H.R. 1772, Legal Workforce Act

Cost Estimate
December 17, 2013

As ordered reported by the House Committee on the Judiciary on June 26, 2013

H.R. 1772 would replace the federal government’s existing voluntary system for verifying the employment eligibility of individuals in the United States with a mandatory system. Assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 1772 would cost about $635 million over the 2014-2018 period and a similar amount in the subsequent five-year period.

In addition, CBO and staff of the Joint Committee on Taxation (JCT) estimate that enacting the bill would decrease direct spending and increase on-budget revenues but decrease off-budget revenues. (Payroll taxes for Social Security are classified as off-budget revenues.) Summing those budgetary impacts, CBO and JCT estimate that enacting H.R. 1772 would increase budget deficits as measured by the unified federal budget by about $30 billion over the 10-year period.

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 increase on-budget revenues by about $49 billion over the 2014-2023 period and would decrease direct spending by $9 billion over the same period. Thus, we estimate that enacting H.R. 1772 would decrease the on-budget deficit by about $58 billion over the 10-year period. Only on-budget changes to outlays or revenues are subject to pay-as-you-go procedures.

H.R. 1772 would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) on employers and other entities that hire, recruit, or refer individuals for employment. CBO estimates that the aggregate annual cost to comply with those mandates on public entities would exceed the intergovernmental threshold ($75 million in 2013, adjusted annually for inflation) in fiscal year 2014. In addition, CBO estimates that the aggregate annual compliance costs for private entities would exceed the private-sector threshold ($150 million in 2013, adjusted annually for inflation) beginning in 2016 once the mandates are fully in effect.