimated it would take between $100 billion and $300 billion to arrest and remove "all undocumented immigrants residing in the country, a process that we estimate would take 20 years," the group said.

Once those undocumented immigrants had been removed, it would take another $315 billion in higher enforcement costs to keep them from coming back, according to AAF.

That estimate includes just the hard cost of removing undocumented workers; it doesn't take into account the economic impact that would result from the removal of some 11 million people from the labor force and the resulting loss of consumer spending.

AAF estimated the removal of that many people would shrink the pool of U.S. workers by 6.4 percent, which means that 20 years from now the U.S. economy would be nearly 6 percent smaller. That works out to $1.6 trillion in lost wages, spending and other economic activity.

To put that in perspective, the gross domestic product of Texas last year was about $1.5 trillion, second behind California.

While this impact would be felt across the country and throughout the economy, sectors such as agriculture, construction, retail and hospitality would be hardest hit, the AAF said.

The federal government would also be a big loser if all undocumented workers were removed from the country, according to a 2013 CBO report.

The agency was asked to estimate the economic impact of S. 744, a comprehensive immigration reform bill that passed the Senate before being scuttled in the House.

Because legal workers would be entitled to a range of federal benefits, including subsidized health care, direct federal spending would have risen by $262 billion over a decade beginning in 2014, the report said. Most of that would have gone to pay higher health-care costs.

But the immigration reform plan spelled out in S. 744 would have more than offset those costs, thanks to much higher tax collections, both because the workforce would have expanded and undocumented workers would pay taxes. Those higher tax receipts would have boosted federal revenues by $459 billion over the same decade, the CBO estimated.

That would have added a net of $197 billion to the federal budget, shrinking the deficit by that much over 10 years.

Those estimates didn't include the impact of more workers paying into the Social Security trust fund, which would have collected billions more in payroll taxes that would have put it on a more solid financial footing.